*

* *
ENCYCLOPEDIA

-OFTHE--

EUROPEAN
U ION

Advlsory Board
Roy H. Ginsherg
Skidmore College (United States)

Ianne Haaland Matlary

University of Oslo (Norway)

Andrew Moravcsik
Harvard University (United States)

lohn Redmond
University of Birrningham (United Kingdom)

Glenda G. RosenthaI
Columbia University (United States)
Alberta Sbragia
University of Pittsburgh (United States)

Paul I.I. Welfens

Potsdam University (Germany)

ENCYCLOPEDIA
-OFTHE---

EUROPEA
ION
edited by
Desmond Dinan

MACMILLAN

 1998 by Lynne Rienner Publishers, !nc.

Softcover reprint of the hardcover 1st edition 1998 978-0-333-71262-7
All rights reserved. No reproduction, copy or transmission of this
publication may be made without written permission.
No paragraph of this publication may be reproduced, copied or
transmitted save with written permission or in accordance with
the provisions of the Copyright, Designs and Patents Act 1988,
or under the terms of any licence permitting limited copying issued
by tbe Copyright Licensing Agency, 90 Tottenham Court Road,
London WIP 9HE.
Any person who does any unauthorized act in relation to this
publication may be liable to criminal prosecution and civil claims
for damages.
First published in the United Kingdom by
MACMILLAN REFERENCE LTD 1998
25 Eccleston Place, London, SWIW 9NF
and Basingstoke
Companies and representatives throughout the world.
Distributed in the UK and EutOpe by
Macmillan Direct,
Bronel Road, Houndmills,
Basingstoke,
Hampshire, RG21 2XS, England
ISBN 978-1-349-14596-6
ISBN 978-1-349-14594-2 (eBook)
DOI 10.1007/978-1-349-14594-2
A catalogue record for this book is available from the British Library.

CONTENTS

Preface
Map of the European Union

vii
ix

Encyclopedia
List of Abbreviations and Acronyms

499

Chronology

505

Appendix 1

Overview of Institutional Change, 1958-1998

517

Appendix 2

National Representation in EU Institutions as of 1998

518

Appendix 3

Member States in International Security Organizations

519

Appendix 4

Evolution of Commission Directorates-General, 1958-2000

520

Appendix 5

Chronology ofEP Party Groups' Development

522

Appendix 6

European Parliament Directorates-General

522

Appendix 7

Rota of the Presidency of the Council of the European Union

523

Appendix 8

Summits of the Heads of State and Govemment, 1961-1998

524

Appendix 9

Directorates-General of the Council of the European Union

528

Appendix 10

Special Committees of the Council of the European Union

528

Appendix 11

Renumbered Articles, Titles, and Sections of the Treaty on

the European Union

529

Appendix 12

Renumbered Articles, Titles, and Sections of the Treaty

Establishing the European Community

530

List of Tables Included in the Entries

533

The Contributors
Index

535
539

PREFACE

This book originated in a discussion with Peter

Doyle, press and information officer at the EU
delegation in Washington, D.C., and Lynne Rienner in April 1994. We agreed that an authoritative
and comprehensive reference work on the EU
would be invaluable for scholars, students, practitioners, and lay readers alike. Peter and Lynne were
enthusiastic about the project; my enthusiasm was
tempered only by fear of the amount of work involved, a fear that was fully justified. Fortunately
Peter and his successor at the delegation, S0ren
S0ndergaard, were extremely supportive. Thanks to
them I received a generous grant from the delegation to help cover research and administrative costs.
Having hatched the idea with Peter and
Lynne, I set out to form an advisory board of
highly respected academics from Europe and the
United States and from a variety of relevant disciplines. Although the board met formally only
once, at the European Community Studies Association's conference in Charleston, South Carolina,
in May 1995, at other times we were a virtual
committee, communicating by e-mail and having
bilaterals on the margins of other meetings, just as
EU ministers and officials do.
With the board's help I drew up a list of approximately one hundred key items that warranted
entries by leading experts and a much longer list
of items on which my research assistants and I at
George Mason University would write. This procedure accounts for the distinction between signed
and unsigned entries. Inevitably, some readers will
question the selection of entries and the decision
as to authorship. Although a different committee
might have come up with a different list, I trust
that the encyclopedia as a whole covers the vast

subject matter extensively and thoroughly. It provides in-depth, authoritative discussions of more
than seven hundred concepts, issues, developments, institutions, policies, events, negotiations,
treaties, national interests, and personalities related to European integration.
After the contributors submitted their entries,
I spent many months thereafter editing them,
keeping them up-to-date (I took the liberty of doing this for signed as weIl as unsigned entries), revising the copyedited manuscript, and finally correcting the proofs. These tasks were complicated
by the EU's refusal to stand still on my account
(the Amsterdam Treaty springs to mind; although
treaty articles will be renumbered following implementation of the Amsterdam Treaty, the original article numbers-many of which will continue
to be used informally even after new numbers are
introduced-are used in the encyclopedia) and by
my move to the Netherlands in the summer of
1997 with not only our two Euro-kids from a previous stint in Brussels but also our brand-new, allAmerican infant. Obviously my wife, Wendy
Moore, deserves special thanks.
A word about access to the information in the
encyclopedia: As is usual, entries are arranged alphabetically. Care has been taken to provide
"blind entries" to cover variations (e.g., alternate
spellings or acronyms) of words or phrases for
which the reader might be searching. Entries also
include extensive cross-references; bibliographic
references point to sources for further research.
The comprehensive index offers access to the information at the most detailed level.

* * *
vii

viii

Preface

Many thanks to all the contributors to the encyclopedia for their careful work, Thanks also to
Dale Houser and Kristin Gaschen, my assistants at
George Mason; to Libby Barstow, my copyeditor;
to Shena Redmond, my main contact at Lynne Rienner Publishers; to Lynne Rienner herself; and to
Jonathan Davidson and S~ren S~ndergaard at the
EU delegation.
Some of the contributors would like to make
disclairners or acknowledgments. Jonathan Faull, a
director in the Comrnission's Directorate-General
for Competition, wishes to state that all views expressed in his contribution are personal; he also
wishes to thank V. Moussis for bis help. Alan Forrest wishes to state that the opinions expressed in

bis entries on culture and audiovisual policy are

personal and do not comrnit the Council of the European Union, for wbich he works. Joaquim Muns
wishes to thank Montserrat Millet, lecturer at the
University of Barcelona, for her invaluable help in
the preparation of bis entry on Spain. Finally, the
entry on the European Council, by Pbilip Myers
and Wolfgang Wesseis, is an updated and revised
version of Wolfgang Wesseis, "Europischer Rat,"
in Werner Weidenfeld and Wolfgang Wesseis, eds.,
Europa von A-Z: Taschenbuch der europischen
Integration (Bonn: Institut fr Europische Politik
and Europa Union Verlag, 1995), pp. 183-187.

Desmond Dinan

,0 Jan Mayen

(No"""y)

Gretnland
So.

Nonw~gia"

L? Faroe I.randl
y (Oenmorle)

AI/amlc

Oet

The European Union, 1998

Se.

Russla

A
Accession
Accession is the culmination of the process by
which countries join the EU. Being European has
always been a requirement of membership. The
European Council elaborated upon the criteria for
aspiring member states at its meeting in Copenhagen in June 1993: (1) stability of institutions
guaranteeing democracy, the ru1e of law, human
rights, and respect for and protection of minorities; (2) existence of a functioning market economy; (3) capacity to cope with competitive pressures and market forces within the EU; and (4)
ability to take on the obligations of membership,
including adherence to the aims of political, economic, and monetary union. The last condition
implies full acceptance of the acquis communautaire, including participation in all three of the pillars established by the Treaty on European Union.
In addition, the European Council stipulated that
"the Union's capacity to absorb new members,
while maintaining the momentum of European integration, is also an important consideration in the
general interest of both the Union and the candidate countries."
The process of accession begins when a country submits a membership application to the Council presidency. If it agrees that the application has
merit, the Council asks the Commission for an
opinion, a thorough assessment of the likely political and economic implications (for the applicant
and for the EU) of the applicant's membership. The
Council may accept or reject the Commission's
opinion. If the Council decides to proceed, the next
step involves complicated negotiations between the
member states and the applicant country, which
also involve negotiations between the member

states themselves over the terms of accession. The

Commission acts as a broker in both sets of negotiations while always promoting what it considers to
be the EU's best interests. If the accession negotiations end successfully-if the applicant and the
Council (acting unanimously) accept the outcome
of the negotiations-then the Council president, the
Commission president, and a representative of the
applicant country sign an accession treaty. This is
not the end of the accession process, however, because the treaty must be ratified by the applicant
country or countries, by the member states, and
(since the Single European Act) by the European
Parliament. Only when all parties have ratified the
treaty may the applicant country join the EU.
There is no timetable for accession: the period between application and membership has
ranged from three to ten years. Much depends on
the applicant's political, economic, and administrative preparedness for membership; on the likely
impact of membership on the EU's policies and
institutions; and on the general political and economic climate.
See also ENLARGEMENT.

Accession Treaty
An accession treaty is a formal agreement signed
by the Council president, the Commission president, and a representative of the country that has
negotiated EU membership, specifying the terms
under which the applicant country will become a
member. These terms include the applicant's institutional representation in the EU (i.e., number
of votes in the Council, number of commis sioners, or number of members of the European Parliament); derogations (i.e., exemptions, if any,
from EU policies); and other special considerations. Accession treaties must be ratified by the
applicant country, by the member states, and
(since the Single European Act) by the European
Parliament.
See also ENLARGEMENT.

Accountability
Accountability in the EU refers to problems of
political and financial control. Politically, the
EU's institutions seem remote from the EU's citizens and largely unaccountable to them. In fact,
the Council of Ministers consists of elected govemment ministers, and members of the European

Acheson, Dean (7893-7977)

Parliament (EP) are directly elected every five

years. But the Council is generally secretive
about decisionmaking, which, because of greater
use of qualified majority voting, is subject to less
national parliamentary control than when unanimity was the norm. Although the EP acquired
greater legislative authority as a result of the Single European Act, the Treaty on European Union
(TEU), and the Amsterdam Treaty, it still lacks
sufficient power and credibility to assuage popular concems about political accountability (or the
lack thereof) in the EU. Commissioners are not
elected and are not directly accountable to the
EU's citizens. Nevertheless, the EP has made significant headway in its efforts to strengthen the
Commission's accountability by winning a say
over the appointment of commissioners. Under
the terms of the TEU, the EP has the right to give
its opinion on the prospective Commission president and to vote on the composition of the Commission as a whole. The EP extended the latter
right unilaterally in January 1995 by instituting a
series of confmnation hearings for all members
of the Commission. In future, the EP would like
to be able to choose the president of the Commission from a number of candidates proposed by the
European Council. Despite these efforts, a popular perception of the poor accountability of EU
institutions and of a democratic deficit undermines the EU's legitimacy.
Poor financial accountability in the EU is related to the political problems of credibility and
legitimacy because it undermines public confidence in the EU and its institutions. For that reason, but also because of the budgetary implications of inadequate financial control, since the
early 1990s the Commission and the Court of Auditors have become much more aggressive and
successful in identifying and combating waste,
fraud, and mismanagement.
See also COURT OF AUDITORS; DEMOCRATIC
DEFICIT; LEGITIMACY.

Acheson, Dean (1893-1971)

The title of Dean Acheson's autobiography, Present at the Creation, refers not only to the U.S. secretary of state's key role in the inception of NATO
but also to his participation in the launching of the
European Coal and Steel Community. Acheson arrived in Paris on May 7, 1950, when Jean Monnet

and Robert Schuman were preparing their radical

proposal to pool French and German production of
coal and steel. Taking advantage of the secretary of
state's unexpected appearance, Monnet and Schuman quickly took hirn into their confidence.
Grasping the irnportance of the proposal, Acheson
endorsed the Schuman Plan and drafted a statement of support for President Truman to release
once the plan became public on May 9.
In view of U.S. influence on European affairs
in the immediate postwar years, Acheson would
have received advance notice in any case of the
Schuman Plan. But his presence in Paris just as
the plan was being formulated ensured its favorable reception in Washington. Moreover, Acheson's enthusiastic response was due in large measure to his dose friendship with Monnet, whom he
had first met in Washington before World War 11.
Within a month of the famous May 9 dedaration,
Acheson set up a special Working Group on the
Schuman Proposal in the U.S. Embassy in Paris,
staffed by young officers who fully supported the
goal of European integration.
See also SCHUMAN, ROBERT.

Acquls Communautalre
The French term acquis communautaire refers to
the rights and obligations deriving from EU
treaties, laws, and regulations. Applicant countries
must be prepared to accept the acquis communautaire as it exists at the time of accession, although
the impact of greater flexibility and differentiated
integration on the acquis communautaire-for existing and prospective member states-is uncertain.
See also DIFFERENTIATED INTEGRATION.

Acquls Polltlque
Derived from the term acquis communautaire, acquis politique refers to the rights and obligations
of EU member states that arise from the Common
Foreign and Security Policy (CFSP) and, before
that, from European Political Cooperation (EPC),
the member states' foreign policy coordinating
mechanism. Because EPC was flimsy, and the
CFSP is weak, the acquis politique is still at an
early stage of deve1opment.
See also COMMON FOREIGN AND SECURITY
POLICY.

Action Committee for the United States of Europe (ACUSE)

Action Commlttee for the

Unlted States of Europe
(ACUSE)
The Action Committee for the United States of
Europe (ACUSE) was established in 1955 by Jean
Monnet and went out of existence at his suggestion in 1975. In suggesting the committee, Monnet
was motivated by the defeat, the previous August,
of the proposed European Defense Community
(EDC) in the French National Assembly. Monnet
was convinced that the movement toward European integration needed restarting and that personally he needed to playa role different from that of
president of the High Authority of the European
Coal and Steel Comrnunity (ECSC), a position
that he had occupied since the ECSC's establishment in 1952.
The birth of ACUSE in October 1955 followed more than a year of uncertainty over how
the movement toward European integration should
be relaunched. Monnet had announced to his High
Authority staff in Luxembourg in November 1954
that he planned not to seek a renewal of his mandate, which would expire early in 1955. He was
advised, however, that he could not leave his post
until a successor was named. Meanwhile, Monnet
worked with Belgian foreign minister Paul-Henri
Spaak during the winter of 1954--1955 to devise a
new approach to European integration. By the
time a plan was developed for an atomic energy
comrnunity and a comrnon market in late spring,
Monnet apparently entertained doubts about resigning the High Authority post. But by then the
six member states of the ECSC (France, Germany,
Italy, Belgium, the Netherlands, and Luxembourg)
had agreed on Monnet's successor. Plans for the
Action Committee moved ahead accordingly.
The concept behind the committee as developed by Monnet was unusual. It was to be a pressure group or a lobby, in U.S. terms, with Monnet
at its center. In retrospect, such a committee was
inconceivable without Monnet, but at the time it
was more than a one-man show. ACUSE was an
expanded personal network but distinctive because its members, although always well-known
European personalities, represented their organizations, not themselves. The organizations involved ineluded most political parties and most labor unions in the ECSC's six member states.
These organizations also paid most of ACUSE's
expenses, supplemented by personal contributions

from Monnet and by a few research grants. (The

principal nonmembers were the Gaullists in
France, the "Nenni" Socialists in Italy, and the
comrnunist parties and unions in all countries.) No
trade, business, or industrial groups were represented, however.
In developing this system, Monnet worked
assiduously to convince the leadership of the democratic political parties and labor unions that
joining the Action Committee was avital step in
reversing the nationalism that had defeated the
EDC. This was a formidable task, especially in
initial dealings with the socialist parties, many of
which had been divided on the issue of entrance of
their respective countries into the ECSC. When
this commitment was achieved-the support of
the German Social Democratic Party was a key
victory-Monnet sought the best representation
within each organization to sit on the committee.
ACUSE met eighteen times in its two decades
of existence, although these formal sessions were
supplemented by innumerable phone calls and individual consultations with committee members by
Monnet and two of his most trusted colleaguesMax Kohnstamm, his vice president, and Jacques
Van Helmont, the secretary general. For these three,
ACUSE was more than full-time work; it was their
collective life and their consuming passion. For
Monnet, who was sixty-seven when ACUSE was
founded and nearly eighty-five when it held its last
session, the organization represented his final, extended act of devotion to a united Europe.
The eighteen meetings were themselves
somewhat unevenly distributed. There were three
sessions in 1956 and in 1969, two in 1959, and either one session or no session in the other years.
Regardless of the formal meetings, the Action
Committee was always as busy as Monnet's personal network.
The headquarters of the Action Committee
could accurately be said to be wherever Monnet
found hirnself. He used the fIat of his brother-inlaw, Alexandre de Bondini, at Avenue Foch in
Paris's 16th arrondisement, both as the mailing
address of ACUSE and as the site of its small staff.
Monnet never cared for elaborate or luxurious office accommodations, and Avenue Foch, as the
committee's headquarters came to be known, fit
this pattern. In the early years, spare bathrooms
served as offices; the staff and visitors encountered unusually elose quarters, sometimes border-

Action Group on Market Access

ing on chaos. Gradually, the Action Committee ings with businessmen in two world wars and in
took over the entire apartment, which remained a postwar France) that businessmen usually offer
crowded warren of small rooms and overflowing overly narrow views of the interests of their
file boxes and cabinets.
country and of the continent. On the other hand,
Several historical phases of the Action Com- he believed that political parties and unions had
mittee are evident. In the early years, from 1956 to see the larger picture in representing their
through 1957, the emphasis was on implementing members.
the Messina resolutions of the six foreign minisBut even in dealing with mass-membership
ters on relaunching the Community. The Rome groups like political parties and unions, Monnet
treaties of 1957 embodied this relaunch with the preferred to work with small cliques: he would
creation of the European Economic Community never shun the sobriquet "elitist." He was no puband the European Atomic Energy Community lic speaker and did not write weIl, although he was
(EURATOM). Simultaneously, the Action Co m- a rigorous and exacting editor. He thus feIt most
mittee lobbied for the accession of the United comfortable in working with a small group of
Kingdom. From 1959 until about 1963, when close collaborators to develop a written consensus
ACUSE was most active and most successful, the of the ACUSE's positions. These were expressed
emphasis was on monetary policy, especially sup- in resolutions that Monnet steered through the Acport of the liberalization of capital markets and tion Committee, usually unanimously, using his
economic and monetary union.
ample powers of persuasion.
From 1963 until 1969, the strength of
Monnet's strong personality kept him always
Gaullism in France forced the Action Committee close to the center of this consultative process, no
into a defensive mode in order to preserve earlier matter with which of ACUSE's 130 different
gains and to maintain solidarity among the five members he dealt, over a twenty-year period. The
partner countries and those elements within Action Committee was, in the fullest sense, an inFrance that still supported the Community effort. stitutional expression of a single individual.
With the easing of tensions within the Community
In 1985 some veterans of ACUSE came toafter de Gaulle's departure, the Action Committee gether to form an Action Committee for Europe
resumed its support for British membership, under secretary-general Max Kohnstamm. Withwhich was agreed to in 1971 and finally effected out Monnet, all agreed, it was a different organizain 1973. Monnet also directed the committee to tion, with a more modest title, and a less ambisome institutional opportunities that now ap- tious mandate.
peared. In the early 1970s, several summit meetSee also MONNET, JEAN.
ings of Community leaders focused on relaunching the stalled integration movement. ACUSE Bibliography
paid close attention to these developments, espe- . Brinkley, Douglas, and Clifford Rackett, eds. 1991.
Jean Monnet: The Path to European Unity. New
cially their institutional aspects, which included
York: St. Martin's.
direct elections to the European Parliament and
Duchene, Fran~ois. 1994. Jean Monnet: The First
regular summit meetings. Monnet wrote a note in
Statesman oi Interdependence. New York: Norton.
1973 supporting a Provisional European Governme nt consisting of the heads of government of
-Clifford Hackett
member states. A 1974 summit indirectly endorsed the Monnet plan by agreeing to hold such
meetings regularly, thereby launching the European Council. With this final burst of energy, Action Group on Market Access
Monnet called for an end to the work of the Action As part of an effort to promote EU exports, in
Committee.
1996 the Commission developed a European MarSome aspects of the Actions Committee's ket Access Strategy for trade and investment and
work merit further comment. The reason for the set up an "action group" to field enquiries from
exclusion of business and industry groups, for ex- businesses regarding trade policy questions. The
ample, is not immediately evident, but Monnet group seeks to improve EU exporters' access to
was convinced (perhaps from his extensive deal- other markets and to sharpen EU trade policy.

Adenauer, Konrad (1876-1967)

Active Abstention
See

CONSTRUCI1VE ABSTENTION.

ACUSE
See

ACTION COMMITTEE FOR THE UNITED STATES

OFEUROPE.

Additionality
Additionality is a rule that EU funds for regional
development must be allocated in addition to, not
instead of, member state funds. The Commission
carefully monitors member state compliance with
additionality rules in the disbursement of structural funds.
See also COHESION POLICY.

Adenauer, Konrad (1876-1967)

Konrad Adenauer, first chancellor (1949-1963) of
the Federal Republic of Germany (FRG), was one
of the founders of the EC. Adenauer dominated
the period of reconciliation with Germany's western adversaries of World War II, orchestrated the
entry of West Germany into the West European
system of states, and with Alcide de Gasperi of
Italy and Robert Schuman of France helped shape
the early phase of European integration along
Christian Democratic lines.
Adenauer was born in Cologne, where his father was a secretary in the law courts and his
mother's farnily was politically influential. The
product of a Roman Catholic and strongly conservative environment, he studied law at the universities of Freiburg, Munich, and Bonn before entering
the Cologne state prosecutor's office (1901). At the
same time he became involved in local politics, as
a member of the Roman Catholic Center Party, and
was elected to the City Council (1906). His outstanding work as head of the city's wartime food
department led to his election as lord mayor
(1917), a post he held until the Nazis came to
power in 1933. He also served simuItaneously in
the Prussian state parliament and was informally
considered for the chancellorship of Germany several times during the 1920s. During the tidal wave
ofrevolution that swept Germany during 1918 and
1919, he was one of only two big city mayors to
retain office. As mayor he oversaw the reestablishment of the University of Cologne, the creation of

a magnificent park system, and large-scale industrial development. In the increasingly volatile political elimate of Weimar Germany, Adenauer
advocated a political union of Catholics and
Protestants across the traditional sectarian party divide to combat what he saw as socialist elass struggle on the extremes of German politics.
As an opponent of the Nazis, he was not forgiven when they came to power in 1933 for his action of forbidding the flying of Nazi flags from
Cologne's civic buildings when Hitler made a triumphal entrance to address a party rally. As a result Adenauer was dismissed and briefly imprisoned by the Gestapo. There followed years of
arrests, escapes, imprisonments, and exile. He was
never flagrant enough in his opposition to be executed, but he came elose; at one point he was
scheduled to be transported to the infamous death
camp of Buchenwald. As the war drew to a elose,
the Americans asked hirn to res urne the governance of Cologne, a city that lay in ruins. Adenauer got on less weIl with the British, who replaced the Americans as the occupying power in
that part of Germany. The British disrnissed hirn
in October 1945, ostensibly for refusing to allow
the felling of trees for firewood in the Green BeIt
that he had created around Cologne in his first
term as mayor. He went on to help organize a new
political party, the Christian Democratic Union
(CDU), a center-right grouping encompassing
both Catholics and Protestants.
As the Cold War evolved, the Western occupying powers merged their zones and called for
elections in 1949. Adenauer was chosen as chairman of the council that drafted the Basic Law
(constitution) ofthe FRG and went on in the elections to lead the CDU to a narrow victory. He subsequently won three more general elections (1953,
1957, and 1961). At the age of seventy-three, Adenauer thus became the first chancellor of the
newly established Federal Republic of Germany,
an office he would hold for fourteen years, the
longest incumbency since Bismarck's and until
that of Helmut Kohl. His age was an advantage,
representing a pre-Hitler democratic tradition, and
he came to be nicknamed Der Alte ("the old one").
Adenauer left much of domestic economic
policymaking to his finance minister, Ludwig Erhard, who helped produce the West German economic mirac1e. Adenauer concentrated on the
restoration of Germany's international standing.

Ad-hoc Committee on a People's Europe

To accomplish this, Adenauer simultaneously pursued the establishment of a close working relationship with the United States, Franco-German
cooperation, West European integration, and the
general rehabilitation of Germany's international
standing. As part of the latter he concluded the
Luxembourg agreement for reparation to Israel
(1952).
The Allies wanted West Germany frrmly
aligned with the West and supported Adenauer in a
way reminiscent of their support for Gustav
Stresseman in the 1920s. Adenauer's greatest difficulty came over the rearming of Germany. NATO
had been established in 1949, and in the wake of
the Korean War the United States wanted West European countries to play a greater role in their own
defense. German rearmament was a possible solution. French concerns over German rearmament
were met by admitting Germany to the European
Defense Community (EDC), where German forces
would serve under Allied command. Simultaneously, in May 1952 the Western Allies concluded a
treaty ending the occupation. However, such ideas
so soon after the war outstripped French popular
opinion, and the French National Assembly rejected the treaty in August 1954, causing the EDC's
collapse. But the United States and Britain were determined to have Germany playa role in the defense of Europe and he1ped to sway France. Under
the terms of the Paris treaties (October 1954), Germany was granted tull sovereignty and admitted
into NATO on May 5, 1955. Following a plebiscite
two years later, the Saarland was returned to Germany from French occupation.
Adenauer saw that the key to reestablishing
Germany's position and West European stability
lay in Franco-German cooperation, and he worked
assiduously for this. He worked close1y with the
French foreign minister, Robert Schuman, and
Schuman's assistant, Jean Monnet, on the creation
of the European Coal and Steel Community, as weIl
as with its successor, the European Economic Community. Adenauer developed a good relationship
with Charles de Gaulle after he retumed to power in
France (1958), and Franco-German cooperation became the cornerstone for the creation of a new Europe. This revolution in West European diplomacy
was sealed in the 1963 Treaty of Friendship and
Reconciliation (the Elysee treaty), which symbolica11y marked the end of Adenauer's tenure of office.
Adenauer saw the postwar world as one divided between the democratic and capitalist West

and the authoritarian and communist East. AIthough eighteen million Germans remained under
Soviet control in East Germany, he rejected any
compromise with the Soviet bloc and any suggestions for the subservience of West Germany, even
at the cost of German unification. Adenauer
staunchly supported the containment policy of the
United States, in which West Germany was a
frontline state, and U.S. secretary of state John
Foster Dulles's "policy of strength" against the
Soviet bloc. The division of Germany was ultimately symbolized by the erection of the Berlin
Wall in 1961.
Adenauer resigned in 1963, in part over the
Spiegel affair, in which it appeared that he had
countenanced attempts by his defense minister to
interfere with the civil rights of that magazine's
editor. Although increasingly authoritarian in his
last years in office, Adenauer remained a firm democrat. Indeed, one of his greatest legacies was
the creation of a stable and resilient democratic
Germany.
See also DE GAULLE, CHARLES; GERMANY.

Bibliography

Adenauer, Konrad. 1966. Memoirs. Chicago: Regnery.

Schwarz, Hans-Peter. 1995. Konrad Adenauer: A German Politician and Statesman in aPeriod 0/ War,
Revolution, and Reconstruction. Providence, RI:
Berghahn Books.

-Erik Goldstein

Ad-hoc Commlttee on a
People's Europe
See ADONNINO COMMITIEE.

Ad-hoc Commlttee on
Instltutlonal Affalrs
See DOOGE COMMITIEE.

Ad-hoc Group on Immigration

The Ad-hoc Group on Immigration of EU member
state representatives discussed asylum and immigration before the Treaty on European Union
(TEU) formally included such issues under Pillar
Three (Justice and Horne Affairs) of the EU. Under the TEU, the Committee of Permanent Representatives was given official responsibility for the
group's work.

Airbus

Adonnlno Commlttee
At the end of the European Council in Fontainebleau in June 1994, French president Franc;ois Mitterrand urged the establishment of two ad hoc committees to prepare reports on prospects for deeper
European integration: one to consider aspects of
European integration having an obvious impact on
the everyday lives of the member states' citizens
(such as education, training, and travel); the other
to undertake the much more important task of recommending political, economic, and institutional
reform in the Ee. In the fall of 1984, two such committees, made up of personal representatives of the
heads of state and government and their foreign
ministers, were established: the Ad-hoc Committee
on a People' s Europe and the Ad-hoc Committee on
Institutional Affairs. The former became known as
the Adonnino Committee, after its chairman, Pietro
Adonnino. It produced areport entitled Citizen's
Europe, with recommendations to simplify border
controls, raise travelers' allowances, lift the tax exemption limit on small postal consignments, grant
mutual recognition of diplomas and exarninations,
and allow citizens of one member state to reside
and work in another member state. The Adonnino
Committee's work and report were overshadowed
by those of the Ad-hoc Committee on Institutional
Affairs (known as the Dooge Committee), which
had a much greater impact on the deve10pment of
European integration in the mid-1980s.

Advanced Communlcatlons
Technologles for Europe (RACE)
Concerned about Europe's declining competitiveness in the rapidly changing field of information
technology, the Commission and a number of
leading European firms collaborated to develop
the RACE program for research and development
in advanced communications technologies, which
the Council of Ministers approved in 1987. The
first RACE program (1988-1992), which was
largely exploratory, was part of the EC's second
framework pro gram for research and development; the second RACE program, which helped
member states introduce Integrated Broadband
Communication (IBC) services in 1995, was
adopted under the third framework program.

AER
See

ASSEMBLY OF EUROPEAN REGIONS.

Afrlcan, Carlbbean, and Paclflc

(ACP) CountrIes
The EU has a generous but faltering trade and aid
assistance program, called the Lome convention,
with over seventy African, Caribbean, and Pacific
(ACP) countries, all former colonies of EU member states.
See also LoME CONVENTION.

Agenda 2000
On July 16, 1997, a month after agreement on the
Amsterdam Treaty, the Commission issued
Agenda 2000, a detailed strategy for deepening
and enlarging the EU, including opinions on the
membership applications of the ten Central and
Eastern European states.
See also CENTRAL AND EASTERN EUROPEAN
STATES; COHESION POLICY; COMMISSION; COMMON
AGRICULTURAL POLICY; ENLARGEMENT.

Airbus
Airbus began in 1967 as a consortium ofEuropean
aircraft manufacturers to produce large passenger
planes in competition with U.S. manufacturers,
notably Boeing. Airbus is a Groupement d'Interet
Economique, a French legal construct meaning
that it makes no profits or losses in its own right.
These accrue to the four partners: British Aerospace, Construcciones Aeronauticas S.A. (CASA)
of Spain, Daimler-Benz Aerospace (DASA) of
Germany, and Aerospatiale of France. Each partner produces parts of the aircraft, which is assembled by Aerospatiale in Toulouse, in southern
France. Airbus put its first airliner on the market
in the 1970s; by the mid-1990s Airbus had 40 percent of the global market for large passenger
planes; by the year 2000 it is expected to have 50
percent of the market. On average, Airbus planes
cost more than similar planes but save money in
the long run with greater fuel efficiency and low
maintenance costs.
The enormous start-up costs needed to get
Airbus off the ground resulted in massive government subsidization, which prompted bitter U.S.
complaints against the EC and provoked a major
U.S.-EC trade dispute in the mid-1980s. After
years of mutual accusations, negotiations, and litigation, the United States and the EC finally concluded a bilateral agreement on civil aircraft in
July 1992, which prohibited production subsidies,

A La Carte

capped direct government support for development of new aircraft, and increased transparency
of government activity in civil aircraft.
The four partners agreed in 1996 that the Airbus consortium needed to become more efficient
and profit-oriented and decided to turn Airbus into
a limited company in 1999. Following Boeing's
takeover of McDonnell Douglas, creating the
world's largest aerospace and defense company,
Airbus became the only other manufacturer of
large passenger aircraft. As part of the move to become a limited company, the partners decided in
1997 to allow Airbus to take direct control of the
bulk of its manufacturing, which hitherto the partners themselves controlled. Despite these changes
and despite the fact that the transatlantic civil aircraft dispute has been resolved, Boeing remains
bitter that Airbus owes its success to blatant government intervention. Indeed, Airbus is still a byword in the United States for subsidization and
anticompetitive practices in the EU.
See also U.S.-EU RELATIONS: TRAnE AND INVESTMENT.

14. La Carte
A la carte is an extreme form of differentiated integration in which EU member states could pick
and choose policies and programs in which they
want to participate. Because such an approach
would undermine solidarity and arguably make
the EU unmanageable, proponents of deeper integration often cite an a la carte arrangement as a
dangerous and inevitable consequence of a tendency by member states to opt out of, or threaten
to opt out of, EU obligations. The British government's refusal to participate in the Treaty on European Union's social policy provisions was an
alarming example of a unilateral opt out, fueling
fears of a trend toward an ala carte Europe.
See also DIFFERENTIATED INTEGRATION.

Amsterdam Treaty
The Amsterdam Treaty was conc1uded during a
marathon summit in Amsterdam on June 16 and
17, 1997, at the end of an intergovernmental conference (IGC) that had las ted more than twelve
months, and was signed in Amsterdam on October
2, 1997. The treaty was intended to make the EU
more relevant and appealing to its increasingly
skeptical and apathetic citizens and to prepare the

EU for the challenge of enlargement to the east.

Originating in a Treaty on European Union (TEU)
provision to revise the TEU itself-and therefore
inevitably called Maastricht II-the Amsterdam
Treaty was supposed to emphasize the EU's pertinence by improving the effectiveness of various
policies and procedures ranging from decisionmaking, to external relations, to immigration and
asylum and to enhance the EU's adaptability to
enlargement by encompassing large-scale institutional reform. In the event, despite a lengthy gestation period and an abundance of preparatory
documents, the treaty was a victim of the unfavorable political c1imate in which it was hatched.
Thus, it inc1uded few major innovations, ducked
key institutional questions, and failed to excite
much public interest.
The treaty's length and language belie its citizen-friendly image. With its more than fifty
pages of text, inc1uding numerous references to
existing treaty provisions, the document is not an
easy read. Yet the treaty will be judged by its impact, not by its appearance. How, therefore, will
the treaty accomplish the goals it set itself in the
original draft under six major headings: "Freedom, Security, and Justice," "The Union and Its
Citizens," "An Effective and Coherent External
Policy," "The Union's Institutions," "Closer CooperationIFlexibility," and "Simplification and
Consolidation of the Treaties"?
Section I, "Freedom, Security, and Justice,"
contains two chapters: the first on fundamental
rights and nondiscrimination, the second on the
progressive establishment of an area of freedom,
security, and justice. The first chapter is short and
largely dec1aratory but contains an interesting new
provision allowing for the suspension of certain
rights deriving from the treaties of a member state
found to be in breach of "the principles on which
the Union is founded." Whether or not the provision could ever be used, at least it suggests concern for the citizens of prospective member states
with poor human rights records.
The second chapter, on the putative area of
freedom, security, and justice, is of more immediate concern to existing and future EU citizens.
This chapter incorporates the Schengen agreement
on the free movement of persons between member
states-a long-delayed aspiration of the single
market-and promises to bring some aspects of
the TEU's justice and horne affairs (intergovernmental) Pillar Three into its EC (supranational)

Amsterdam Treaty
Pillar One (thereby allowing for the right of Commission initiative and qualified majority voting).
The issues concerned-external border control
and visas, asylum and immigration policy, and judicial co operation-are elose to the core of national sovereignty. Ironically, at a time of popular
skepticism toward the EU, it was popular concern
about lack of intergovemmental progress on these
issues that convinced some reluctant member
states to move them to the more effective but intrusive Pillar One. Nevertheless the five-year transition period from unanimity to qualified majority
voting (QMV) suggests that the change will indeed be gradual. By contrast, the fight against international crime will remain strictly intergovernmental, with EURO POL, the EU police agency,
staying firrnly in Pillar Three.
Despite these welcome changes, ordinary Europeans are unlikely to perceive the EU in terms of
freedom, security, and justice. But the treaty's
chapter on the subject suggests that member states
are sensitive to popular concerns about these issues
and are aware of the EU's potential for providing
results. The thirteen continental member states are
committed to opening their internal borders by
2004. This will coincide with the projected move
to QMV on external border controls. It will also
coincide with the next enlargement. Yet the provisions of the Amsterdam Treaty may be inadequate
to allay pervasive anxiety about rising crirne at a
time of rapid global and regional change.
Section II, "The Union and Its Citizens," balances states rights (an elaboration of the principle
and applicability of subsidiarity in a legally binding protocol) with limited EU competence in areas
of obvious popular concern, such as public health
and consumer protection. The most striking and arguably the least practicable chapter deals with employment. This ineludes a new title on employment
to be inserted into the Rome treaty, allowing the
Council to draw up guidelines for member states,
encourage new initiatives and pilot projects, and
establish an advisory employment committee to
promote coordination between member states.
It is difficult to be enthusiastic about this chapter. Europeans are rightly worried about high unemployment, and the EU is rightly sensitive about the
popular backlash against Economic and Monetary
Union (EMU)-a backlash that focuses on unemployment. But the measures in this chapter, like the
June 1997 Amsterdam summit's resolution on
growth and employment and its decision to hold a

special European Council to discuss jobs, are a sop

primarily to French public and political opinion.
EU-level meetings and committees cannot create
jobs; only through its single market and flanking
measures can the EU help to create an economic
climatemore conducive to employment. EMU-an
extension of the single market program-has become the battleground for contending philosophies
of economic policy: neoliberalism and market socialism. Most member states lie somewhere in between, although France (irrespective of which parties are in power) tends squarely toward the latter. If
this chapter can soothe the French and salve the
other member states' consciences while not detracting from the single market or EMU and can make
Europeans feel better about the EU, then the chapter is worthwhile and important.
Another chapter covers social policy, notably
the incorporation of the TEU's Social Protocol into
the EU proper and Britain's adherence to it. Yet the
EU's attachment to social policy is also largely deelaratory. More precisely, the EU has toned down
the conduct of its social policy since the economic
boom of the late 1980s (and the heyday of former
Commission president Jacques Delors). Hence the
irony of Britain's new Labour government's triumphantly signing on to a tarne social chapter.
Like the previous chapter on employment, the social policy chapter may at least allay some popular
concerns about the EU's indifference to ordinary
working (and not working) Europeans.
The remainder of Section II covers a variety
of likely and unlikely issues ranging from sport, to
animal welfare, to transparency (i.e., openness), to
trans-European networks and reflects the diversity
of member state interests and the scrappy IGC
process.
Section m, "An Effective and Coherent External Policy," deals extensively with the Common
Foreign and Security Policy (CFSP) and briefly
with external economic relations. The CFSP provisions inelude endowing the EU with a foreign
policy planning and analysis unit, designating the
Council's secretary-general to act as the CFSP
High Representative, reconstituting the CFSP
troika, deciding to fund CFSP as part of the Community budget, facilitating use of qualified majority voting to implement the joint actions necessary
to carry out CFSP "common strategies," and introducing a flexible, "multiple-speed" approach to
enable members who oppose a particular CFSP
activity to do so without blocking the majority

,0

Andean Community

from proceeding. The treaty strengthens the relationship between the EU and Western European
Union (WEU) without stipulating a merger, as
some member states had hoped for. The treaty also
endorses EU involvement in so-called Petersberg
tasks (peacekeeping and crisis management). To
carry out these operations, the EU would "avail itself of the WEU."
A major test of this chapter's adequacy is a
question impossible to ans wer: would the existence of a CFSP with such provisions in 1991
have prevented the outbreak of war in Yugoslavia?
Alternatively, will its existence now prevent future
"Yugoslavias"? Presumably the planning and
analysis unit will be able to identify future "Yugoslavias" in advance, and recourse to Petersberg
tasks via the WEU will enable the EU to take preemptive action. But the member states' will to take
such action remains questionable, and their ability
to do so effectively without large-scale U.S. assistance (even beyond that envisioned in the Combined Joint Task Forces) is equally uncertain.
Moreover, the Amsterdam Treaty weakens the
TEU's commitment to an eventual common defense policy.
In view of impending enlargement, the
treaty's most disappointing section is IV, "The
Union's Institutions." A Protocol on the Institutions with the Prospect of Enlargement of the EU
effectively limits the Commission to twenty members but links the abandonment of a second commissioner by the large member states to the eventual reweighting of votes in their favor. The treaty
also calls for an IGe on the composition and functioning of the institutions at least a year before the
EU's membership reaches twenty. In other respects the treaty's provisions were predictable and
uneventful: for instance, a modest increase in the
EP's legislative powers (through the virtual abolition of the cooperation procedure and the corresponding extension of co-decision) and a modest
increase in the use of QMV. Clearly, these changes
are unlikely to enhance the EU's efficiency, credibility, or legitimacy. Nor does deferring the hard
institutional questions until another IGe send a
signal by the EU of decisiveness or responsibility
to its own citizens or to the applicant states.
Section V, on flexibility, seems like a radical
departure from the EU's constitutional order. Provisions for "closer" or "enhanced" cooperation allow
groups of member states to move forward in limited
areas without waiting for all the others, provided

that a qualified majority agrees. In some respects,

this is merely a recognition of prevailing practices,
with opt ins and opt outs in a number of policy areas. Moreover, the flexibility chapter is hedged
with conditions and constraints as to its possible
use. But the codification of flexibility and the institutionalization of differentiated integration send a
striking signal in an increasingly large and diverse
EU: where necessary, some member states will proceed faster than others to achieve internal and external policy objectives. At the same time, the chapter
raises serious problems about decisionmaking procedures, the acquis communautaire, and EU representation in international organizations.
A final section, on the simplification and consolidation of the treaties, is tedious and technical
and of interest only to specialists (few lay people
read treaties, however weIl written).
The Amsterdam Treaty is not a watershed in
the EU's history. Its provisions are modest and its
probable effectiveness lirnited. It is far less integrationist than the TEU, let alone the Single European Act. Of course its objectives were correspondingly unassuming. Neverthe1ess, the treaty's
significance lies in what it and the IGe that preceded it portend: less willingness by national governments to make concessions to the Community
interest; a growing rift between large and small
member states; and the dernise of strong FrancoGerman leadership. Indeed, the Amsterdam Treaty
augurs ill for the EU's ability or willingness to
meet the daunting challenges ahead.
See also INrERGOVERNMENTAL CONFERENCE.

Andean Communlty
Under the terms of the Act of Trujillo, signed by
the leaders of Bolivia, Colombia, Ecuador, Peru,
and Venezuela on March 3, 1996, the old Andean
Pact (formed in May 1969) was relaunched as the
Andean Community. Modeled in part on the EU,
the Andean Community is a customs union with a
secretariat based in Lirna, Peru, and plans to have
a directly elected parliament. The EC and the Andean Pact established econornic ties in 1983 and
strengthened their relationship in January 1986
with the signing of the Cartagena agreement,
which committed both sides to greater market access. Co operation in other areas includes the
EU-Andean Pact dialogue on drugs, launched on
September 26, 1995.
See also LATIN AMERICA.

Ariane Rocket

Andean Pact
See

ANDEAN COMMUNITY.

Andreottl, Glullo
As foreign minister or prime minister of Italy for
much of the 1980s and early 1990s, Giulio Andreotti played an important part in the EC's revival and transformation during that time. As foreign minister, his behind-the-scenes push for a
decision at the June 1985 Milan summit to hold an
intergovemmental conference on treaty reform
isolated British prime minister Margaret Thatcher
and paved the way for the negotiations that led to
the Single European Act. As prime minister and
president-in-office of the European Council in the
last half of 1990, Andreotti helped negotiate the
landmark Transatlantic Declaration that he, Commission president Jacques Delors, and U.S. president George Bush signed at a U.S.-EC summit in
Washington, D.C., in November 1990.

Anthem
The EU anthem, adopted ftrst by the Council of
Europe in 1972, is music from the last movement
of Ludwig van Beethoven's Ninth Symphony (the
"Ode to Joy").

Antlcl Group
The Antici Group of member state officials, under
the direction of an official representing the Council presidency, Iiaises with the Commission and
the Council secretariat, coordinates a1I legislative
proposals, and prepares the agenda for meetings
of the Committee of Permanent Representatives
(COREPER).

APEC
See

11

ASIA PACIFIC EcONOMIC COOPERATION.

A" Point

Most of the legislative proposals put forward by

the Commission are highly technical and detailed
and are subject to scrutiny by working groups
made up of national officials and operating under
the auspiees of the Committee of Permanent Representatives (COREPER). There are approximately
two hundred working groups: some meet two or

11

three times during any six-month Council presidency; others, with less political momentum behind them, meet perhaps only once or twice a year.
If the working groups can agree or are near agreement so that COREPER can then adopt the proposal at its weekly meetings, the proposal becomes
an "A" point and is adopted without diseussion by
the Council. Thus COREPER is in effect responsible for the large majority of all EU decisions.
See also COMMITIEE OF PERMANENT REPRESENTATIVES.

Approximation
See

EUROPEAN STANDARDS COMMITTEE; REGULA-

TORY POLICY; SINGLE MARKET PROGRAM; STANDARDS AND CONFORMITY ASSESSMENT.

ARIANE
ARIANE is a program, proposed by the Commission in 1994 and strongly supported by the European Parliament, to subsidize translation of Iiterary works from widely used EU languages into
lesser-used EU languages--official and unofficial-and viee versa. Britain immediately criticized the program as an unnecessary expense to
ftll a need that has not been satisfaetorily demonstrated.

Ariane Rocket
Ariane, a rocket launcher used to send commercial
satellites into orbit, is produced by the European
Space Agency (with France's Aerospatiale the primary eontractor) but managed and launched by a
private company, Arianespace. Now in its ftfth
generation, Ariane has 60 percent of the world's
commercial rocket market but faces stiff competition from the Atlas-Centaur rocket, launehed by
Loekheed Martin in the United States; Russia's
Proton rocket; and China's Long March rocket. Ariane rockets are launehed from the European Space
Center in Kourou, Guyana. Ariane suffered a major
setback in June 1996 when the fust of its new generation of rockets had to be destroyed a minute after launch because of a steering fault. In general,
however, Ariane has a good performance record
(out of eighty-ftve launches in the previous sixteen
years, only seven failed). Much to the relief of the
European Space Agency, the second launch of an
Ariane-5 rocket, in Oetober 1997, was flawless.

12

AR/ON

ARION
An initiative under the EU's SOCRATES (educational policy) prograrn, ARION provides financial
assistance to facilitate visits by decisionmakers
(e.g., school and university administrators and
civil servants in education ministries) to Brussels
and to each other's countries in order to strengthen
cooperation on education in the EU.

ARISTEION
ARISTEION is a literary prize, worth ECU
20,000, awarded annually by the EU.

Artlele 189b Procedure

See CO-DECISION PROCEDURE.

Artlele 189c Procedure

See COOPERATION PROCEDURE.

ASEAN
See ASSOCIATION OF SOUTHEAST ASIAN NATIONS.

Asla-Europe Meeting
The first Asia-Europe meeting-a summit between the heads of state or government of the EU
member states (plus the Comrnission president),
China, Japan, and Korea, and the ASEAN countries-took place on March 1 and 2, 1996, in
Bangkok; the second meeting took place on April
3--4, 1998, in London. The meetings symbolized
the EU's "new strategy" toward Asia, including a
policy of "constructive engagement" with China.
Although there was progress at the Bangkok and
London meetings on some trade issues, a wide
gulf still separates the EU and its Asian interlocutors on social policy and human rights, particularly over East Timor and Burma.
See also CHINA.

Asla Paclflc Economlc

Cooperatlon (APEC)
Asia Pacific Economic Cooperation (APEC) is a
large and loose association of countries in the Pacific Rim, including some with the world's fastestgrowing economies: Australia, Brunei, Canada,
Chile, China, Hong Kong, Indonesia, Japan, Ko-

rea, Malaysia, Mexico, New Zealand, Papua New

Guinea, the Philippines, Singapore, Taiwan, Thailand, and the United States. Hoping to accelerate
global trade liberalization and promote regional
political and security cooperation, Australia took
the initiative in 1989 that led to APEC's formal establishment at a summit in Seattle in 1993. Although APEC is a striking exarnple of embryonic
regional integration, its membership is too diverse
to form an economic or political organization similar to the EU.

Assembly of European
Regions (AER)
In 1985, on their own initiative, representatives of
individual regions came together and formed the
Assembly of European Regions (AER), a pan-European interest group that sought a formal role in
EC decisionmaking. The Comrnission, partly for
reasons of democratic legitimacy and partly also
because it saw regionalism as integral to federalism, supported the AER's efforts to give regions
and localities a greater sense of involvement in the
Ee. But AER itself was too large and unwieldy to
play such a role, and some of its members were not
even in the Community (AER subsequently grew to
include three hundred regions from twenty-three
countries). Accordingly, the Comrnission pursued
regional involvement in EC decisionmaking by
proposing, in the 1991 intergovemmental conference on political union, a new institution (independent of the AER) to represent regional interests.
This was the origin of the Comrnittee of the Regions, in which many of AER's member regions
(i.e., those within the EU) are represented.
See also COMMITTEE OF THE REGIONS.

Assent Procedure
This is one of four decisionmaking procedures involving the European Parliament (EP)--the others
are consultation, cooperation, and co-decision.
The assent procedure is used for only a limited
range of normallegislation and is designed primarily for certain sensitive constitutional and political issues and for some types of international
agreements. Under the procedure the Council of
Ministers unanirnously adopts a position (usually,
but not always, on the basis of a Comrnission proposal); the Council's position is referred to the EP.
The EP may give or withhold its assent; in most

Association of Southeast Asian Nations (ASEAN)

cases, only a nominal majority is required rather

than a majority of all members. The EP has no
power of amendment; if it gives its assent, the
Council adopts the proposal. Areas covered by the
assent procedure inelude the accession of new
member states, international agreements with certain budgetary or legislative implications, uniform
procedure for elections to the EP, right of residence and freedom of movement, organization
and objectives of the structural funds and the cohesion funds, and special tasks to be administered
by the European Central Bank. The scope of the
assent procedure was increased by the Amsterdam
Treaty to cover a new provision: sanctions in the
event of a serious and persistent breach of fundamental rights by a member state.
See also DECISIONMAKING PROCEDURES.

Asslzes

In November 1990, on the eve of the intergovern-

mental conferences (lGCs) that resulted in the

Treaty on European Union (TEU), a conference of
parliaments was held in Rome. The so-called assizes brought together 173 members of national
parliaments and 85 members of the European Parliament (EP) in order to adopt a resolution on the
impending IGCs. Subsequently, in a deelaration
on the role of national parliaments in the EU, the
TEU recognized the importance of interparliamentary control mechanisms for the success of
European integration, and another deelaration invited both the EP and national parliaments to
"meet as necessary as a Conference of the Parliaments." Although the latter declaration gave the
assizes a consultative role in the discussion of the
"main features of the European Union," there was
only limited enthusiasm for holding another such
conference in the framework of the 1996-1997
IGC (the earlier Rome conference 1argely supported the EP's position on the IGC by a majority
vote, thereby ignoring the concerns of parliamentarians from countries such as Britain and France).
See also NATIONAL PARLIAMENTS.

Assoclatlon Agreements
Association agreements are agreements between
the EU and neighboring countries to develop elose
economic and political relations, possibly resulting
in eventual EU membership for the associated
country. Association agreements are negotiated Ufi-

13

der Article 238 of the Treaty of Rome, which gives

the EU the right to establish with nonmember states
"association involving reciprocal rights and obligations, common action and special procedure." The
Commission negotiates association agreements,
and the Counci1 of Ministers approves them subject
to the European Parliament's assent. Association
agreements generally grant the associated country
free access to the EU's market for most industrial
products, reduced tariffs on agricultural products,
and financial and technical aid; the associated
country usually grants reciprocal concessions, although association agreements need not be symmetrical. Association agreements also cover political cooperation with a view to promoting stability
and democracy in the associated states. Association
agreements establish three bilateral institutions: an
association council, an association committee, and
a parliamentary committee. Europe Agreements are
association agreements between the EU and the
Central and Eastern European countries, which
stipulate eventual accession.

Assoclatlon of Southeast Aslan

Nations (ASEAN)
The Association of Southeast Asian Nations
(ASEAN) was formed in 1967 by Indonesia,
Malaysia, the Philippines, Singapore, and Thailand. Brunei joined in 1984 and Vietnam in 1995.
Originally an anticommunist alliance, ASEAN is
now an organization for economic co operation
composed of the fastest growing "Asian tigers."
Impressed by the EC's development, but troubled
also by the Community's seeming equivocation
about market liberalization, the ASEAN countries
decided in February 1992 to establish a free-trade
area within fifteen years. The proposed Asian free
trade association could also inelude Japan and the
two remaining newly industrialized countries in
the region, South Korea and Taiwan. The ASEAN
countries do not envision Australia and New
Zealand as part of a regional free trade area although, ironically, ASEAN forms the core group
within Asia Pacific Economic Cooperation
(APEC), an organization that Australia founded in
order to have a seat at the regional table. A decision in 1992 to institutionalize APEC by establishing a secretariat in Singapore consolidated
ASEAN's position at APEC's center.
The EC has had relations with ASEAN since
1972. Three years later the Commission and

14

Asylum

ASEAN set up a working party to promote c10ser

commercial, economic, and development cooperation. That led to a nonpreferential trade and economic cooperation agreement in 1980, which
both sides have renewed every two years since
the original agreement expired in 1985. The EC
and ASEAN sought in the early 1990s to negotiate a new agreement that would improve upon
the 1980 accord by inc1uding provisions for trade
dispute resolution and European Investment
Bank (EI) lending. Progress stalled during Portugal's Council presidency in early 1992, however, over Indonesia's abysmal human rights
record in East Timor, a former Portuguese colony
that Indonesia annexed in 1975. Another human
rights dispute, over military rule in Burma, is
also a source of EU-ASEAN friction, with some
ASEAN countries eager to admit Burma as a
member and the EU urging Burma's international isolation.
See also ASIA PACIFIC ECONOMIC COOPERATION.

Asylum
See under IUSTICE AND HOME AFFAIRS.

Atlantlc Alliance

See NORTH A1LANTIC TREATY ORGANIZATION.

Audlovlsual Guarantee Fund

Proposed by the Commission in November 1995
as part of a developing EU cultural and audiovisual policy, the Audiovisual Guarantee Fund
would promote, through guarantees in any form
permitted by law, the production of European
works of fiction for cinema or television aimed at
European and international markets as weIl as
promote the companies creating such works.
See also AUDIOVISUAL POLICY.

Audlovisual Pollcy
Efforts by the EU to establish an audiovisual policy at the European level date back to the mid1980s, when the Commission proposed action in
three fields: technological aspects of television
transmission and reception, cinema film and television production, and a measure to permit national television broadcasts to circulate freely

within the EC. The Commission addressed problems in the last two areas from economic and legal
points of view, the action being designed to counteract fragmentation of the markets in the cinema
field, to take into account different degrees of national aid to film production in member states, or
to permit television broadcasts, deemed by the
Court of lustice to be "services," to circulate
freely within the Ee.
Cultural matters entered into Community
competence much later, with the entry into force
of the Treaty on European Union on November 1,
1993. The audiovisual sector is specifically mentioned in Artic1e 128, dealing with culture. However, the reference is a weak one: "action in support of cooperation between Member States" may
be taken in the area of "artistic and literary creation, inc1uding in the audiovisual sector." More
important for film production is paragraph 4 of
Artic1e 128, which states that "the Community
shall take cultural aspects into account in its action under other provisions of this Treaty."
In fact, films are a meeting point between big
business and culture. When we talk about film
production in Europe, is our motivation the need
to build up an economic sector and to provide
greater employment? Or are we thinking about the
wonderful films that European countries used to
produce and about the potential impoverishment
of our national and regional cultures if we cannot
remobilize our European creative, directorial, acting, and technical talents in the film and television
area? Of course we are thinking on both lines at
once: economic and cultural strands are intertwined. No doubt the EU pays more attention to
the film and television program industry than the
general economic principle of free competition
enshrined in the treaty might lead one to expect,
but there are many precedents for economic support in such diverse fields as coal, steel, shipbuilding, and transport. This dual approach leads to a
certain flexibility in strategy: an economic stance
may weIl give a more effective result than a cultural one; however, if the Community is attacked
for infringing economic principles, it is liable to
invoke a cultural interest.
These considerations should be borne in
mind in the examination that follows of two major
audiovisual policy initiatives: (1) the Television
Without Frontiers Directive and the MEDIA program; (2) a multilateral development affecting audiovisual policy, the Uruguay Round of the GATT.

Audiovisual Policy

Genesis of Community Audiovisual Policy

In the European debate in the late 1980s, all could
agree on the need for a thriving Europe-based film
and television industry capable of stemrning the
long decline in cinema attendance and able to provide quality television programs for the already
expanding numbers of television channels. It was
feIt by many that without such a thriving industry,
viewers would not have any real widening of
choice from the expansion of channels, because
these would all be swamped by film and television
production from outside sources, notably the
United States.
The thriving U.S. film and television industry
provided many lessons for the European industry,
which lacked all of the following necessary elements: a large internal market, instead being split
into aseries of national markets; any stable financial base, making it difficult to attract risk capital;
a solid basis for transnational distribution of cinema films; a flexible cinemaltelevision relationship, with public broadcasting corporations only
just beginning to turn to independent film companies for programs. In spite of the handicap of having to work in different languages and with different cultural traditions in Europe, the Community
decided to undertake legislative action to bring
about conditions for a thriving Europe-wide film
and television industry.
An important landmark was the September
30-0ctober 2, 1989, European Audiovisual Conference in Paris, which brought together European and national authorities and representatives
of all sides of the film and television sector. Many
representatives were hostile to the proposed Television Without Frontiers Directive, then in its final stage of negotiation, because they saw it as
giving the U.S. industry even greater opportunities than it already had to dominate the European
audiovisual scene, without any particular advantage for the Europeans. Commission president
Jacques Delors countered opposition by announcing that the Commission would propose assistance to European film and television production,
later to become the MEDIA program. The Television Without Frontiers Directive was adopted by
the Council in Bmssels on the day after the conference.
Television Without Frontiers Directive
The Television Without Frontiers Directive (the
full title is Directive on the Coordination of Cer-

15

tain Provisions Laid Down by Law, Regulation or

Administrative Action in Member States Concerning the Pursuit of Television Broadcasting Activities) sets out at the European level measures for
ensuring free circulation throughout the Community of national television broadcasts. Member
states had the duty to transpose these measures
into nationallaws, regulations, or administrative
provisions by October 1991.
The main principle of the directive is that
"Member States shall ensure freedom of reception
on their territory of television broadcasts from
other Member States for reasons which fall within
the fields coordinated by this Directive" (Article
2.2). The state in which the broadcaster is established is responsible for ensuring that a broadcast
fulfills common standards in certain coordinated
fields, thereby allowing the broadcast to circulate
freely within the Community without being subject to any restrictions by a receiving state.
The directive covers the following fields: national or linguistic quotas applied to their national
television channels by most member states, television advertising (including quantity and periodicity, general ethical mIes, cigarettes and other tobacco products, medicinal products and medical
treatment available only on prescription, alcoholic
beverages, protection of minors, and sponsorship
ofprograms), and right ofreply.
A common standard was superimposed on
the national or linguistic quotas by prescribing under Article 4 that member states should ensure
"where practicable and by appropriate means"
that broadcasters reserve a majority proportion of
their transmission time (excluding news, sports
events, games, advertising, and teletext services)
for European works. The Council adopted this article with great difficulty, and then only with the
addition of the words "where practicable," which
took away much of its force. Its two purposes-to
coordinate language quotas applied to television
transmission time by individual member states in
a right of establishment directive and to ensure the
maintenance of European languages and cultures
expressed through audiovisual media-sit uneasily together.
The directive also urged member states to ensure "where practicable and by appropriate
means" that broadcasters reserve at least 10 percent of their transmission time (excluding news,
sports events, games, advertising, and teletext services) for European works created by producers

16

Audiovisual Policy

who are independent of broadcasters (Artiele 5).

Alternatively, broadcasters should be able to devote 10 percent of their programming budget for
the same purpose.
The effect of the quotas is unelear. It has not
been demonstrated that member states television
channels take more programs from other member
states than they otherwise would have done or that
programs from non-European countries have been
turned away from European national television
channels because of the regime. However, the
quotas have provided a rallying point for those interested in promoting European films and television programs.
In early 1995 the Commission presented a
new directive modifying the Television Without
Frontiers Directive. For the sake of uniform application of quotas, the Commission proposed taking
out the words "where practicable" from Artieles 4
and 5. It wished to make Artiele 4 more flexible in
other ways and, as a concession to those who opposed quotas, the Commission proposed to end
the quotas regime after aperiod of ten years. The
procedure for examining the proposal (Artiele
189b, co-decision of the European Parliament and
the Council) is time consuming. Thus far, the Parliament has delivered an opinion, and the Council
has formulated a common position: the Parliament
has opted in favor of a stronger quotas regime than
the Commission (the same position as the Commission in Articles 4 and 5 but striking out the
limitation of further quota operation to ten years),
whereas the Council compromise retains Artieles
4 and 5 as they are in the 1989 Directive and replaces the ten-year limit with an impartial review
of the quotas after five years.
Yet differences on the quotas issue should not
obscure solid progress on more rigorous methods
of determination of the country having jurisdiction
over a broadcaster, teleshopping, self-promotional
channels, exarnination of new methods of restricting access of minors to programs that might be
harmful to their moral development, and certain
technical issues.
MEDIA Program
More direct support for the cinema, film, and television program industry came from the MEDIA
program, adopted by the Council in December
1990 and endowed with ECU 200 million for a
five-year period. MEDIA did not aim to subsidize
production or coproduction of individual films but

to deal with such major aspects of the industry as

distribution, exhibition, and promotion; production conditions; investment; business training;
marketing; and developing potential in countries
with a weak production capacity. Nineteen different agencies were set up to operate projects in
these areas, for which the participants would pay
half the cost and the Community the other half.
Despite some good results in stimulating particular initiatives and trans national cooperation
among businesses, the Commission reported in its
introduction to the MEDIA 11 proposal that financial resources were insufficient and were spread
so thinly over a large range of activities that no decisive structural changes could be made. Accordingly, the Commission sought to concentrate on a
limited number of objectives, to devote the finances available to fulfilling these objectives, and
to give MEDIA a more centralized administrative
structure with a view to more effective implementation of the program. MEDIA 11 eventually received an allocation of ECU 310 million for the
five years 1996-2000.
A Commission report in February 1995 provided some telling statistics: cinema attendance in
the EU had dropped from 1.2 billion in 1978 to
550 million in 1993, and the market share of European films had fallen to 20 percent of the audience; hours of television broadcast by European
channels had doubled since 1988 (from 500,000
hours to 1 million), without any corresponding increase in the production of European works; the
number of channels could exceed 500 by the end
of the century, and broadcasting hours could rise
to over 3.5 million; and the EU's audiovisual
deficit with the United States, already some $3.6
billion, continued to grow.
The Commission's effort to concentrate
MEDIA 11 on a small number of key areas met
considerable opposition in the Council. Some
member states argued that rather than compete
with the United States, it would be better to keep
filmmaking very elose to cultural roots, respecting
cultural diversity in the EU, even if this meant encouraging quality films with a limited distribution
because they were made in a language spoken by
inhabitants of a small country or region. Some
agencies of the first MEDIA program, candidates
for liquidation in the Commission's drive for a
more centralized approach, conducted a campaign
for survival, often supported by the country in
which they were situated.

Audiovisual Policy

Appropriate reactions to these problems were

found, and the Commission's proposal remained
more or less intact in the revised version finally
adopted, which is much more focused and flexible
than the first MEDIA program. Its main features
are as folIows:
1. Development, or preproduction, receives
special attention because of the perceived weaknesses of European filrnmakers in this area. Measures concern writing techniques, financial
arrangements, business planning, and networking
with other companies as weIl as the special needs
of companies in the sector of new technology and
animation.
2. Distribution (cinema, video, television)
constitutes the biggest part of the program and
may absorb up to two-thirds of the funds available, mostly for the weakest part of the European
film and television sector: cinema film distribution. A first method of assistance is a classic system of (repayable) subsidies to cinema distributors
for projects aimed at bringing European distributors together or encouraging distribution of European cinema films. Under the second method of
assistance, which is experimental for the first two
years, a subsidy can be provided to European distributors proportional to attendance at European
films in cinemas of EU countries other than the
film's country of origin. Distributors can invest
this subsidy to produce European films that have a
distribution potential on the European market, to
meet editorial costs (copying, dubbing, and subtitling), and to meet promotion and advertising
costs. The idea is therefore to strengthen European
distributors and give them an incentive to develop
a closer relationship with the production sector.
3. Action in the area of training is concentrated on down-to-earth organizational aspects of
film development, production, and distribution. It
should facilitate exchanges of film school teachers
and students, as weIl as professionals, through
grants and work placements.

Audiovisual Guarantee Fund

High interest rates and the reluctance of European
financiers to invest in films and television programs made by independent firms have long been
recognized as big problems for the European industry. The establishment of a guarantee fund for
audiovisual production is accordingly a key element in the Commission's strategy, outlined in a

17

proposal to the Council on November 30, 1995.

The objective of the fund is to promote, through
guarantees in any form permitted by law, the production of European works of fiction for cinema
or television aimed at European and international
markets as weIl as to promote the companies creating such works. The fund would not deal with
production companies directly but rather with financial institutions intending to provide capitaI to
them. In this way only projects that financial institutions consider viable will be considered by the
fund for assistance. Guarantees would cover up to
50 percent of loans and individual credits, so that
the risk would be covered half by the guarantee
fund and half by the financial institution concemed.
The Uruguay Round
The V.S. side in the Uruguay Round of the GATI
called for the abolition of European quotas in the
Television Without Frontiers Directive and the
withdrawal of subsidies to filmmaking within the
MEDIA program and within national film-support
programs. In response, a vociferous part of the European side called for a "cultural exception" to be
added to the basic exceptions on grounds of public
morals, health, and so on. At the climax of the
taIks in December 1993 the whole issue, by mutual agreement, disappeared without a single reference to a "cultural exception" in the proposed
agreement or in its offshoot, the General Agreement on Trade in Services (GATS).
No services sector was in fact excluded from
the GATS. The principle of most-favored-nation
treatment is laid down as a general commitment.
However, exemptions are permitted, although in
principle they should not exceed ten years. The
Community and its member states notified the
new World Trade Organization (WTO) of an exemption of unlimited duration for the directive
and the MEDIA program. The issues could come
up again in the GATS as part of horizontal issues
affecting tariffs or subsidies, but exchanges on
them are likely to be less aggressive than in the
past.
Generally, good U.S.-EU relations are encouraged by the Transatlantic Declaration of November 1990 and by the New Transatlantic
Agenda and Joint Action Plan signed by U.S.
president Bill Clinton, Council president Felipe
GonzaIez, and Commission president Jacques Delors on December 3, 1995. In both of these agree-

,8

Audit Board

ments cultural cooperation is mentioned, and the

paragraph of the action plan conceming artistic
and cultural cooperation states that ways and
means should be studied to encourage "co-production of films and television programs." AIthough part of the action plan is devoted to consolidating the WTO and another to "information
society, information technology and telecommunications," it is worth noting that no other reference
is made to film or television.
Concfusion

Until the year 2000, the EU will have available to

it as instruments of its audiovisual policy the European quotas of the Television Without Frontiers
Directive (either strengthened or more probably as
they currently stand), the MEDIA n program, and
probably some form of financial guarantee fund.
The revision of the Television Without Frontiers
Directive provides for an independent study on the
impact of the quotas for European works on national television channels after five further years
of operation, and the MEDIA n program allows
for an evaluation of the results at the end of the
five-year period. Many will continue to question
the existence of the quotas, and the EU's justification of remedying market imperfections and structural weaknesses cannot be accepted eternally.
The EU will need to use its instruments wisely, in
favor of a thriving European industry able to play
its part for culture and employment.
See also AUDIOVISUAL GUARANTEE FUND;
TELEVISION WITHOUT FRONTIERS.

Alan Forrest

Audit Board
The Court of Auditors, established in 1975, replaced the Audit Board, apart-time body endowed
with modest resources and lacking either the status or the independence of its successor. Nevertheless, the board advanced the principle and practice
of financial accountability in the EC.
See also COURT OF AUDITORS.

Austrla

The new, post-World War n Austrian state was a

founding member of the Organization for European Economic Cooperation (OEEC) and had observer status in the Council of Europe. But when

the core European countries went one step further

by creating the European Coal and Steel Community (ECSC), Austria stayed outside because the
Soviet Union (which still occupied part of Austria) insisted on an independent Austria's nonaligned status. With the 1955 "Moscow memorandum," Austria's govemment agreed to adopt the
Swiss model of neutrality. For nearly four decades
to come, this type of neutrality was generally considered incompatible with EC membership
(Schneider, 1990). Nevertheless, some eloser economic ties with other western Europeans were
knit, as Austria was a cofounder of the European
Free Trade Area (EFTA) in 1960 and coneluded a
free-trade agreement with the EC in 1972.
The single market program and the enthusiastic predictions of the Commission-sponsored Cecchini Report in the mid-1980s propelled Austria to
jump onto the moving EC train. The internal political situation had changed, too: the then pro-integration Liberal Party (FPO) had joined the govemment, and factions of the Conservatives (OVP),
but soon also of the Social-Democrats (SPO),
started pressing for accession. Furthermore, several prominent lawyers suddenly deemed neutrality and EC membership compatible. In 1987, the
grand coalition (SPO/OVP) advocated greater integration but not yet in the form of full membership. In elose connection with the revolutionary
developments in Central and Eastern Europe,
however, domestic political opinion shifted in favor of fuH membership. Accordingly, Austria applied to join the EC on July 1, 1989.
By that time, however, the EC's strategy was
to deepen integration rather than enlarge further.
Consequently, as an EFTA member, Austria participated in the negotiations to establish a European Economic Area (EEA), an arrangement with
many single market features but one that exeluded
agriculture, foreign trade, and active participation
by the non-EC members in EC decisionmaking.
Even before the EEA entered into force, EU
"deepening" went ahead with the Treaty on European Union (TEU). Therefore, membership negotiations were opened between the EC and Austria
as early as February 1993. These were easier than
former accession negotiations because the bulk: of
economic integration had already been accepted
by Austria under the terms of the EEA. The big
outstanding issues were the fate of the EEA transit
trafik agreement, which provided for a system of
so-called ecopoints for transits through the highly

Austria
environmentally stressed Austrian Alps; transition
periods for Austrian agricultural markets with
comparatively higher price levels; and restrictions
on selling real estate to other EU citizens (Falkner,
1995). Surprisingly, Austria's neutrality was a
nonissue: not only were some politicians willing
to discuss the possibility of Austria's accession to
the Western European Union (WEU) and NATO
but also the government expressed willingness to
participate actively in the EU's Common Foreign
and Security Policy (CFSP).
The ensemble of necessary adaptations to
Austria's federal constitution, as a result of the accession agreement, amounted to a so-called fundamental change and therefore necessitated a popular
referendum. With only the small Green party, the
"new" Euroskeptic and populist FPO, and purely
privately funded citizen action groups arguing
against EU membership, a majority of 66.6 percent
voted in favor of joining in the referendum on lune
12, 1994. Accordingly, Austria joined the EU on
lanuary 1, 1995 (Pelinka, 1994; Kaiser, 1995).
Because the EU's democratic deficit in general, and the loss of influence of the Austrian parliament in particular, were major issues in the referendum campaign, Austria's Federal Constitution
was changed to inc1ude provisions (similar to
those in Denmark and Germany) tying Austria's
representatives in the Council of Ministers to possible mandates of the chamber of representatives
(Nationalrat). The unfortunate example of the
1995 directive on animal transport (when the minister of agriculture was outvoted because of a toonarrow mandate from the national parliament)
showed that the Nationalrat was still in the process
of leaming how to use this tool strictly enough to
safeguard its own influence but at the same time
flexibly enough not to hamper decisionmaking at
the European level.
After a lively debate, Austria is being represented in the European Council not by its federal
president (who has mainly representative functions) but by the federal chancellor, supported by
an undersecretary of state for European affairs.
Within the current coalition government there is
much rivaIry on EU competences between this undersecretary and the minister of foreign affairs.
The first direct Austrian elections for the EP took
place in September 1996; until then Austria's
twenty-one members of the European Parliament
had been elected indirectly by parliament
(Morass, 1996). The result bore out what opinion

19

polIs already showed: dissatisfaction with the EU

was high.
Because of strong economic ties and similar
legal standards, Austria often finds itself voting in
the same group as Germany (e.g., on monetary issues). However, Austria also has particular interests as a small and (still) neutral member state.
One area of distinct concern is environmental policy, Austria being proud of its progressive standards. On the basis of a recently decided austerity
program to consolidate Austria's federal budget,
Austria expects to be in the first group of states to
participate in Economic and Monetary Union
(EMU)-a dec1ared aim of the political elite. Areas of conflict with the Comrnission over the irnplementation of EC law concern the anonymity of
saving accounts, the introduction of motorway
tolls, the nontransposition of the EC public procurement rules, several subsidies, and state monopolies. Although Austria is one of the smaller
countries in the EU, it is also one of the wealthier:
it is a net-contributor to the Community budget,
and only one of its regions (Burgenland) is eligible for "Objective 1" subsidies under the structural funds (TondI, 1996).
After only three years of membership, it is
too early to draw definitive conc1usions as to possible changes in Austria's political system. However the influence of the federal government was
undoubtedly enhanced at the expense of parliament and the Lnder, the federal entities of Austria. The role of the famous "social partnership"
seems not seriously challenged so far, as the major
interest groups participate in the elaboration of the
government's EU policies as weIl as in the implementation of EC law (Karlhofer and Talos, 1996).
Yet in public discourse, European issues are still
not ranked high. Awareness of the shift of powers
to the EU and, thus, the existence of new levels of
policymaking seems low, not only among the general public but also among politicians and bureaucrats (Falkner and Muller, 1997).
See also APPENDIX 2; APPENDIX 3; TABLE 7;
TABLE 8.

BibJiography

Falkner, G. 1995. "sterreich und die Europische Einigung." In R. Sieder, H. Steinert, and E. Talos, eds.
sterreich. 1945-1995. Vienna: Verlag fr GesseIlschaftskritik.
Falkner, G., and W. C. Muller, eds. 1997. sterreich in
der Europischen Union: Konsequenzen der Mit-

20

Austria

gliedschaJt fir Politiknetzwerke und Entscheidungsprozesse. Vienna: Signum Verlag.

Kaiser, W. 1995. "Austria in the European Union." Journal of Common Market Studies 33, pp. 411-425.
Karlhofer, E, and E. Talos. 1996. SozialpartnerschaJt
und EU. Vienna: Signum Verlag.
Morass, M. 1996. "sterreich in der Europischen
Union: Strukturen der Mitwirkung in den EU-Institutionen." Informationen zur Politischen Bildung 10,
pp. 77-92.

Pelinka, A., ed. 1994. EU-Referendum: Zur Praxis Direkter Demokratie in sterreich. Vienna: Signum
Verlag.
Schneider, H. 1990. Aleingang nach Brussel: sterreichs EG-Politik. Bonn: Europa Union Verlag.
Tondi, G. 1996. "Regionalpolitik in sterreich," In G.
Strejeck and M. Theit, Regionalisation. Vienna:
Wiener Universittsverlag.

-Michael Nentwich and Gerda Falkner

Baltlc Councll

B
Balkan States

See GREECE; YUGOSLAVIA.

Balladur Plan
Coneerned about the EC's failure to end hostilities in the Balkans and eager to prevent future
"Yugoslavias" in Central and Eastern Europe, in
April 1993 Freneh prime minister Edouard Balladur proposed astability paet to provide a meehanism that would permit the Central and Eastern
European states (CEES) to normalize relations
with eaeh other eeonomieally, politieally, and soeially. Aeeordingly, in 1994 Franee hosted a Conferenee on European Stability, under EU auspiees, that brought together representatives of
forty European eountries to diseuss ethnie and
eultural rivalries. The ensuing European Stability
Pact (known unofficially as the Balladur Plan)-a
collection of treaties and agreements between the
CEES themselves and a consultative process (bilateral and multilateral) to air and resolve regional disputes with the EU acting as an intermediary when necessary-was intended to improve
European security and prepare the CEES for EU
membership. The European Stability Pact became
one of the first joint actions of the EU's Common
Foreign and Security Policy and is an example of
elose cooperation between the EU and the Organization for Security and Cooperation in Europe,
whieh is responsible for facilitating regional
round tables and monitoring the pact's implementation.
See also COMMON FOREIGN AND SECURITY
POLICY;

A PEACE AND SECURITY SYSTEM FOR

POST-COLD WAR EUROPE.

The Baltie Council-formally the Couneil of

Baltic Sea States-was formed in March 1992 at a
conference in Copenhagen of the foreign ministers of countries bordering on the Baltic Sea (Estonia, Denmark, Germany, Finland, Latvia,
Lithuania, Poland, Russia, and Sweden). Its purpose is to promote stability and sustainable development in the region. Iceland and Norway (which,
along with Denmark, Finland, and Sweden, are
members ofthe Nordic Council) are also members
of the Baltic Couneil. In response to arequest by
the European Couneil in Madrid in Deeember
1995, a Baltic Sea Region Initiative was drawn up
to provide a framework for eloser cooperation
among Baltie countries. The initiative emphasizes
planning and finaneing of large infrastruetural development and eoncrete actions to strengthen and
improve democracy and stability, trade, investment and economic cooperation, transport, energy
and nuelear safety, the environment, tourism, and
border crossing facilities.

Baltlc Sea Region Initiative

See BALTIC COUNCIL.

Baltic States
Relations between the EU and the Baltic states
(Estonia, Latvia, and Lithuania) deve10ped quickly
after the independence of the three former Soviet
republics in August 1991. The Commission proposed to allocate to the Baltic states some of the
EC's 1991 technical assistance budget for the
USSR and to extend the Pologne et Hongrie: Actions pour la Reconversion Economique (PHARE)
program of assistance to the Central and Eastern
European states (CEES). On December 23, 1991,
the Council of Ministers adopted a regulation to
supply ECU 45 million in emergency food aid to
the Baltic states. The Council agreed on September
28, 1992, to provide medium-term financial assistance to the Baltic states in order to help improve
their balance of payments and boost their reserves.
Soon the three Baltic states started following the
road of the other CEES, from trade and cooperation agreements (TCAs) to assoeiation agreements
and preparation for membership in the EU.
As early as Oetober 16, 1991, the Commission asked the Council for authorization to negoti-

21

22

Baltic States

ate TCAs between the EC and the respective

Baltic states. The Commission also mentioned the
possibility of eventually negotiating association
agreements. TCAs had already been negotiated
with the CEES, starting with Hungary in 1988.
Association agreements (so-called Europe Agreements) were negotiated with Poland, Czechoslovakia, and Hungary during 1991 and later with
Romania and Bulgaria.
The TCAs with the Baltic states were signed
on May 11, 1992. These were framework agreements for aperiod of ten years, with the goal of
developing and diversifying trade and of promoting economic and commercial cooperation. The
Baltic countries were given most-favored-nation
(MFN) treatment, and specific quantitative restrictions (QRs) were abolished. The agreements expressly mentioned regard for democratic principIes and human rights, as defined in the Helsinki
Final Act (1975) and the Charter of Paris (1990).
The signatories further adopted joint declarations on the institutions of political dialogue, including regular meetings at the highest political
level on matters of common interest. This sought
to bring the signatories' views on external policy
into closer harmony and to strengthen security and
stability in Europe.
The TCAs were endorsed by the European
Parliament (EP) on December 18, 1992, and formally concluded by a Council decision on December 21, 1992. They entered into force on February
1, 1993, for Latvia and Lithuania and on March 1,
1993, for Estonia.
In June 1993, the European Council (meeting
in Copenhagen) invited the Commission "to submit proposals for developing the existing trade
agreements with the Baltic States into free-trade
agreements" and declared that "it remains the objective of the Community to conclude Europe
Agreements with the Baltic States as soon as the
necessary conditions have been met."
The promise of Europe Agreements opened
the possibility of EU accession. Indeed, it was at
Copenhagen that the European Council stated for
the first time that "the associated countries in Central and Eastern Europe which so desire shall become members of the European Union." The summit conclusions also laid out the conditions of
membership: "stability of institutions guaranteeing democracy, the rule of law, human rights, and
respect for and protection of minorities, the existence of a functioning market economy as weH as

the capacity to cope with competitive pressure and

market forces within the Union."
In February 1994, the Council authorized the
Comrnission to negotiate free trade agreements
with the Baltic states. At the same time, the Council adopted a statement on relations with the Baltic
countries in which it acknowledged the importance of greater integration between those countries and the EU. The free trade agreements were
an important means to that end. Further, the Council promised to take "all necessary steps with the
aim of negotiating and concluding Europe Agreements as soon as possible in recognition of the
fact that Estonia, Latvia, and Lithuania's ultimate
objective is to become members of the European
Union through Europe Agreements."
At its Corfu meeting (June 24-25, 1994), the
European Council welcomed "the fact that the
negotiations with the Baltic States for the establishment of free trade areas are moving toward finalization" and went on to reiterate "that the conclusion of Europe Agreements with these
countries, which will help them to prepare for
subsequent accession, remains the aim of the
Union."
The three free trade agreements were signed
in Brussels on July 18, 1994. The agreement with
Estonia provided for free trade in all industrial
products from its entry into force on January 1,
1995, and sought to bring free and nondiscriminatory competition based on Community rules. The
agreement with Latvia provided for a two-speed
process for industrial products, with the gradual
introduction of free trade over a maximum of four
years on Latvia's part and immediate liberalization on the Community's part. The agreement with
Lithuania included a similar two-speed process
for industrial products, with Latvia given a maximum of six years to liberalize.
Specific provisions were included for textiles.
The EU granted Latvia and Lithuania consolidation of the Generalized System of Preferences
(GSP), whereas Estonia would benefit from zero
tariffs far all textile products. For agriculture and
fisheries the agreements bound the suspension of
nonspecific quantitative restrictions and established new reciprocal concessions.
Based on articles 228 and 113 of the Rome
treaty, the free trade agreements were subject only
to consultation with the EP. Nor were national ratifications necessary. The agreements entered into
force in January 1995.

Barcelona Declaration

At its meeting in Essen on December 9 and

10, 1994, the European Council requested "the
Commission and the Council to do everything
necessary to ensure that Europe Agreements can
be concluded with the Baltic States and Slovenia
under the French Presidency"-that is, during the
first six months of 1995-"so that these States can
be included in the accession preparation strategy."
The Europe Agreements would incorporate the
free trade agreements signed earlier that year and
include provisions on political dialogue and financial and cultural cooperation. The Europe Agreements with the three Baltic states were initialed in
Brussels on April 12, 1995 and were signed on
June 12, 1996. Although the agreements went far
in the direction of eventually assuring free movement of goods, services, and capital, they did not
cover free movement of people, apart from certain
rights for workers legally established inside the
EU.
The association agreements established the
usual bilateral association institutions: an association council, an association committee, and a parliamentary committee. But they also provided for
the participation of the Baltic states in the multilateral re1ationship between the EU and the other
associated countries in order to implement the
preaccession strategy drawn up by the Essen summit in December 1994. The EP approved the draft
Europe Agreements with the Baltic states on November 15, 1995.
Even before the Europe Agreements were implemented, Latvia applied for EU membership on
October 27, 1995; Estonia applied on November
28, 1995; and Lithuania applied on December 8,
1995. At its meeting in Madrid on December
15-16, 1995, the European Council declared that
the applicant countries should be "treated on an
equal basis" and added that "the European council
hopes that the preliminary stage of negotiations
will coincide with the start of negotiations with
Cyprus and Malta," countries that had been
promised that accession negotiations would start
six months after the conclusion of the 1996--1997
intergovernmental conference.
In the meantime, by virtue of signing Europe
Agreements, the Baltic states were included in the
EU's preaccession strategy, which has two main
components: preparing applicant countries for integration in the internal market and developing
structural (i.e., political) relations. The former objective is based on a white paper, "Preparation of

23

the Associated Countries of Central and Eastern

Europe for Integration Info the Internal Market of
the Union," adopted by the Commission on May
3, 1995, which lists the Community legislation
that the applicant countries should try to adopt.
Structural relations means joint meetings between
senior representatives of the EU, the CEES, and
the Baltic states, which take place regularly.
On November 29, 1995, the Commission
adopted a progress report for the European Council
on the preaccession strategy, as requested by the
Cannes summit the previous June. This report gave
a general overview of the preaccession strategy
and the political and economic situation in the
CEES. It argued that the preaccession strategy had
strengthened the political and economic reform
process in the applicant countries and consolidated
relations between the CEES and the EU. Like most
of the other Central and Eastern European applicants, the Baltic states continued to develop economically and politically in 1996 and 1997, with a
view to re1atively rapid EU accession.
Yet whether the Baltic states will be ready to
join the EU together with the most advanced
CEES remains an open question, although according to the Commission's Agenda 2000 report, published in July 1997, Estonia is likely to join before
Latvia or Lithuania. The Baltic states have good
allies among the Nordic members of the EU and
have made good economic progress. But much remains to be done. The existence and treatment of
large Russian minorities, especially in Estonia and
Latvia, are sensitive issues and a test for Baltic
democracy. The European Stability Pact (Balladur
Plan), one of the EU's first joint actions under the
Common Foreign and Security Policy (CFSP), has
tried to deal with this problem. Indeed, possible
membership in NATO, pursued in parallel by the
Baltic states, is extremely sensitive because of
Russian opposition. Precisely because NATO
membership is highly problematic, the Baltic
states are especially eager to join the EU as soon
as possible.
See also TABLE 6.

-Finn Laursen

Barcelona Declaratlon
The Barcelona Dec1aration was a pledge by the
EU and twelve neighboring Mediterranean states
(Algeria, Cyprus, Egypt, Israel, Jordan, Lebanon,

24

Belgium

Malta, Morocco, Syria, Tunisia, Turkey, and the

Autonomous Palestinian territories) at a conference in Barcelona on November 28, 1995, to establish a Mediterranean Free Trade Area by 2010
and to link it through the EU to another free trade
zone with the countries of Central and Eastern Europe. The dec1aration is the centerpiece of a new
Euro-Mediterranean Partnership, launched by the
EU and the so-called MED (Mediterranean) 12 at
the Barcelona conference.
See also EURO-MEDITERRANEAN PARTNERSHIP.

Belglum
As one of the founding member states of the European Communities, and the seat of several EU institutions, Be1gium has always been actively involved in the process of European integration.
Likewise, European integration, combined with
the gradual federalization of the country from the
1970s onward, has been one of the most influential developments in Belgium's post-1945 history
(Van Meerhaeghe, 1992). Belgian policy toward
Europe has been characterized by a high degree of
continuity. Moreover, given that all its main political parties strongly support further integration,
changes in government have not led to policy
changes in this respect.
Throughout the history of European integration, Belgian politicians, known to be masters in
the forging of political compromises, have played
a very active-at times even key-role in the
process of European integration. It was Belgian
foreign minister Paul-Henri Spaak who chaired the
group of experts that formulated and drafted the
treaties establishing the European Economic Community (EEC) and the European Atomic Energy
Community (EURATOM) in 1956 (Dumoulin,
1987). In 1974, in an attempt to invigorate the
sluggish process of European integration, the EC's
heads of state and government charged Belgium's
prime minister, Leo Tindemans, with drafting a report outlining the next possible steps on the road
toward European Union (Tindemans, 1976). The
ambitious nature of the report, which pleaded the
case for the creation of an economic and monetary
union and the development of a common foreign
and security policy, proved to be Ha bridge too far"
for many member states: as a result, the report was
not followed up in any concrete form.
The benefits of EU membership for a small
country such as Belgium have rarely been ques-

tioned. With an open economy, highly dependent

on trade, traditionally Be1gium has been a strong
supporter of trade liberalization. As early as 1921,
Belgium conc1uded an economic union with Luxembourg, known as BLEU (Belgian-Luxembourg
Economic Union). In 1945, the governments of
Belgium, the Netherlands, and Luxembourg
signed the Bene1ux treaty.
However, for successive Belgian governments, Europe has been and remains more than a
purely economic exercise. It is, in the first instance, a political undertaking that in the long
term should lead to the establishment of a European federation with a full-fledged foreign and security policy. Belgian politicians are all too conscious of the fact that it is only by integrating its
foreign policy into the larger European framework
that a small country such as Belgium can guarantee its security and make its voice heard on the international stage.
In line with this maximalist approach toward
Europe, Belgium has always been a staunch supporter of Jean Monnet's supranational Community
method, according to which the Commission has
the exc1usive right of initiative and whereby decisions are taken in the Council by qualified majority voting (QMV). As a collegial and independent
body intended to represent Community interests,
the Commission is seen as the best guarantee for
the defense of the interests of small member states
within the EU. Intergovemmentalism, on the other
hand, is associated with inefficiency and is considered to entail serious risks because the EU could
become dominated by large countries such as
France and Germany. In fact, in the early 1960s,
Belgium and the Netherlands rejected the Frenchproposed Fouchet Plan for political union on the
grounds that the proposed political cooperation
among the EC countries was to take place outside
the supranational Community framework. It is an
irony of history that, during the 1991 intergovernmental conference on political union, exactly the
opposite happened. The majority of member states
vetoed the proposal of the Dutch presidency, supported by Belgium, to integrate the draft treaty's
provisions for a Common Foreign and Security
Policy (CFSP) into the EC rather than inc1uding
them in aseparate intergovernmental pillar.
The strong pro-European attitude prevalent in
government and diplomatic circ1es is in general
also supported by the Belgian population. Unlike
the citizens of some other member states, Belgians

Benelux

do not seem to see the transfer of sovereignty from

the national to the European level as a major problem. That is because, as a young country (Belgium
was founded only in 1830), possessing varying
cultures and speaking more than one language,
Belgium lacks a strong sense of national identity.
European integration is generally seen as being
complementary to the gradual process of federalization and as providing the larger framework
within which the further devolution of powers to
the federated entities can take place without creating negative repercussions for the economy.
The fact that Belgium has developed into a
full-fledged federal state has affected its participation in the EC decisionmaking process. Since the
entry into force of the Treaty on European Union,
Belgium's federated entities-the regions (Wallonia, Flanders, and the Brussels-Capital Region)
and the communities (French-speaking, Flemishspeaking, and German-speaking)-have made use
of the possibility introduced by Article 146 of the
treaty for such bodies to participate directly in EU
Council meetings. The condition for such participation is that any decisions taken are binding upon
Belgium as a whole and not only on a particular
region or community. The way in which the different levels of decisionmaking in Belgium are coordinated is laid down in the Cooperation Agreement of March 1994 between the federal
government and the communities and the regions
(Hooghe, 1995).
Although the balance sheet of more than
forty years of Belgian participation in the European integration process generally seems very
positive, the future will present a number of important challenges. The prospect of an EU of more
than twenty-five member states has raised dual
concerns: first, that the EU could be transformed
into a glorified free trade area, postponing the creation of a European federation to the indefinite future, and second, that smaller member states such
as Belgium could be increasingly marginalized
within the decisionmaking process.
In order to prevent the disintegrative effects of
further enlargement, Belgium is in favor of the introduction of a more flexible approach toward European integration, whereby a central core of member states would have the option of integrating at a
higher speed than the remaining member states. It
goes without saying that Belgium considers itself
to be one of the future members of this central core.
This also explains why the government has been

25

implementing austerity measures aimed at meeting

the convergence criteria for Economic and Monetary Union (EMU), although Belgium has the highest national debt of any member state.
Even though Belgium's position with regard
to Europe has been characterized by a high degree
of continuity, the international environment in
which it has been defending its maximalist views
has in fact changed radically. Faced with these
changes, and with the disappointing outcome of
the 1996-1997 intergovernmental conference,
Belgium will require new strategies and a great
deal of creativity if it wishes to live up to its earlier performance.
See also APPENDIX 2; APPENDIX 3; APPENDIX
7; APPENDIX 8.

Bibliography
Boudart, Marina, et al., eds. 1990. Modern Belgium.
Palo Alto, CA: The Society for the Promotion of Science and Scholarship.
Dumoulin, Michel. 1987. La Belgique et les debuts de la
construction europeenne. De La guerre aux traites de
Rome. Louvain-Ia-Neuve: Ciaco.
Fitzmaurice, lohn. 1996. The PoLitics of Belgium: A
Unique Federalism. London: Herst.
Franck, Christian. 1996. "Belgium: The Importance of
Foreign Policy for European Political Union." In
Christopher HilI, ed., The Actors in Europe's Foreign Poliey. London: Routledge.
Hooghe, Lisbet. 1995. "Belgian Federalism and the European Community." In Barry Iones and Michael
Keating, eds. The European Union and the Regions,
pp. 135-165. Oxford: Clarendon Press.
Tindemans, Leo. 1976. "European Union. Report by Mr
Leo Tindemans, Prime Minister of Belgium, to the
European Council." Bulletin of the European Communities, Supplement 1/1976.
Van Meerhaeghe, M.A.G. 1992. Belgium and EC Membership Evaluated. London and New York: Pinter
Publishers and St. Martin's Press.

-Sophie Vanhoonacker

Benelux
Benelux is both an acronym for Belgium, the
Netherlands, and Luxembourg and the name of a
customs union among the three countries that
came into effect in 1948. A new treaty of economic union was ratified in 1960. The Benelux
customs union survives within the EU because the
Treaty of Rome permits such internal regional
groupings as long as they are compatible with the
EC's objectives.

26

Berlaymont

Berlaymont
The Berlaymont is the distinctive star-shaped
glass and steel building in central Brussels that
housed most of the Comrnission until 1992, when
it was evacuated for lengthy renovations to remove asbestos used in the original construction.
The Comrnission then moved into a number of adjacent buildings, with the commissioners themselves relocating to the Breydel building. Despite
this arrangement, the word Berlaymont remains
synonymous with the Comrnission.

Beyen Plan
The European Economic Community ffiEC) originated in a proposal in 1952 by Johan Willem
Beyen, foreign minister of the Netherlands, to extend the competence of the proposed European Political Community, part of the ill-fated European
Defense Community (EDC), by establishing a customs union and a common market. Beyen believed
that sectoral integration alone was insufficient to
promote economic development and, ultimately,
political union. Instead, the six member states
should abolish quotas and tariffs on intracommunity trade, establish a joint external tariff, unify
trade policy toward the rest of the world, devise
common policies for a range of socioeconomic sectors, and organize a single internal market. The
Beyen Plan survived the defeat of the EDC and was
a point of departure for the negotiations in 1955 and
1956 that culminated in the Treaty ofRome.

Black Monday

At a decisive foreign ministers' meeting on September 30, 1991 (Black Monday), ten of the EC's
twelve member states rejected an ambitious draft
treaty on political union, prepared by the Dutch
presidency during the intergovernmental conference that resulted in the Treaty on European
Union. The near-unanimous rejection of the Dutch
draft (only the Commission and Belgium supported it) represented a serious setback not only for
the Dutch presidency but also for the prospects of a
unitary structure for the ensuing European Union,
which instead inc1uded three separate "pillars."

Black Wednesday
On September 16,1992 (BlackWednesday), at the
height of a currency crisis caused in large part by

uncertainty over the fate of the Treaty on European Union, Britain left the Exchange Rate Mechanism (ERM) of the European Monetary System,
having spent billions trying to prop up the pound.
The lira dropped out of the ERM on the same day.

Bovlne Sponglform
Encephalopathy (BSE)
Bovine spongiform encephalopathy (BSE), a disease affecting cattle, appeared in Britain in the
1980s. In March 1996, British authorities announced a possible link between BSE and certain
cases of Creutzfeldt-Jakob disease, a human brain
condition. The British announcement caused an
immediate public health scare throughout the EU,
depressed the European beef market almost
overnight, and exacerbated Britain's already tense
relations with its EU partners. The Comrnission
and several EU member states, notably Germany,
were furious about the British govemment's failure to forewam them of the announcement. The
Comrnission took aseries of measures to protect
public health by eliminating any risk of human exposure to BSE and to restore consumer confidence
in beef and veal. Most notably, on March 27 the
EU banned exports of beef from Britain to other
EU member states or elsewhere in the world. The
British govemment reacted angrily, c1aiming that
the Comrnission and the other member states imposed the ban on political grounds, as a result of
consumer fears over BSE, rather than on the basis
of scientific objectivity.
The row overshadowed the opening of the
1996 intergovernmental conference at a special
sumrnit in Turin on March 29. Indeed, soon afterward John Major, Britain's prime minister,
launched a campaign to disrupt EU decisionmaking in an effort to pressure Brussels to lift the ban.
As a result, Britain blocked a number of decisions
in the Council of Ministers requiring unanimity,
even though Britain supported some of the measures themselves. The crisis ended at the Florence
summit on June 21 and 22, 1996, when Major
agreed to end Britain's obstructionism in return
for the European Council's approval of a phased
lifting of the ban in accordance with a Comrnission plan for the eradication of BSE.
Although the immediate crisis was over, political and economic fallout continued for some
time. First, Major's behavior antagonized his fellow heads of government and further isolated

Brittan, Leon (7939-)

Britain in the EU. Second, the drop in demand for

beef in the EU, and for EU heef worldwide, had
serious economic repercussions (EU compensation for beef farmers cost millions of ecu). Third,
in July 1996 the European Parliament (EP) set up
a temporary committee of enquiry into the Comrnission's handling of the crisis. The EP's report,
published in February 1997, concluded that the
Commission had rnismanaged the crisis, partly because it had put the interests of farmers ahead of
consumer safety. Public reaction to the crisis, and
the EP's criticism of the Commission, led to a renewed emphasis in the EU on consumer policy, a
hitherto relatively neglected area.
This, in turn, led to a showdown between the
Commis si on and the EP on the one hand, and the
Council on the other, over parliamentary involvement in agriculturallegislation. The battle ground
was a Commis si on proposal in March 1997 to label beef with its country of origin by the year
2000. By introducing the proposal under Article
100a (pertaining to the single market and consumer protection), the Commission sought to include the EP in the legislative process in order to
ensure that consumers' interests were better represented. However, the Council considered the proposal under Article 43, the traditional route for
agricultural legislation, which excludes parliamentary scrutiny. This seerningly arcane procedural dispute was symptomatic not only of the
chronic tension between the EP and the Council
over EU decisionrnaking but also of the growing
importance of consumer policy in the EU.

Brandt, Willy (1913-1992)

Willy Brandt is best known internationally for his
development of Ostpolitik-a policy of openness
toward Central and Eastern Europe-and his support for EC enlargement. As leader of the Social
Democratic-Free Democratic coalition that came
to power in Germany in September 1969, Brandt
launched Ostpolitik in the face of bitter domestic
resistance from the Christian Democrats, in opposition for the first time in the history of the Federal
Republic. The ensuing political controversy fueled
an equally contentious debate in NATO and the
EC and gave rise to the specter for Germany's allies of a rootless, neutralist Federal Republic loosening its moorings in the West. Allied and internal
Christian Democratic concern about Ostpolitik
obliged Brandt to emphasize his support for Euro-

27

pean integration, which in any event he genuinely

espoused.
In particular, Brandt stressed the importance
of British accession as a means of reassuring those
EC member states that feared Germany's resurgence. Brandt supported British membership in
the EC for other reasons also and pushed in the
Hague summit in December 1969 for French acceptance of enlargement. He endorsed French
president Georges Pompidou's call at the summit
for "completion" and "deepening" as weIl as enlargement but resented the other member states'
presumption that Germany would foot the bill.
The contrast in style and temperament between
Brandt and Pompidou, clearly evident at The
Hague, exacerbated the political differences between them. Pompidou especially resented
Brandt's repeated criticism of the Common Agricultural Policy, which France strongly supported.
Later, in the first year of British membership,
Brandt opposed the proposed European Regional
Development Fund, which looked too much like
an exercise in pork-barrel politics. Brandt's unwillingness to lavish money on the Community
may have angered his fellow heads of state and
government, but it won hirn solid domestic support. Secure in office, Brandt seemed set to lead
the Federal Republic weIl into the 1970s. But in
early 1974 Brandt was seriously embarrassed by
the arrest of his personal assistant on charges of
spying for East Germany. In April of that year, two
weeks after Pompidou's death, Brandt resigned
from the chancellorship.
See also GERMANY.

Breydel
The Breydel is the building in Brussels to which
the commissioners and their immediate staff
moved in 1992 while the Berlaymont, the Commission's permanent headquarters, was being
cleared of the asbestos used in its original construction.

Brlttan, Leon (1939- )

Prior to corning to Brussels, Leon Brittan, one of
the EU's most influential commissioners ever, was
a senior British Conservative politician and, between 1979 and 1986, a government minister.
Brittan left government over a policy difference
with Prime Minister Margaret Thatcher, who nev-

28

Bruges Group

ertheless rewarded bis undoubted ability and devotion to free market principles by appointing bim
the UK's senior comrnissioner in Jacques Delors's
second Comrnission (1989-1992). There Brittan
was given responsibility for competition policy. A
fierce economic liberal, Brittan was tenacioussome say overzealous-in ferreting out unfair
subsidies to industry and creating a level playing
field for manufacturers in the EC. For a variety of
political and ideological reasons Brittan had a difficult relationship with Delors, but nevertheless
served in Delors's third and final Commission
(1993-1994), this time as comrnissioner for external economic affairs. In that capacity Brittan had
repeated territorial disputes with Hans van den
Broek, the comrnissioner for external political relations. Brittan made a bid to succeed Delors as
Comrnission president, but by common consent it
was neither the UK's turn to provide the next president nor in the Comrnission's interest to have a
forceful president in the immediate aftermath of
the Treaty on European Union ratification debade. Jacques Santer, who instead succeeded Delors, dipped Brittan's wings by curtailing bis responsibilities as external economic relations
comrnissioner in the 1995-2000 Comrnission.

Bruges Group
The influential Bruges group of anti-EU members
of the British Conservative Party was formed in
December 1988 in the aftermath of Prime Minister Margaret Thatcher's famous antifederalist
speech, delivered at the College of Europe in
Bruges. In May 1991, no longer prime minister,
Thatcher agreed to become president of the
Bruges group.

Brussels
In the mid-1950s, during the intergovernmental
conference (IGC) that led to the establishment of
the European Economic Community and the European Atomic Energy Community, lean Monnet
revived bis earlier proposal to locate the institutions of the new Communities in a specially designated "European District." Monnet's proposal
again failed to win support, although Luxembourg, then horne of the European Coal and Steel
Community, refused to host additional Community institutions. Accordingly, the new Communities located instead in Brussels, where the IGC

was taking place. As in the case of the already-existing European Coal and Steel Community Assembly, however, plenary sessions of the joint assembly for the three Communities took place in
Strasbourg. Thus Brussels became the site of the
Comrnission, the Council of Ministers secretariat,
and the Economic and Social Comrnittee. Brussels
also contains offices and conference rooms for the
peripatetic European Parliament, wbich holds occasional plenary sessions there. Because of the
large number of EC institutions and other bodies
located in the city, Brussels is a popular synonym
for the EU itself.

Brussels Treaty
Formally the Treaty of Economic, Social and Cultural Collaboration and Collective Self-Defense,
the Brussels treaty was a mutual defense agreement signed in March 1948 by Britain, France,
Italy, Belgium, the Netherlands, and Luxembourg.
The treaty was aprecursor of the North Atlantic
Treaty, signed in Washington, D.C., in April 1949.
The Brussels treaty became the basis of the Western European Union (whose founding members
were the Brussels treaty's original signatories and
Germany), which was established in 1954, in the
aftermath of the failed European Defense Community initiative, to facilitate German membership in NATO.

BSE

See

BOVINE SPONGIFORM ENCEPHALOPATHY.

Budget

In Euro-speak, the budget means the budget of the

European Economic Community (now officially
the European Community) and the European
Atomic Energy Community (EURATOM). The
European Coal and Steel Community is financed
separately, by a levy on production. Strictly speaking, the EU, wbich ineIudes the three Communities plus intergovemmental cooperation on foreign
and security policy and justice and horne affairs,
has no budget, not having been designed to have
spending functions.
The legal basis of the budget is found in artieIes 199 to 209a of the Treaty of Rome and corresponding provisions of the EURATOM treaty. The
budget is a statement of foreseen revenue and the

Budget
authorization of expenditure within the limits
shown, subject to the existence of legislation establishing a policy basis for the expenditure concemed. The budget is not in itself a legal basis for
expenditure. Despite a significant growth in recent
years, this budget represents only 2.4 percent of
a11 the public sector spending of the member states
and less than 1.3 percent of the GDP of the EU.
Revenue is derived from the Community's
"own resources," that is, from funds that originate
in the member states but are the property of the
Community. They are not supplied by votes in national parliaments. Instead, decisions under Article 201 as to the level of own resources require
unanimity in the Council of Ministers, consultation (no more) of the European Parliament (EP),
and national ratification.
Own resources consist of three "traditional"
categories. The first two flow from the customs
union: import duties and levies on imports of agricultural products. The third resource is apercentage
of the value-added tax (VAT) imposed nationa11y
under Community legislation. The Community percentage is not identified in the tax paid by consumers. The percentage is reducing frorn 1.4 to 1 in
1999. The VAT base may not exceed 55 percent (for
some member states 50 percent) of gross national
product (GNP). A fourth (and relatively new) resource is a levy on the GNP of the member states,
which, under the own resource decision prevailing
up to 1999, may not exceed 1.27 percent.
The revenue side of the budget is fixed annua11y by the Council. It is not within the powers of
the EP to vary the amount of revenue that the
Council has adopted. Apart from some income
from Community activities (sales and the tax on
staff emoluments), the budget must be financed
who11y from own resources.
The budget must also be balanced. Expenditure is constrained initia11y by the estimate of revenue. Accordingly, the Commission is forma11y
required to refrain from making any spending proposal or adopting any implementing measure that
would overstep the own resources limit (Article
20la). Expenditure shown in the budget consists
of two types of appropriation: payment appropriations (self-explanatory) and comrnitment appropriations, which perrnit the Community to incur
comrnitments that mature beyond the budget year
and facilitate continuity of policy.
Appropriations are classified as "compulsory" or "noncompulsory" expenditure. This is

29

not a division between what the Community is

lega11y compe11ed to pay; rather, compulsory expenditure results necessarily from the treaty or
from acts adopted in accordance therewith. To
oversimplify: did the treaty say that the Community would spend money? If so, the expenditure is
compulsory. According to the Comrnission, "the
distinction between compulsory and non-compulsory expenditure is essentia11y political" (Commission, 1994, p. 10). Almost 70 percent of total
appropriations consists of compulsory expenditures for the Common Agricultural Policy and
other redistributive programs. What remains is not
enough to support large-scale initiatives in such
politically appealing fields as industrial policy, research and development, and so on.
The compulsory/noncompulsory split assumes significance only in the budgetary procedure. "The root of the trouble is an uneasy partnership between the Council and the Parliament,
which are joint budgetary authorities. Origina11y
the Council was the budgetary authority, but Parliament was given powers in the 1970 treaty revision, when the Community was endowed with its
own resources" (Nicoll and Salmon, 1995, p.
100). The Council has the last word on compulsory expenditure (within constraints); Parliament
has the last word on noncompulsory expenditure
(within constraints). In the interinstitutional dialogue, the pressure is on the Council to accept reclassification.
The annual budget and any supplementary
budgets are adopted in a protracted negotiation between the Council and EP. The process begins
with the Commission's presentation of a Preliminary Draft Budget. This is not in the strict sense of
the word a Commission proposal, which means
that it escapes the standing rule that the Council
can amend only by unanimity. The Council proceeds by majority vote to adopt a Draft Budget,
which it sends to the EP for a first reading (in October). The EP amends noncornpulsory expenditure and proposes modifications to compulsory
expenditure, where the biggest single category is
farm spending. The Council can modify Parliament's amendments to noncompulsory expenditure and amend, reject, or accept its modifications
to compulsory expenditure. Parliament conducts a
second reading of the Draft Budget thus amended
or modified. Although it is not provided for in the
treaty, the annual budget round concludes in December with a negotiation across the table be-

30

Budget

tween the president of the Budget Council and the

president of the EP, with the budget commissioner
in attendance. If agreement is reached, the white
smoke can metaphorically be let out, and the
process concludes with the president of the EP
signing the budget into force.
If no agreement is reached, there is no budget
for the coming year. The Community then goes
into a "fail-safe" procedure of "provisional
twelfths" of the last valid budget for month by
month expenditure, with tortuous approval mechanisms (Article 204). In either case, budget or provisional twelfths, the Commission is the executant
(Article 205).
From this it will be seen that the budget is the
focus of apower struggle between the Council and
the EP, with the latter seeking, with some success,
to strengthen its grip on spending. "The Budget
Council was also the first to negotiate directly
with the European Parliament to reach an agreement (others now do so in the co-decision procedure)" (Westlake, 1995, p. 180). The Parliament is
traditionally cast as the big spender, the Council
as the economizer. This confrontation led to a series of clashes in the 1980s, with continuous disputes, failed negotiations, and European Court of
Justice (ECJ) actions initiated by the Council. A
first interinstitutional agreement (June 1982) gave
only brief relief (De Wost and Lepoivre, 1982); a
later one (first version June 1988; current version
October 1993) has been more effective, although
not trouble free.
The interinstitutional agreement of 1988 removed from contention one of the constraints that
had set the Council and Parliament against each
other. This was the doctrine of the "maximum rate
of increase" (Article 203.9). The maximum rate
limited the growth of noncompulsory expenditure
to an amount derived from the trend of GNP and
of national budgets. It could be overridden by
agreement between the Council and Parliament,
but it became an article of religion of the Council
majority that it would not agree to such an increase. For its part Parliament regularly voted excess noncompulsory expenditure appropriations
and resented the Council majority's refusal to
countenance them. The 1988 Agreement contained a five-year expenditure schedule, split into
six main categories and showing a year-to-year
progression. Although the Council did not at first
admit that the agreed schedule effectively overrode the maximum rate mIes, it did so, and the

noisy debates were stilled. When the first schedule

expired, it was renewed without undue difficulty
to the year 2000.
Divergence between the Council and EP over
compulsory and noncompulsory expenditure neverthe1ess persisted. Running negotiations having
failed, it seemed likely that the member states
would discuss the matter in the 1996-1997 intergovemmental conference (IGC). In the event, apart
from Common Foreign and Security Policy (CFSP)
financing, budgetary issues were almost wholly absent from the IGC and the ensuing Amsterdam
Treaty. Meanwhile, when Parliament adopted the
1995 budget, it changed some classifications, but
the Council successfully took a case to the ECl
The controversial issue of Community fraud
was also raised at the IGC. All institutions are
uni ted in condemning and seeking to root out
fraud. Alarming figures are tossed about, although
by definition there is no way of knowing how
much successful fraud is perpetrated. It concems
mainly the biggest category of spending, on price
support and subsidization of farming. A handful of
Commission officials have been implicated, and
the Commission is routinely criticized for slack
management. But given that the process involves
payment by national governments or their statutory agencies to beneficiaries of Community polieies, it is reasonable to imagine that fraud may occur at that stage, beyond any control that the
Commission can exereise. Nevertheless the
British government declared that "the level of
waste, poor financial management and even outright fraud in the EU is a source of great public
concern .... We secured significant changes in the
Maastricht Treaty to enhance the powers of the
European Court of Auditors and the European
Parliament in the fight against such waste and
mismanagement (most of which occurs at the
level of the Member State rather than in the Community institutions) . . . . We are considering
whether there are further Treaty changes (to be negotiated in 1996-1997) which would be likely to
strengthen this work" (White Paper, 1996, p. 26).
According to Article 199, "all items of revenue and expenditure of the Community ... shall
be shown in the budget." Yet one item is not included-the European Deve10pment Fund, used
to finance Community aid expenditure in the
African, Caribbean, and Paeific countries that are
signatories of the Lome convention. The ostensible reason for the breach of a treaty article is that

Bundesbank

the member states are also signatories of the convention in their own right, alongside the Community, and wish to have a hold on spending. The initial allocation for the 1990--1995 period came to
ECU 10,800 million.
Another budgetary gap involves the activities
of the EU when it is exercising competences that
do not belong to the Community, notably in the
application of the CFSP. For instance, the EU incurred considerable expense administering the divided city of Mostar in the former Yugoslavia. Yet,
until the Amsterdam Treaty, there was no agreement on whether CFSP should be funded as part
of the Community budget, or by the member
states outside the budget. Accordingly, the treaty
stipulates that CFSP administrative and operational expenditures (with the exception of operations having military or defense implications),
"shall be charged to the budget of the European
Communities," and that "the budgetary procedure
laid down in the Treaty establishing the European
Community shall apply." This revision of artiele
J.ll of the Treaty on European Union (TEU) is
followed in the Amsterdam Treaty by an interinstitutional agreement among the Council, Parliament, and Comrnission on specific provisions regarding financing of the CFSP.
Conelusion of the Amsterdam Treaty came
elose to overlapping with preparations for the interinstitutional negotiation of the next multiannual
expenditure schedule, from 2000 on. This implies
a review of farm spending, of the interstate resource transfers mediated by the budget, and of
the sc ale of own resources. All take on fresh significance from the prospect of Economic and
Monetary Union at the end of the century and of
the eastward enlargement of the EU in the early
years of the next millennium, developments with
profound budgetary implications.

Bibliography
Commission. 1994. The Community Budget: The Facts
in Figures. Luxembourg: Office for Official Publications of tbe European Communities.
De Wost, J.-L., and M. Lepoivre. 1982. "La declaration
commune du parlement europeen, du conseil et de la
comrnission relative a differentes mesures visant a
assurer un meilleur deroulement de la procedure
budgetaire, signee le 30 juin 1982." Revue du
rrwrchi commun, no. 261 (November).
Nicoll, William, and Trevor Salmon. 1995. Understanding the New European Community. Rev. ed. London:
Harvester Wheatsheaf.

31

Westlake, Martin. 1995. The Council 0/ the European

Union. London: Carterrnill Publishing.
White Paper. 1996. A Partnership 0/ Nations. London:
Her Majesty's Stationery Office.

-Sir William Nicoll

Bulgarla
Like its neighbors in Central and Eastern Europe,
Bulgaria aspired to EC membership after the revolution in 1989 and eventually submitted an application to the European Council in Madrid on December 15, 1995. In the meantime, Bulgaria and
the EU signed a Europe Agreement on December
19, 1994, which entered into force on February 1,
1995. Despite these milestones on the road to full
membership, however, Bulgaria is making slow
progress. Political uncertainty, economic underdevelopment, and monetary instability make Bulgaria an unlikely candidate for EU accession in
the near future, as the Comrnission acknowledged
in its July 1997 opinion on Bulgaria's application.
See also CENTRAL AND EASTERN EUROPEAN
STATES; TABLE 6.

Bundesbank
Germany's Bundesbank (Central Bank) is a powerful, independent institution whose influence extends throughout the EU. Because of the weight of
Germany's economy, and the strength of Germany's currency (the mark) under the Exchange
Rate Mechanism of the European Monetary System, the Bundesbank effectively controls European
monetary policy. Moreover, the Bundesbank's obsession with price stability (the Bundesbank is
constitutionally obliged to fight inflation above all
else) had a deflationary effect on other European
economies, causing sluggish growth and rising unemployment. This prompted French prime minister Edouard Balladur, in 1987, to advocate Economic and Monetary Union (EMU): the
establishment of a European Central Bank (ECB)
would both curb the Bundesbank's power and restore some French influence over European monetary policy. The Bundesbank responded unenthusiastically, arguing that a European-leve1 monetary
policy would underrnine price stability in Germany. This struck a chord with an increasingly
skeptical German public. Undoubtedly, Bundesbank pressure stiffened the German govemment's
negotiating position during the 1991 intergovern-

32

Bureau

mental conference on EMU and accounted for the

relatively strict convergence criteria written into
the Treaty on European Union. Also in deference
to the Bundesbank's domestic popularity and political c1out, the member states agreed in October
1993, after a lengthy dispute, to locate the new European Monetary Institute and the future ECB in
Frankfurt, the Bundesbank's horne town.
See also ECONOMIC AND MONETARY UNION.

Bureau
The bureau, or executive committee, is a key element of the interna! organization of a party group
in the European Parliament. Composed of achair,
vice-chair, treasurer, and maybe others, the bureau
deals with both political and administrative matters.
See also PARTY GROUPS IN THE EUROPEAN
PARLIAMENT.

c
Cablnet
A cabinet is a commissioner's private office. Cabinets coordinate the commissioners' work vis-a-vis
the other commissioners, the directorate-general or
directorates-general under the commissioner's responsibility, and interest groups and the media in
the commissioner's horne country. Cabinets vary
in size, but average seven or eight people, most of
whom are "political appointees" from the commissioners' horne countries. Some of them return to
their horne countries after their stint in the cabinet;
others try to "parachute" into the permanent Commission civil service. Cabinets generally, and chef
de cabinets (directors) in particular, tend be highly
influential, often to the detriment of their relations
with other units and senior officials in the Commission.
See COMMISSION.

CAG

See

COMPETITIVENESS ADVISORY GROUP.

Canada
The Canada-EU link is in a category all by itself.
Canada's share of EU trade is fairly steady and
small: between 1989 and 1994 it hovered at
around 1.8 percent. From a trade vantage, Canada
does not command a lot of attention in Brussels.
The EU is Canada's second-largest trading partner
but only at around 8 percent compared to a U.S.
share of over 70 percent. To be sure, total figures
are over $20 billion in two-way trade and direct
investment levels are relatively much higher:
twenty-two percent of investment in Canada
comes from the EU, and 19 percent of Canadian

investment is in the EU. In both cases, the UK occupies a large share of the flow.
Canada does not easily fit into the EU's traditional external relations: it is not one of the excolonial African, Caribbean, and Pacific countries;
it is not a prospective member or association partner; and it is not a great trading power such as the
United States or Japan. Yet Canada was the first
advanced industrial country to sign a broad economic cooperation agreement with the EC in 1976
(the Framework Agreement for Commercial and
Economic Cooperation), which sought to promote
trade, industrial, and scientific cooperation.
Canada and the EU have built up a sophisticated
and institutionalized consultative mechanism
complete with embassies, parliamentary meetings,
a Joint Cooperation Committee, ministerial meetings, and various working groups. The 1990
Canada-EU Transatlantic Declaration added regular heads of government, Commission president,
and foreign ministers' meetings in the rhythm of
the Council presidency.
Why does the EU entertain a considerable
political relationship with a small economic partner? Part of the answer lies in history, part in the
security link. But equally important, part of it lies
in how both Canada and the EU relate to the
United States. Historical, demographic, democratic, and cultural ties are deep. Canada's two
founding nations have their roots in Europe and
maintain a political profile in the Commonwealth
and La Francophonie. Canada's role in both world
wars and in NATO provided it with full political
standing in European security throughout the Cold
War. lf goodwill is ever a factor in international
politics, Canada had some of it at least with many
European publies. How to translate all that into
substance is another thing, however.
In the 1940s Canada's reliance shifted from
the UK to the Uni ted States. Canada opposed
Britain's entry into the EC, as Canada stood to
lose its Commonwealth preferential status. As late
as 1971, Canadian trade with the UK equaled its
trade with the EC Six. In vain, Canada had tried to
use Article 2 of the North Atlantic treaty to add a
political and economic dimension to the Atlantic
Alliance. With British entry into the Community
and Canada's frozen relations with France after
President Charles De Gaulle's obtrusive support
for Quebec independence in 1967, Canada stood
quite squarely in the U.S. orbit. The independentminded Liberal regime under Prime Minister

33

34

Canada

Pierre Trudeau was concerned about American

penetration of Canada's economy and, indeed, society. The so-called Nixon economic shocks of
1971 tumed such concern into a sense of vulnerability. Canada's persistent move in the early 1970s
to build relations with the EC, known among
Canadian foreign policy analysts as the "Third
Option," must be understood as areaction against
those developments (Boardman, 1979).
Accordingly, Canada sought an EC link to
counterbalance U.S. influence. A bit deceptively,
Canada offered access to raw materials as a carrot
(in fact, at the time Canada was not willing to ease
the terms of access to its resources). Even declining levels of Canadian troops in Germany were
slightly boosted to show Canada's commitrnent to
the EC. Eventually the Commission saw its own
interests in the deal-greater competence in external relations-and managed passage of the 1976
Framework Agreement with the more hesitant
member states (Pentland, 1977, p. 219).
Most analysts agree that the Third Option fell
short of its ambition (Cooper, 1994). How does
one boost a trade relationship when both partners
are focusing their attention elsewhere? A Canadian historian put his finger on it: "The third option, so sensible, so necessary, so obvious, is an
attempt to secure the triumph of politics over geography" (Bothwell, 1977, p. 35). Today we might
write: "to secure the triumph of politics over commerce."
Canada-EC relations in the late 1970s and
1980s drifted with slowly declining percentiles in
trade while Canada's commerce with the United
States rose. It was not just Ottawa that did not know
how to put economic meat on a political skeleton;
the Community also did not have a coherent policy
vis-a-vis Canada. Meanwhile, various disputes over
fur, fisheries, wine, and pinewood nematodes tested
the relationship sorely at times.
The late 1980s and early 1990s brought more
change than at first appreciated. The Canada-U.S.
Free Trade Agreement and then the North American Free Trade Agreement (NAFTA) made
Canada an investment bridgehead or springboard
for EC member states (Brinkhorst, 1995, p. 15).
"EC 1992" captured Canada's attention, and Ottawa renewed efforts to help Canadian businesses
to exploit the single market (Pitts, 1990). Trade in
finished products and services between Canada
and the EU is slowly rising. Of course bilateral irritants remain, as was spectacularly manifested by

the Canada-EU fisheries war in 1995. Moreover,

the security and defense relationship is historically at its weakest point. But no one on either
side of the Atlantic appears very worried about
this. Canada encourages a stronger European foreign policy and security identity and wants to explore cooperation with the EU on practical issues
such as immigration.
Canada's realpolitik is rooted in multilateralism. As a small power, Canada gains most by tying
larger powers or blocs to a system of global rules,
hence Canada's consistent policy of building up
the World Trade Organization (WTO) and the UN.
As long as relations with the EU remain within this
framework or even move toward some form of Atlantic free trade arrangement, Canada will pursue
them. At the same time, Canadian businesses cannot be expected to pursue a political agenda. On
their list of priorities, Europe comes after the
United States and the rest of the Americas and then
competes with the Asia-Pacific region.
Meanwhile, the Canadian govemment's dayto-day concern is not to fall between the cracks of
great power politics. Experience teaches that in
the U.S.-EU dialogue, Canada can easily become
an afterthought. Persistent diplomacy was needed
to get the Framework Agreement and the Transatlantic Declaration. Ottawa is justified in exerting
more political energy on its link with the EU than
the trade figures alone would warrant, as long as
no one is under the illusion that it will lead to an
actual counterweight to Canada-U.S. relations. At
times, Canada's interests will be on the U.S. or the
European side. Above all, however, Canada will
try to keep maneuvering space between its two
chief trading partners.
Bibliography
Boardman, Robert. 1979. "Initiatives and Outcomes:
The European Community and Canada's Third Option." Journal of European Integration 3, no. 1, pp.
5-28.
Bothwell, Robert. 1977. "The Third Option." In Norman
Hillmer and Garth Stevenson, A Foremost Nation:
Canadian Foreign Policy and aChanging World.
Toronto: Mc1elland and Stewart.
Brinkhorst, Laurens Jan. 1995. "EU-Canada: An Enduring Link." In Roy B. Christensen, ed., Canada and
the European Union: A Relationship in Focus. Ottawa: Delegation of the European Commission in
Canada.
Cooper, Andrew F. 1994. "Canada-EC Relations in
Comparative Perspective: Promise, Problems, and
Prospects." In Gretchen M. MacMillan, ed., The Eu-

Cecchini Report
ropean Community, Canada, and 1992. Calgary:
University of Calgary Press.
Pentland, Charles. 1977. "Linkage Politics: Canada's
Contract and the Development of the European
Community's Extemal Relations." International
JournaI32,no. 2, pp. 207-231.
Pitts, Gordon. 1990. Storming the Fortress: How Canadian Business Can Conquer Europe in 1992.
Toronto: HarperCollins.

-Alexander Moens

CAP
See

COMMON AGRICULTURAL POLICY.

Carbon Dioxide (C02 ) Tax

In 1992 the COInmission proposed a highly controversial carbon dioxide (C0 2) tax aimed at reducing
pollution and consumption of nonrenewable energy
sources in the EC. The Commission's motives were
mixed: Denmark and the Netherlands had introduced such taxes at the national level, an action that
the Commis si on feared could distort the single
market; the Commission wanted the EC to be seen
to be taking a major initiative before the Rio earth
summit later that year; and the Commission was
acting as a "policy entrepreneur" both to promote
environmental policy and to acquire more political
and bureaucratic influence. The proposal was controversial not only because some member states resented the attempted expansion of Commission influence, but especially because taxation is an area
jealously guarded by most national governments.
The Cornrnission dropped the proposal in December 1994, partly because of strong opposition from
a number of member states and industry groups and
partly because of lack of support from the EU's
main competitors, notably the United States and
Japan. Nevertheless a possible CO2 tax remains on
the EU's policy agenda.
See also ENERGY POLICY; ENVIRONMENTAL
POLICY.

Cassis de DIJon Case

Cassis de Dijon is the popular name for a landmark European Court of Justice (ECJ) decision
that facilitated completion of the single market. In
February 1979 the ECJ struck down a German
prohibition on imports of Cassis de Dijon, a
French liqueur. Germany had based its ban on a

35

law that prohibited the sale of imported drinks that

did not meet minimum alcoholic content requirements. But the court held that Germany could not
discrirninate against products from other member
states that met basic health and safety standards
set in those states.
In the Cassis case the ECJ determined that
the German ban was disproportionate because information on the label as to alcoholic content was
sufficient to protect the innocent consumer. By
reading into the treaty a requirement for the mutual recognition of national health, safety, and
technical standards, the ECJ prompted a fundamental change in the EC's harmonization policy:
based on the court's decision, the Commission developed the principle of mutual recognition, thus
avoiding the otherwise impossible process of harmonizing in detail the member states' diverse
product standards. This was a key element of the
Commission's successful strategy for completing
the single market program.
See also EUROPEAN COURT OF JUSTICE; REGULATORY POLICY.

CCP
See COMMON COMMERCIAL POLICY.

CEAC
See

CONFERENCE OF EUROPEAN AFFAIRS COMMIT-

TEES.

Cecchlnl Report
In 1986 and 1987 Paolo Cecchini, an Italian econo-

mist, led a group of researchers in a huge, Cornrnission-funded project on the "costs of non-Europe."
The purpose of the project was to quantify the cost
to the EC of maintaining a fragmented market.
Based on data from the four largest member states,
Cecchini's team of independent consultants assessed the costs and benefits of maintaining the status quo by analyzing the impact of market barriers
and by comparing the EC and U.S. markets. Cecchini looked at three things: the financial costs to
firms of the administrative procedures and of the
delays associated with compliance with customs
formalities, the opportunity costs of lost trade, and
the costs to national governments of customs controls. In early 1988 Cecchini's team produced its
findings in a massive sixteen-volume publication,

36

CEDEFOP

popularly called the Cecchini report. The gist of the

report was that existing physical, technical, and fiscal barriers to trade cost the Community 3 to 6 percent of GDP annually. Also in 1988 Cecchini published a one-volume book version ofhis report, The
European Challenge: 1992. Although it~ methodology was criticized and its conclusions were sub sequently shown to have been exaggerated, the Cecchini report was highly influential at the time of its
publication and helped to build momentum behind
the single market program.

CEDEFOP
See EUROPEAN CENTER FOR THE DEVELOPMENT OF
VOCATIONAL TRAINING.

CEES
See CENTRAL AND EASTERN EUROPEAN STATES.

CEI
See CENTRAL EUROPEAN INiTIATIVE.

CE Mark
The CE mark, applied to products manufactured
in the EU, is intended primarily for customs and
regulatory authorities to show that the product
complies with all applicable standards directives.
It should not be confused with quality marks, such
as those awarded by other national bodies. Depending on the relevant directive, the CE mark can
be applied by the manufacturer or by the laboratory or other institution certifying the product. By
improving the process of product certification, the
introduction of the CE mark in the late 1980s underrnined technical barriers to trade and facilitated
implementation of the single market program.
See also REGULATORY POLICY; SINGLE MARKET PROGRAM; STANDARDS AND CONFORMITY AsSESSMENT.

CEN
See EUROPEAN STANDARDS COMMITTEE.

CENELEC
See EUROPEAN ELECTROTECHNICAL STANDARDS
COMMITTEE.

Central Amerlcan Common

Market
See LATIN AMERICA; SAN lOSE DIALOGUE.

Central and Eastern European

States (CEES)
The development of relations between the Central
and Eastern European states (CEES) and the EC
was constrained during the Cold War by political,
economic, and ideological factors. The Soviet
Union opposed the formation of an integrated
Western Europe and declined to establish relations
with the EC or to recognize its supranational competence for international trade. With the exception
of Romania, the CEES that were members of the
Council for Mutual Economic Assistance
(CMEA) for the most part followed the Soviet
line. On the Western side, the Community was
wary of agreements that would have strengthened
Soviet leverage over the CEES and for that reason
turned aside Eastern-bloc proposals, made since
the 1970s, for a CMEA-EC umbrella accord.
This situation began to change in the 1980s
as the Soviet Union adopted a more flexible policy
toward the EC and as the CEES gained greater
freedom to pursue their national interests. In lune
1988 the EC and CMEA concluded a joint dec1aration establishing diplomatic relations. In the
same month Hungary concluded a ten-year trade
and co operation agreement (TCA) with the EC.
Similar agreements were concluded with Poland
in 1989, Bulgaria and Czechoslovakia in 1990,
and Romania in early 1991.
These first-generation agreements soon were
overtaken by the rapid pace of change in the region. At the luly 1989 Paris summit, the G7
agreed to launch a program of assistance for Hungary and Poland to support the economic and political reforms underway there. The European
Commission was asked to coordinate aid from the
G24 (the group oftwenty-four most industrialized
western countries )-a significant upgrading of the
Community's role in East-West affairs. Later in
1989 the Council of Ministers approved the
launching of Pologne et Hongrie: Actions pour la
Reconversion Economique (PHARE), a Community-funded program of technical assistance to encourage the development of private enterprise and
the building of market-oriented economies.
With the fall of the Berlin Wall in November
1989 and the revolutions in other CEES, the Com-

Central and Eastern European States (CEES)

munity was faced with the more demanding task

of helping to stabilize the postcommunist order in
the entire region. By July 1990 PHARE was extended to Bulgaria, Czechoslovakia, Yugoslavia,
and East Germany (before its absorption by the
Federal Republic in Gctober of that year). Romania and the three Baltic states were added in 1991
and 1992. The Community also played a major
role in the founding of the European Bank for Reconstruction and Development, which opened in
April 1991 for the purpose of supporting projects
in the region with loans and technical assistance.
In December 1991 the Community concluded
the first Europe Agreements with Po land, Hungary, and Czechoslovakia. (The agreement with
Czechoslovakia never went into effect owing to
the breakup of that country, but agreements with
Slovakia and the Czech Republic were concluded
in Gctober 1993.) These agreements, named to
convey the special quality of relations between the
EU and the CEES, superseded the TCAs that had
been concluded with states that were still essentially communist. The new agreements included
provisions for foreign policy coordination and cultural exchange as weIl as economic cooperation
and were a partial response to the expressed desire
of the CEES to join the EU. The agreements did
not contain explicit comrnitments to EU membership, but the aspiration to accede was noted in the
treaty preambles and implicitly governed their operative provisions. Europe Agreements later were
conc1uded with Romania (February 1993), Bulgaria (March 1993), the Baltic states (June 1995),
and Slovenia (June 1996).
The Europe Agreements were negotiated under Article 238 of the Treaty of Rome, which
gives the Community the right to establish with
nonmember states "association involving reciprocal rights and obligations, common action and
special procedure." As mixed agreements covering
areas of both Community and national competence, they were signed by the EC and its member
states and required the approval of the European
Parliament (EP), member states' parliaments, and
the parliament of the associated country before
entering into force. In order to facilitate trade and
investment during the ratification process, the
Comrnission concluded interim agreements covering trade liberalization and other areas reserved
for Community competence. Interim agreements-comprising essentially the trade provisions of the Europe Agreements-for Czechoslo-

37

vakia, Hungary, and Poland went into effect in

March 1992.
The Europe Agreements provide for the establishment of bilateral free trade areas within a
ten-year period comprised of two five-year stages.
With the exception of textiles and clothing and of
European Coal and Steel Community (ECSC)
products, all quantitative restrictions on the import
of industrial goods to the EU were eliminated
from the date of entry into force of the interim
agreements. Market access for agricultural products was enhanced, although quotas remained in
place. Tariffs were lowered on both sides, but with
the EU required to reduce more quickly than the
CEES.
Although the agreements represented a major
step toward full trade liberalization, they came under criticism from various quarters for the degree
of protection they retained. Restrictions on textiles, steel, and agricultural goods affected precisely those goods that the CEES were best positioned to export. The agreements also contain
sweeping antidumping and safeguard clauses that
some observers feared might deter foreign direct
investment. In response to these and other concerns, the EU subsequently undertook unilateral
steps to speed the liberalization process. In any
case, trade between the EU and the CEES rapidly
expanded on both the import and the export sides,
as the latter redirected their trade from the CMEA
(which was dissolved in early 1991) to the Western European and global market.
In nontrade areas, the agreements call for the
progressive approximation of legislation in the
CEES to EU norms and adoption of EU competition rules. They also deal with the movement of
workers, trade in services, and rights of establishment. Their liberalizing effect in these sensitive
areas is rather modest, and their main contribution
is to improve the lot of workers from the CEES already in EU countries rather than to facilitate new
flows of people. The Europe Agreements also provide for expanded political dialogue and cultural
cooperation, set up bilateral association councils
to monitor the implementation of the agreements,
and provide for financial cooperation in the form
of grant aid under PHARE and access to credit
from the European Investment Bank.
Despite progress made with the Europe
Agreements, the issue of EU membership for the
CEES remained controversial in the EU itself and
was widely debated in the early 1990s. Federalists

38

Central and Eastern European States (CEES)

worried that widening to a large group of relatively backward countries with different cultures
and political traditions could slow the development of the EU into a deeper union with stronger
institutions and a single currency. There were also
concerns about costs, in particular those involved
in extending the EU's Common Agricultural Policy (CAP) and cohesion policy to the east. On the
other side, proponents of enlargement stressed the
imperative of stabilizing democracy in the CEES,
as weIl as the potential economic advantages of
bringing another one hundred million or more
consumers into the EU.
This debate was more or less resolved at the
lune 1993 Copenhagen meeting of the European
Council, at which the EU member states formally
declared enlargement to be an explicit goal of the
EU. Although they did not set a timetable, the
heads of state and government agreed that accession would "take place as soon as an associated
country is able to assume the obligations of membership by satisfying the economic and political
conditions required" (Commission, 1995a). Associated countries were defined as those countries
with which the EU had concluded or planned to
conclude Europe Agreements. This meant that the
Baltic states were regarded as candidates for eventual membership, whereas Russia, Ukraine, and
the other countries of the former USSR were not.
Four conditions for membership were specified: (1) stability of institutions guaranteeing
democracy, the rule of law, human rights, and respect for and protection of minorities; (2) the existence of a functioning market economy; (3) capacity to cope with competitive pressures and market
forces within the EU; and (4) the ability to take on
the obligations of membership, including adherence to the aims of political, economic and monetary union. The last condition implies full acceptance of the acquis communautaire, including
participation in all three of the pillars established
by the Treaty on European Union (TEU).
In addition, the European Council stipulated
that "the Union's capacity to absorb new members, while maintaining the momentum of European integration, is also an important consideration in the general interest of both the Union and
the candidate countries." This condition later was
interpreted to mean that following the admission
of Austria, Finland, and Sweden in lanuary 1995,
negotiations regarding the admission of additional
candidates (beginning with Cyprus and Malta, fol-

lowed shortly by the CEES) would not begin until

at least six months after the completion of the
1996-1997 intergovemmental conference (IOC),
which would take up the issue of EU institutional
reform.
Although the European Council took the decision in principle to enlarge at Copenhagen,
throughout 1993 and 1994 there was little real
momentum behind the enlargement effort, given
the delays in putting into effect the Europe Agreements, the unexpectedly difficult TEU ratification
process, and the task of finalizing the accession
agreements with Austria, Finland, and Sweden.
The stage was set for real progress at the lune
1994 Corfu summit, at which the European Council invited the Commission "to make specific proposals as soon as possible for the further implementation of the Europe Agreements and the
decisions taken by the European Council in
Copenhagen" (Commission, 1995a).
On the basis of this request, the Commission
produced several documents that became the basis
for the preaccession strategy adopted by the European Council at Essen in December 1994. The
most noteworthy innovation at Essen was the establishment of the Structured Dialogue. Unlike the
association councils, which bring each associated
state together with the Council in a one-plus-fifteen member state format, the Structured Dialogue
involves all of the CEES and all of the EU member states and has been implemented through a
program of meetings of environment, transport,
justice, foreign, and other ministers as weIl as annual meetings of heads of state and government on
the margins of a European Council meeting.
The Essen summit singled out two issues that
were expected to be especially difficult and that
had the potential to break the admission of CEES:
the internal market and agriculture. The European
Council instructed the Commission to prepare, by
the end of the first half of 1995, a white paper on
the internal market and, by the end of 1995, a paper on agriculture policy as it related to enlargement.
The internal market white paper (Commission, 1995c) was based on the assumption that
joining the EU entails a process of integration far
deeper and more intrusive than that necessitated
by other kinds of free trade arrangements and emphasized the demands that participation in the single market places on the member states. To operate the internal market, a member state must

Central and Eastern European States (CEES)

adhere to the principles in the EC treaty and to a

large body of secondary legislation, most of which
takes the form of directives that must be transposed into nationallaw. Because the single market
relies heavily on the principle of mutual recognition, joining the EU also requires the establishment of adequate standards and effective regulatory and inspection bodies in the acceding
countries.
The voluminous white paper outlines the relevant legislation and conditions necessary to operate the legislation in twenty-three industrial sectors and areas of regulation and thus is intended to
serve as a kind of handbook for the CEES seeking
to join the internal market. Following the guidance
provided in the white paper and drawing upon legal and technical assistance provided by the EU,
the prospective member countries have set about
aligning domestic legislation with EU norms.
The costs of extending the CAP to new member states with large and relatively poor farrning
sectors has been widely debated, with some academic experts estimating the incremental burdens
in the tens of billions of ecu. In a paper delivered
to the European Council in late 1995, the Commission was more optimistic and concluded that
the costs of bringing the CEES into the CAP will
be manageable, provided the EU continues with
the 1992 MacSharry reforms designed to bring
down the costs of the CAP as a whole (Commission, 1995b).
The other area of concern has been the structural funds. Recipients of these funds, mainly in
the Mediterranean member states and Ireland, are
concerned that assistance to them will be cut as resources are diverted eastward, whereas net payers
to the EU budget fear new tax and budgetary burdens. Resolving this issue will take political compromise among the member states and the candidate countries, but it would appear that for
budgetary reasons the CEES will not receive the
same level of support from the cohesion funds as
has been provided to Ireland and the Mediterranean countries.
Cooperation in the Common Foreign and Security Policy (CFSP) is weH advanced, and the
CEES increasingly coordinate positions with the
EU in the UN and other international forums. As
the EU's emerging defense arm, the Western European Union (WEU) has accorded "associate
partner" status to the CEES, which allows them to
participate in nearly all meetings of the WEU and

39

in WEU missions. Another EU initiative, undertaken as a joint action under CFSP, was the European Stability Pact (Balladur Pact), originally proposed by France but subsequently endorsed by the
EU. The pact aims to enhance stability in the
CEES by encouragement of good neighborly relations, settlement of questions relating to borders
and ethnic minorities, and promotion of democratic institutions on a regional basis. The pact was
concluded at a meeting in March 1995 of the Organization for Security and Cooperation in Europe, which was also entrusted with the pact's implementation.
Despite the formidable challenges that must
be overcome, the CEES are pressing ahead with
their applications to join the Union, and several
countries could become full members in the
2002-2004 time frame. Under the procedures outlined in Article 0 of the TEU, prospective members must apply to the Council of Ministers, which
can act upon a membership application after receiving the Comrnission's opinion regarding the
candidate country's suitability for membership.
The Commission delivered its opinions in July
1997, shortly after the conclusion of the IGC in
Amsterdam. Based on its own assessment and detailed information received from the applicants,
the Comrnission recommended that accession negotiations begin with five CEE countries-the
Czech Republic, Estonia, Hungary, Poland, and
Slovenia-as weIl as with Cyprus.
In December 1997 the Council of Ministers
unanimously endorsed these recommendations,
clearing the way for the start of accession negotiations in early 1998. The Council also established a
reinforced pre-accession strategy to accelerate the
preparations of all ten CEE countries for eventual
membership and an ongoing European conference
that would include the five countries not scheduled to begin negotiations. Their progress would
be reviewed annually to determine when accession negotiations could begin. The EU, represented by the EU presidency country but with assistance from the Comrnission, will conduct the
negotiations, with the objective of concluding individual treaties of accession. These accession
treaties then will have to be approved by the European Parliament by an absolute majority, by the
Council unanimously, and ratified by all of the
member states and the acceding country.
The negotiation process is expected to take
several years, given the number of countries and

40

Central European Initiative (CEI)

the complexity of the issues involved. Acceding

states may be granted certain derogations and long
transition periods for some areas of integration. In
addition, the EU itself will be under pressure to
continue the reform of both its institutions and its
policies, in order to be able to function effectively
as a union of twenty or more members.
There may weIl be long delays between the
admission of the five most advanced candidate
countries identified in Agenda 2000 and those
whose economic and political performance is lagging. The Europe Agreements thus will remain in
effect for countries not yet admitted. There can be
little doubt, however, that the political revolutions
of 1989 through 1991 and the EU's subsequent
decision to we1come the CEES as members will
transform the EU in ways that even now are difficult to foresee.
See also TABLE 6.
Bibliography
Cornrnission. 1995a. The European Councils: Conclusions of the Presidency, 1992-1994. Luxernbourg:
Office for Official Publications of the European
Communities.
- - . 1995b. "Study on Alternative Structures for the
Developrnent of Relations in the Field of Agriculture
Between the EU and the Associated Countries with a
View to Future Accession of these Countries."
Ip/95/1314. Brusse1s: Cornrnission.
- - . 1995c. White Paper: Preparation oftheAssociated Countries of Central and Eastem Europe for
Integration into the Intemal Market of the Union.
COM(95) 163. Luxernbourg: Office for Official
Publications of the European Communities.
--.1997. Agenda 2000. COM(97)2000 final. Luxernbourg: Office for Official Publications of the European Communities.

of stability in Central Europe and clarifying the

CEI's links with the EU.

CET

See

COMMON EXTERNAL TARIFF.

CFP

See

COMMON FrsHERIEs POLICY.

CFSP
See COMMON FOREIGN AND SECURITY POLICY.

Charter 01 Fundamental Sodal

Rights lor Workers

See

SOCIAL CHARTER.

Charter 01 Paris lor a

New Europe
Signed in Paris in November 1990 by the member
states of the Conference on Security and Cooperation in Europe (CSCE), the Charter of Paris for a
New Europe recognized the CSCE's centrality in
the security architecture of post-Cold War Europe, especially with regard to such potentially
contentious issues as the integrity of national borders, self-determination, minority rights, pluralism, human rights, environmental protection, and
the fight against organized crime and terrorism.
Because the Charter of Paris harks back to the
CSCE's Helsinki Final Act, it is also called
Helsinki 11.

-lohn Van Oudenaren

China
Central European
Initiative (CEI)
The Central European Initiative (CEI) is a grouping of Central European states-Austria and Italy
(two EU member states), Albania, Belarus,
Bosnia, Bulgaria, Croatia, the Czech Republic,
Hungary, Macedonia, Poland, Romania, Slovakia,
Slovenia, and Ukraine-to promote economic cooperation and political rapprochement in the region. In December 1996, the European Council
(meeting in Dublin) we1comed a Commission report encouraging regional cooperation as a factor

China and the EC established diplomatic relations

in 1975. Ten years later they signed a trade and
economic cooperation agreement, which remains
the basis for EU-China commercial dealings. A
trade-specific Joint Committee meets annually at
ministeriaUcommissioner level, buttressed by
groups of experts and working parties in various
sectoral and policy areas. This was supplemented
in 1994 with a "structured political dialogue" involving regular meetings of foreign ministers.
As a key component of its new strategy toward Asia, in 1995 the EU developed a "comprehensive, independent, and consistent long-term

China

strategy" for relations with China, an emerging

economic and political powerhouse. By that time
China had become the EU's fourth largest export
market and fourth largest supplier. Eager to maximize trade and investment opportunities for Europeans in China, and eager also to raise the fledgling EU's international political profile, Brussels
intensified its "constructive engagement" with
Beijing. The inaugural Euro-Asian meeting of
March 1 and 2, 1996, which brought together for
the first time the heads of state or government of
the EU member states (plus the Commission president), China, Japan, and Korea, and the ASEAN
countries, demonstrated the EU's and China's interest in each other and in broader Asian affairs.
Despite the progressive strengthening and
deepening of contacts during the past two decades,
EU-China relations have always been touchy. Negotiations to reduce quotas and other barriers to
trade have been difficult and prolonged. Although
the EC was one of the earliest major trading partners to grant China fully unconditional mostfavored-nation status (nondiscriminatory tariff access for China's goods and services), the EU
resents what it sees as continuing barriers to European exports. Disputes abound, involving frequent
use by the EU of antidumping measures. China's
disregard for intellectual property rights was a major irritant in EU-China relations. Although China
now has intellectual property laws in place (thanks
largely to U.S. pressure) problems of enforcement
remain. A long-standing dispute over maritime
transport was finally resolved to the EU's satisfaction and, as the EU likes to point out, to the benefit
of China's other trading partners as weIl.
Although not specifically an EC-China issue,
China's bid to join the World Trade Organization
(WTO), and before that the GATT, is another irritant in bilateral relations. China craves WTO
membership for symbolic reasons as weIl as for
the obvious benefits in terms of market access.
Given China's prominence in the global trading
system, China's exc1usion from the WTO seems
anomalous. However, well-documented Chinese
import barriers, as weIl as the opague nature of its
import procedures and policies, make it difficult
for the EU to agree to admit China without commitments to greater openness. EU policymakers
have little confidence that China could or would
abide by WTO rules.
The United States is of the same opinion but
casts its position in an ideological as weil as a

41

pragmatic light. An ideological edge also differentiates the EU and U.S. positions on human rights
in China. The EU and, especially, the European
Parliament are not averse to criticizing China's
human rights record. But the EU has few moral
scruples about dealing with China economically.
Indeed, the EU showed little solidarity in 1997
when China retaliated against member states that
had dared to take China to task for its human
rights record. This incident demonstrates China's
ability to divide the EU politically, despite the
EU's hopes that constructive engagement with
China would help develop the Common Foreign
and Security Policy (CFSP). Similarly, human
rights and other issues show China's ability to divide the EU and United States in their dealings
with China, to the detriment not only of Western
influence on China, but also of transatlantic relations. Different security interests further divide the
EU and Uni ted States in their policies toward
China. The United States is engaged militarily in
Asia; the EU lacks a coherent CFSP. Under the
circumstances, the EU can afford to be more ingratiating in its relations with Beijing.
The EU had a special interest in the transition
of Hong Kong to Chinese rule in June 1997. Apart
from Hong Kong being a former British colony,
many EU companies use what is now the Special
Administrative Region (SAR) of Hong Kong as a
launching pad for investment in China. The SAR
willlikely remain a key partner for the EU in Asia,
playing an important role in the EU's relations
with China. Similarly, the EU looks forward to the
smooth transfer of sovereignty for Macao, a Portuguese colony, to China.
As weil as global strategic and economic elements, the EU's interest in China encompasses humanitarian and environmental concerns. Thus, the
EU wants to help China feed its burgeoning population, make better use of its natural resources, reduce environmental damage (due especially to
China's huge coal consumption), and alleviate
rural poverty. The EU promotes these objectives
through direct financial and technical assistance,
support for nongovemmental organizations working in China, and humanitarian aid through the
European Community Humanitarian Office
(ECHO).
Overall, the EU's official policy toward China
is quite ambitious. Apart from commercial, environmental, and humanitarian concerns, the EU
seeks to promote regional stability and global pros-

42

Christian-Democratic Group

perity by achieving "smooth and gradual integration of China into the world economy." The Commission and member states are trying to achieve
greater coordination of EU activities and national
policies relating to China and a higher EU profile
in China and throughout Asia. However, China's
unpredictability, prickliness, and opacity may
make these objectives difficult to attain.

Chrlstlan-Democratlc Group

See EUROPEAN PEOPLE'S

PARTY.

Churchlll, Wlnston (1874-1965)

Winston Churchill, the great British statesman,
played a prominent part in the post-World War II
European movement. Churchill's most famous
contribution to European integration was undoubtedly his Zurich speech in September 1946, in
which he called for a United States of Europe.
Given Churchill's stature as Britain's wartime
leader, his rousing speech in favor of closer integration had a major impact on European public
and political opinion. But Churchill never envisioned British participation in this putative United
States of Europe. In view of the cultural, political,
and historical differences between Britain and its
continental neighbors, Churchill thought that
Britain should remain aloof from a future European supranational organization and instead act as
a transatlantic bridge between the continent and
the Uni ted States. From this position arose
Churchill's opposition at the Hague Congress in
1948 to continental European efforts to craft a
Council of Europe with an assembly that would
draft a constitution for the United States of Europe. Had the Council of Europe emerged in that
form, Britain would not have participated in it.
Churchill's support for continental European integration and his determination to preserve British
sovereignty and independence shaped British attitudes toward the EC in the decades ahead.

CIS
See COMMONWEALTH OF INDEPENDENT STATES.

Cltlzenshlp
European citizenship formally came into heing in
Article 8 of the Treaty on European Union (TEU),

which entered into force in November 1993.

Though some transnational political rights were
not introduced until then, elements of common
citizenship already existed in the EC's regulation
of legal and social rights and in policy concems
about "access" and "belonging." There are conflicting views about whether or not rights are significant in principle or practice and about the
prospects for European citizenship. Basic information about rights precedes the discussion of
those conflicting views.
The goal of freedom of movement (Article
118 of the Treaty of Rome) is the foundation for
some equivalents of traditional civil rights, since
elucidated in the jurisprudence of the Court of
Justice (ECJ): for example, those relating to residence, the administration of justice, and ownership of immovable property (for economically active migrants within the Community). Almost
from the outset, the ECJ established that the
Treaty of Rome gave a common legal right to individual nationals, migrant or not. This was their
right to expect, and duty to ensure, that states, including their own, complied with Community law
(this principle was established in the van Gend en
Loos case).
European social rights are not directly redistributive. Rather, the Community regulates entitlements (mainly for workers) in member states
through legal principles, the most important of
which is nondiscrimination. The principle of freedom of movement gave rise to two regulations
outlawing nationality-based discrimination
against mi grant workers' access to insurancebased social benefits (revised as regulation
1408/71) and against them and their families in
other social assistance (revised as regulation
1612/68). Sex-based discrimination was made unlawful in Article 119 of the Treaty of Rome, which
required equal pay for men and women doing the
same work. Between 1975 and the mid-1980s,
five directives followed. These widened the scope
of equal pay, extended the right of equality into
other conditions of employment, applied the principle to statutory and occupational social security
schemes, and gave comparable entitlements to
self-employed women. Another directive was
passed in 1992 to protect pregnant women workers and to guarantee a certain level of pay and matemity leave.
Rights that are not based on the nondiscrimination principle include (1) consultation over re-

Citizenship

dundancy plans (downsizing plans) and protection

of conditions of employment when work is transferred to another undertaking (covered by directives in the 1980s) and (2) consultation and protection in situations of risk and hazard at work
(stemming from the Single European Act of
1986). Further consultative rights for workers are
likely to emerge from the Social Protocol of the
TEU, which was incorporated into the Amsterdam
Treaty. A clutch of socioeconomic measures, including some of those just mentioned and others
relating to the young and elderly, was introduced
through the Charter of Fundamental Social Rights
for Workers (Social Charter) of 1989.
The basis for rights-freedom of movement
of production, capital, labor, and services-has
led to criticism that European citizenship is restricted to the "citizen-as-worker" (making it particularly defective for women and other people
who are not in regular, conventional employment)
instead of reflecting the normative principle that
people are citizens because they are human beings. Also, although ECJ jurisprudence has
tended-spasmodically-to expand the scope of
rights and to limit anomalies within and across
states, the legal instruments and enforcement procedures can make it difficult for people to claim
rights that are common across the EU.1t is also argued that the evolution of European citizenship
replicates in a larger arena the exclusion of people
without the right nationality. (Third country migrants, however, do have some protection if they
are members of amigrant EU family or live in
states that adhere to a nonbinding recommendation that they be treated the same as intra-Community migrants. Protection can also result from
agreements between the EU and third countries.)
Concems about the narrowness of rights began to be acknowledged in the Community in the
mid-1970s, grew with the momentum of discussion of an "ever closer union" in the 1980s, and
were reflected in the TEU, which "constitutionalizes" the notion of Union Citizen, adumbrates
links with the European Convention on Human
Rights, refers to rights to information and redress
within the common institutions, and requires
member states to agree upon certain transnational
political rights. The last provision includes the
rights of nationals of any member state to be protected by the diplomatic and consular services of
another state when outside the EU and to vote and
stand for office in municipal and European elec-

43

tions (not general elections) wherever they reside

within the EU. Though citizenship is usually
thought of as an individualistic concept, it should
be noted that the TEU also constitutionalizes a
channel for inhabitants of regions collectively to
influence common policies through the Committee of the Regions.
Broadly speaking, there are two kinds of assessment of European citizenship, which might be
labeled "minimalist" and "dynarnic." The first approach stresses formal legal rights and their limitations. All critics note the exclusion of general
elections, which most close1y relate to state sovereignty, and potential derogations from provisions
for municipal and European elections. These are
possible where there are specific problems, especially questions of national identities, as in Luxembourg where the proportion of residents from
other member states is larger than elsewhere
(Closa, 1995). 'Leary's trenchant analysis shows
that the new voting rights are little more than reciprocal arrangements that could exist, and sometimes do, irrespective of EU membership; that the
direct link between individuals and the center is
slight (see also the ruling in the German Constitutional Court case of Manfred Brunner and Others
v. The European Union Treaty); and that it will be
difficult in practice to use the right to diplomatic
and consular protection by other member states
('Leary, 1995). Curtin and Meijers identify
hypocrisy on the part of member state govemments, except Sweden and the Netherlands, in
their ostensible intention to enhance rights to information (Curtin and Meijers, 1995). Member
states' restrictive applications of these measures to
information about border policies reinforce at a
European level the "closure" effects of citizenship
on people from outside the Community. In the social field, the Commission's capacity to expand a
regulatory regime of rights is restricted to what it
may opportunistically introduce in a context of a
reluctant Council of Ministers (Mazey, 1996).
Minimalist approaches also stress the limitations
of local partnership, regional subsidiarity, and the
status, powers, and budget of the Committee of
the Regions.
The dynamic approach, in contrast, focuses
on the interactions of practical policies and conceptual paradigms. For example, Weiner argues
that citizenship has never been static or uniform
(Weiner, 1995). There are also other accounts of
the contextual nature of its meaning and its histor-

44

Citizenship

ically varied practice among EU member states

(Gardner, n.d.). In addition to rights, Weiner includes "access" and "belonging" as aspects of citizenship (Weiner, 1995, 1996). She identifies in the
history of integration confluences of policy imperatives and the interests of key political actors that
together have created breaches in nation-state experiences of citizenship and opportunities for new
paradigms and practices.
In this kind of approach, the regulation of social rights and relations between EU institutions
and the "social," local, and regional "partners"
(which predate the TEU) are part of access and belonging. The period of acceleration toward union
is, in Weiner's account, a time of discernible
movement in the paradigm of citizenship, containing the seeds of new practice in the triggering of
rights. In particular, markets and migration have
made place, as weIl as nationality, the conceptual
and practical precondition for activating legal, political, and social rights. This could become significant not only for nationals of member states
but also for lawfully resident migrants from third
countries.
The idea of a breach-small but categorically
fundamental-is also central to alternative accounts of regions (Mazey and MitcheIl, 1993). Although not indicating fuIl-scale self-determination
for European regions, analysts note new interactions among regions with each other and more directly with Community institutions. Thus, coIlective citizenship (including access, belonging, and
rights) also no longer rests exclusively on nationality but also on place.
The two approaches are likely to conform
with different views about the future of integration. As former French foreign minister Claude
Cheysson once said, "European citizenship (in the
sense of direct links between the people of Europe
and its central institutions), places us in the realm
of the supranational, whereas European Union
[does] not" (quoted in Weiner, 1996).
The minimalist approach is consistent with
an expectation that European citizenship will be
"neonational": fundamentally nationality based
but with a European dimension added in
(Baubock, 1994). Those expecting such a development usually stress that the cultural diversity of
Europe and its historical conflicts are too deeply
rooted for there to be a strong transnational sense
of belonging like the one that nationality provides
in state-based experiences of citizenship.

The observation that place may trigger the

exercise of citizens' rights is consistent with a
"neoimperial" form of citizenship in the EU. For
those who see this prospect, ethnic homogeneity
or shared language need not be a precondition of
common citizenship (Howe, 1995). Indeed, the
protection of a public space where people have the
right to discuss and disagree may depend upon
cultural diversity and institutional pluralism-the
sine qua non of eighteenth century federalism in
the United States (Beer, 1993).
See also DEMOCRATIC DEFICIT; SUBSIDIARITY.
Bibliography
Baubock, Rainer. 1994. Transnational Citizenship:
Membership and Rights in International Migration.
Aldershot: Edward Elgar.
Beer, Samuel H. 1993. To Make aNation. The Rediscovery of American Federalism. Cambridge, MA: Belknap Press.
Closa, Carlos. 1995. "Citizenship of the Union and Nationality of Member States." Common Market Law
Review 32, pp. 487-518.
Curtin, Deirdre, and Herman Meijers. 1995. "The Principle of Open Government in Schengen and the European Union: Democratic Retrogression." Common
Market Law Review 32, pp. 391-442.
Gardner, J. P. N.d. Hallmarks of Citizenship; A Green
Paper. London: The Institute for Citizenship and the
British Institute of International and Comparative
Law, pp. 47-162.
Howe, PauI. 1995. "A Community of Europeans: The
Requisite Underpinnings." Journal of Common Market Studies 33, no. 1, pp. 27-46.
Mazey, Sonia. 1996. "The Development of EU Policies:
Bureaucratic Expansion on Behalf of Women?"
Public Administration 73, no. 4, pp. 591-609.
Mazey, Sonia, and J ames MitchelI. 1993. "Europe of the
Regions: Territorial Interests and European Integration; the Scottish Experience." In Sonia Mazey and
Jeremy Richardson, eds., Labbying in the European
Community, pp. 95-121. Oxford: Oxford University
Press.
O'Leary, Siofra. 1995. "The Relationship Between
Community Citizenship and Fundamental Rights in
Community Law." Common Market Law Review 32,
pp. 519-544.
Weiner, Antje. 1995. "Building Institutions: The Developing Practice of European Citizenship." Ph.D. thesis, Department of Political Science, Carleton University, Ottawa.
---.1996. "Making Sense ofthe New Geography of
Citizenship: Fragmented Citizenship in the European Union." Paper presented at the annual conference of the Political Studies Association (UK).

-Elizabeth Meehan

Cohesion Fund

CJTFs

See COMBINED JOINT TASK FORCES.

Clappler, Bernard (1913- )

Bernard Clappier was a French economist and senior civil servant who played an important behindthe-scenes role in the early years of European integration. In the late 1940s Clappier was head of
French foreign minister Robert Schuman's private
office at the time of the profound change in
French foreign policy that led to the Schuman Declaration. Between 1951 and 1954 Clappier was
director of external economic relations in the Ministry of Economic Affairs. In that pivotal position
Clappier was one of Robert Mrujolin's key supporters during the negotiations leading to the
Treaty of Rome; he and Mrujolin together helped
to convince skeptical French politicians and civil
servants of the virtues of the proposed European
Economic Comrnunity. In 1962 Clappier chaired
the first enlargement negotiations, which French
president Charles de Gaulle ended abruptly the
following year. In 1964 Clappier joined the Bank
of France, serving first as deputy govemor and
then (1974-1979) as govemor.

Closeness
Closeness is the principle that EU policies and institutions should be brought closer to, and made
comprehensible to, the EU's citizens. Closeness
could be achieved through the use of such mechanisms as referenda, institutional reform (e.g.,
more power for the European Parliament), and the
provision of greater direct benefits.
See also DEMOCRATIC DEFICIT; LEGITIMACY.

CMEA
See COUNCIL FOR MUTUAL ECONOMIC ASSISTANCE.

Co-declslon Procedure
The extremely complex co-decision legislative
procedure, introduced in the Treaty on European
Union (Article 189b) in order to give the European Parliament (EP) more power and thereby enhance the EU's democratic accountability, adds a
third stage to the two stages that existed under the
earlier cooperation procedure and gives to the EP
a veto over proposals of which it does not ap-

45

prove. The most distinctive features of the co-decision procedure come into play if, at second
reading stage, the positions of the Council of
Ministers (which can usually act by qualified majority vote under the procedure) and the EP (acting by a majority of its members) diverge. In that
case a conciliation comrnittee, consisting of an
equal number of representatives of each institution, can be convened. If the comrnittee agrees on
a joint text, both the Council and the EP must
give their approval for it to be adopted; if the
comrnittee cannot agree on a joint text, the Council mayadopt it unilaterally, but the EP (acting by
a majority of its members) has the power to veto
the adoption. Although intended to allay a widespread popular perception of poor democratic accountability, co-decision's complexity made it a
caricature of the EU's seeming remoteness and
unfathomableness. Yet, perhaps because of the
EP's eagemess to prove that greater parliamentary involvement and improved efficiency in decisionmaking are not incompatible-or simply that
the new technique was workable-procedurally
co-decision has been reasonably successful, although each co-decision reached takes an average
of approximate1y one year. The 1997 Amsterdam
Treaty greatly extended the scope of co-decision
and simplified the procedure by giving up the
third stage.
See also DECISIONMAKING PROCEDURES.

Coheslon Fund
Established in May 1994 under the terms of the
Treaty on European Union (TEU), the Cohesion
Fund contributes to environmental and infrastructure projects in economically underdeveloped
member states (those with aper capita GNP of
less than 90 percent of the EU average), in order
to help them meet the convergence criteria for
Economic and Monetary Union (EMU). In reality,
the Cohesion Fund was a thinly disguised side
payment to Greece, Spain, Ireland, and Portugal to
ensure their support for EMU during the intergovemmental conference that resulted in the TEU.
Championed by Felipe Gonzalez, the fund was approved in principle after tough bargaining in the
run-up to the December 1991 Maastricht sumrnit
and generously endowed only after equally tough
negotiations that culminated in the Edinburgh
sumrnit ofDecember 1992.
See also COHESION POLICY.

46

Cohesion Policy

Coheslon Pollcy
Cohesion-the reduction of economic and social
disparities between richer and poorer regions-is
a fundamental objective of the EU. Not only do
such disparities threaten the integrity of the single
market and prospects for Economic and Monetary
Union (EMU), but their existence is incompatible
with the sense of community and solidarity that,
ideally, should infuse the movement for European
integration. Indeed, an unusual blend of idealism
and pragmatism has motivated the quest for cohesion, especially since the EC's Mediterranean enlargement in the 1980s. Yet concerns about the
management and utility of structural and cohesion
funds (the means by which cohesion is promoted),
and the projected cost of cohesion in an EU encompassing the economically underdeveloped
Central and Eastern European states, have cast the
future of cohesion policy in doubt.
Cohesion policy--encompassing regional
policy (to reduce spatial disparities, regenerate old
industrial areas, and assist rural deve1opment), aspects of social policy (to combat long-term unemployment and foster vocational education and
training), and a small part of the Common Agricultural Policy (CAP) (to assist rural developmentHeveloped relatively late in the EC's history. The preamble of the Rome treaty mentioned
the need to reduce regional disparities, but the
treaty itself inc1uded few redistributive mechanisms. The European Social Fund (ESF) and the
European Investment Bank (EI), both established by the treaty, were not intended primarily to
promote cohesion but were nonetheless expected
to help the EC's poorer regions. Similarly, Artic1e
92(3) dec1ared that national subsidies were compatible with the common market if they promoted
"the economic development of areas where the
standard of living is abnormally low or where
there is serious underemployment."
Apart from those concessions, the prevailing
attitude in 1957--enunciated in Artic1e 2 of the
treaty-was that the common market would, of its
own accord, "promote throughout the Community
a harmonious development of economic activities" and thereby lessen disparities between regions. After all, the treaty was a package deal to
distribute losses and gains between member
states, not to redistribute resources between rich
and poor regions. In any case, with the notable exception of the south of Italy, regional disparities in
the EC of six member states were not as striking

as in the enlarged EC of nine, ten, and twelve

member states or the EU of fifteen member states.
Successive enlargements therefore increased
regional disparities with regard to income, employment, education and training, productivity,
and infrastructure. The EC's growing regional differences manifested themselves in a north-south
divide, with Ire1and inc1uded in the southern
camp. The spatial characteristics of the Community's regional imbalance conformed to the coreperiphery concept used extensively by economists
and social scientists to analyze inequalities between or among regions. As a result, the Community built its cohesion policy largely on the assumption of a poor periphery (Scotland, Ire1and,
Portugal, central and southern Spain, Corsica,
southern Italy, Greece, and-after 199O--eastern
Germany) and a rich core (southern England,
northeastern France, the low countries, northwestern Germany, and northern Italy).
Protocol30 of Ireland's 1972 act of accession
to the EC emphasized the need to end regional
disparities in the Community, but the European
Regional Deve10pment Fund was established only
in 1975, largely to compensate Britain for its poor
return from the CAP. The EC began to coordinate
member states' regional aid schemes in the late
1970s, although its own regional aid policy remained rudimentary. The extent of the EC's failure to redress regional imbalances became more
apparent after Greece joined in 1981 and in the
run-up to Spanish and Portuguese accession in
1986. Concern that the EC's existing disadvantaged regions in southern Italy and Greece would
suffer as a result of Iberian enlargement precipitated a row between member states in early 1985
over Integrated Mediterranean Programs (IMPs),
an early instrument of cohesion policy. By taking
personal responsibility for resolving the IMP issue, newly installed Commission president
Jacques Delors signaled the enhanced importance
of cohesion during his administration.
Economic, political, and moral arguments
underpinned the Commission's efforts to promote
cohesion in the aftermath of the EC's second and
third enlargements. Delors had long been aware of
a growing rich-poor divide in the Community,
which the accession of Spain and Portugal would
greatly exacerbate. The Commission's pro gram
for 1985 cautioned that regional disparities "could
become a permanent source of political confrontation" and urged that the south be given "a fairer

Cohesion Policy

share of the benefits of economic development"

(Commission, 1985, p. 15). Delors warned the European Parliament in March 1985 that enlargement negotiations with Greece, Spain, and Portugal had "revealed a tension in Europe which is,
let's face it, a tension between north and south. It
sterns not only from financial problems but from a
lack of understanding, from a clash of culture,
which seems to be promoting certain countries to
turn their backs on the solidarity pact that should
be one of the cornerstones of the Community, solidarity being conceived not in terms of assistance,
but rather as an expression of the common-weal,
contributing to the vigor of the European entity"
(Delors, 1985, p. 6).
The single market program greatly boosted
the arguments of the Commission and the poorer
countries in favor of a vigorous cohesion policy.
The gradual worsening of regional disparities
since the 1960s suggested that market liberalization would broaden rather than narrow the Community's rich-poor divide. Advocates of a stronger
structural policy exploited uncertainty about the
distributional consequences of the single market
program to press their claims for cohesion. Fear
that the single market would make rich regions
richer and poor regions poorer and that the dynarnic of market liberalization would intensify existing disparities led to an explicit link between
cohesion policy and the 1992 pro gram. In the
Commission's words, "the reduction of disparities
and the strengthening of economic and social cohesion should go hand in hand with the implementation of the large internal market" (Commission,
1992b, p. 9).
Apart from the "solidarity principle," the
likely economic and political impact of greater regional disequilibrium strengthened the case for
cohesion. The EC would not prosper, let alone
survive, if excessive disparities caused poorer
member states to block legislation and impede implementation of the single market program. Accordingly, during the 1985 intergovemmental conference (IGC), the Commission advocated a
substantial redistribution of resources to the Community's less-prosperous regions. Although one of
the attractions of the single market program for a
financially strapped EC was its relative lack of
cost, the Commission's emphasis on cohesion
raised the prospect of a sizable budgetary hike.
The IGe deferred until later adecision about inereasing the amount of struetural funds, EIB

47

loans, and other forms of assistance for poorer regions but committed member states to promoting
economic cohesion and reducing regional diversity.
As a result, Article 23 of the Single European
Act (SEA) added a new title, "Econornic and Social Cohesion," to the Treaty of Rome. This committed the Community to "reducing disparities between the various regions and the baekwardness
of the least favored nations," called for coordination between other EC policies and cohesion, and
obliged the Council to reform the structural funds
within a year of the SEA's implementation, on the
basis of a Commis si on proposal. Delors sub sequently deseribed the revised treaty's provisions
on structural policy as one of the SEA's "fundamental objeetives" (Delors, 1988, p. 11).
Oe/ors / and Reform of the Structura/ Funds
In February 1987 the Commission introduced a
five-year budgetary package to control agricultural spending, increase the Community's own resources, and impose budgetary discipline. The soealled Delors I paekage also proposed reform of
the structural funds (the financial instruments of
cohesion policy), a doubling in real terms of the
resources available through them (making a total
of ECU 60 billion available from 1989 to 1993),
and a particular foeus on regions with aper eapita
income below 75 percent of the Community average. Just as Delors had used the volurninous Ceccbini Report to bolster bis arguments in support of
the single market, he now cited the PadoaSehioppa Report to make a compelling case for
reform of the structural funds. Published in April
1987, that report assessed the "implications for the
economic system of the Community of ... [the]
adoption of the internal market program and the
latest enlargement." One of its major conclusions
pointed out "the serious risks of aggravated regional imbalances in the course of market liberalization" and, in a memorable phrase, warned that
"any easy extrapolation of 'invisible hand' ideas
into the real world of regional eeonornics in the
process of market opening would be unwarranted
in the light of eeonomic history and theory"
(Padoa-Schioppa, 1987, pp. 3,4, 10).
This was grist to Delors's mill and strengthened the southern countries' determination to win
a sizable redistribution of resources. As a staunch
conservative, however, British prime minister
Margaret Thatcher instinctively rejected Padoa-

48

Cohesion Policy

Schioppa's advocacy of guiding the "invisible

hand." In her view, market liberalization throughout the Community would foster rather than hinder economic development in the southern member states. Helmut Kohl sympathized with the
southern states but knew that Germany would
have to contribute most of the proposed budgetary
increase. Thus the battle lines were drawn for a
protracted dispute that, thanks to Kohl's largesse,
the European Council eventually resolved at the
special Brussels summit in February 1988. A delighted Delors called the European Council's decision to double the structural funds by 1993 "a second Marshall Plan" (quoted in the Economist,
February 27, 1988, p. 41). Despite Thatcher's misgivings, the northern countries' endorsement of
the Delors I package demonstrated their acceptance of redistributional solidarity as part of market integration.
Having agreed to double the combined size
of the three structural funds-the regional policy's
European Regional Development Fund (ERDF),
the ESF, and the Guidance Section of the CAP's
European Agricultural Guidance and Guarantee
Fund (EAGGF)-the Council adopted regulations
in June and December 1988 reforming the EC's
cohesion policy. Substantially increasing the
structural funds was not enough to redress regional imbalances. As Delors told the European
Parliament in January 1988, "Cohesion is not simply a matter of throwing money at problems .... It
implies rather a willingness to act at Community
level to redress the disparities between regions
and between different social groups" (Delors,
1988, p. 11). Accordingly, the 1988 reform sought
to turn the structural funds into effective instruments of economic development. That transformation involved welding the EC's regional policy
and aspects of EC social and agricultural policies
into a powerful mechanism to narrow the northsouth divide.
The 1988 reform radically revised structural
policy by introducing a number of new principles
and procedures and strengthening existing ones.
They inelude:
Additionality. Structural funds must add to,
not substitute for, member state public expenditure.
Partnership. The partnership principle is the
key to involving regions, not just national
govemments, in formulating and implement-

ing structural policy. Because Community operations complement corresponding national

measures, there must be elose consultation
and cooperation between the Commission,
member states, and regional or local bodies at
all stages of a structural pro gram. Eligible
member state plans for regional assistance are
incorporated into Community Support Frameworks (CSFs), which are contractual agreements between the Commission, national, and
regional authorities. CSFs set out the program's priorities, type of aid, methods of financing, and so on. Moreover, the Commission can take the initiative and propose that
member states and regions participate in operations of particular interest to it. Operational
prograrns usually last five years.
Programming. The structural funds reform
involves a major switch from project-related
assistance to program assistance and decentralized management. This puts the emphasis
on planning and continuity rather than on ad
hoc activities. Under the old system the Commission dealt with thousands of separate projects; now the Commission oversees a much
smaller number of CSFs.
Concentration. Instead of spreading the EU's
financial resources widely and ineffectively,
structural funds now concentrate on a few
major objectives. Functional and geographic
concentration restricted Community assistance to five priorities:
Objective 1. Assist "regions whose developme nt is lagging behind." These are regions with aper capita GDP of less than
75 percent of the EU average and inelude all of Greece, Portugal, and the island of Ireland; large parts of Spain; and
southern Italy, Corsica, and the French
overseas departments. They account for
about 20 percent of the Community's
population. Funding source: ERDF, ESF,
EAGGF Guidance Section, EI, and the
European Coal and Steel Community
(ECSC). The ERDF is the largest structural fund, and the Community spends
almost 80 percent of it on Objective 1.
Objective 2. Promote economic conversion
and modernization in deelining industrial areas, ineluding about sixty sites in
nine me mb er states, notably Britain,
Spain, France, and Germany. The Com-

Cohesion Policy

munity mostly helps small and mediumsized enterprises in new economic sectors and vocational training. Funding
source: ERDF, ESF, Ern, and ECSC.
Objective 3. Combat long-term unemployment by assisting workers over twentyfive, anywhere in the EU, who have been
unemployed for more than one year.
Funding source: ESF, Ern, and ECSC.
Objective 4. Integrate young people, anywhere in the EU, into the workforce.
Funding source: ESF, Ern, and ECSC.
Objective 5. Adjust agricultural structures
(with a view to CAP reform, aims to adjust production, processing, and marketing structures in agriculture and
forestry). Funding source: EAGGF
Guidance Fund.
Economic and Monetary Union

Moves toward EMU in the late 1980s raised concerns in the EC's poorer countries similar to their
concerns with efforts to complete the internal market earlier in the decade. For Delors, the architect
of structural policy reform, EMU was inconceivable without a sizable increase in Community assistance for disadvantaged regions. The 1989 Delors Report pointed out that because EMU would
deprive member states of their ability to devalue,
it could worsen the balance-of-payments difficulties of poorer countries. Indeed, the need for
member states to harmonize their budgetary policies, coupled with a loss of exchange rate flexibility, portended serious problems for less-developed
regions (Delors, 1989)
During the IGC on political union, Ireland,
Spain, and Portugal attached the highest priority to
strengthening structural policy and called for a new
framework to enable the putative EU to promote
cohesion in the context of closer political and economic integration. Predictably, the three countries
asserted that, in the absence of mechanisms to redistribute the benefits of EMU, the more central
and prosperous regions would gain disproportionately. Using moral, political, and economic arguments honed during the Delors I debate, the poorer
countries claimed that failure to meet their demands could undermine the EU's foundations. Felipe GonzaJ.es, the Spanish prime minister and the
poor countries' standard bearer, fought tenaciously
in the run-up to the Maastricht summit to win a
greater Community commitrnent to cohesion.

49

From the poorer countries' point of view, the

redistributive provisions of the Treaty on European Union (TEU) were highly satisfactory. Articles 2 and 3, which enumerated the EU's tasks and
activities, specifically mentioned cohesion.
Arnendments to Article 130 listed rural developme nt as an objective of structural policy; stipulated that the Commission must report every three
years on progress made toward achieving cohesion; conceded that a new mechanism, outside existing funds, could be introduced; and provided a
framework for extending and deepening Community policies and actions to promote cohesion in
parallel with the degree of political, economic,
and monetary integration in the EU.
Article 130d stipulated that the Council, acting unanimously on a proposal from the Commission, and after obtaining the assent of Parliament,
would set up a Cohesion Fund by the end of December 1993, to contribute to projects on the environment and on transport infrastructure. The purpose of the Cohesion Fund was to reconcile the
apparent contradiction in the treaty between the
budgetary rigor necessary for convergence and the
budgetary lenience inherent in cohesion.
At Spain's insistence, a special protocol supplemented the treaty's cohesion provisions. Apart
from agreeing to review the size of the structural
funds and to permit greater flexibility to meet new
needs, the protocol specified that the Cohesion
Fund would be for the benefit of member states
with aper capita GDP less than 90 percent of the
EU average and a pro gram designed to achieve
convergence. In effect, that meant Spain, Portugal,
Ireland, and Greece. Without mentioning a figure,
the protocol eanmrrked 85-90 percent of the fund
to support environmental and transport projects.
Oe/ors 11

In a repeat of its 1987 performance, in February

1992 the Commission sent the Council a five-year
(1993-1997) budgetary package. Entitled "The
Means to Match Our Arnbitions," the Commission's fmancial perspective covered the costs of implementing the TEU (Commission, 1992a). In addition to cohesion, these included economic
convergence, promotion of Community competitiveness, and "amplification of external action." The
Commission proposed increasing the Community's
budgetary ceiling from 1.2 to 1.37 percent of GDP
by 1997 (an annual budgetary growth rate of 5 percent) and allocating ECU 11 billion for cohesion.

50

Cohesion Policy

The Commission also proposed improving

structural fund operations. Together with the Cohesion Fund, a projected 66 percent increase in Objective 1 funding would boost EU financial support
for Spain, Portugal, Ireland, and Greece by 100
percent. Some of the new spending on Objective 1
would go to the five new German states (the former East Germany), which had received a special
structural funds appropriation for the 1991-1993
period. Other objectives would receive a 50 percent increase in funding. Assistance for "regions
dependent on fishing" would become Objective
5(a)-fisheries, and Objective 5(b) would be estab1ished to support certain "rural areas" in the EU.
Circumstances in 1992 were hardly propitious
for such an ambitious proposal. In its first-ever
Community presidency, Portugal made little headway on Delors 11. At the June 1992 Lisbon summit,
the heads of government agreed only to postpone a
decision on it until the Edinburgh summit six
months 1ater. Britain, in the Council presidency for
the second half of 1992, had little sympathy with
Delors 11 and fretted about the security of its budget rebate. A deepening econornic recession, and
Germany's effort to meet the costs of unification,
put the future of Delors 11 further in doubt.
IronicaIly, the TEU ratification crisis-another gloomy deve1opment-may have saved Delors 11. Battered by a year of econornic and political setbacks, Community leaders wanted to
establish at Edinburgh their ability to act decisively
in the EC's interest. As one observer noted, it was
imperative for the Community "to avoid the high
costs of a failure whose repercussions would have
extended well beyond the budgetary arena"
(Shackleton, 1993, p. 387). The Delors 11 package
was also an ideal opportunity to demonstrate that
redistributional solidarity had survived the year's
setbacks. Once again, Fe1ipe GOllZ.iles represented
the southern countries' interests, and after intense
bargaining at the Edinburgh summit, Helmut Kohl
conceded most. The new financial perspective
agreed to at the summit more than doubled Community assistance for the least-prosperous countries (to ECU 30 billion in 1999). As the southern
member states must have known, with the Central
and Eastern European states knocking on the EU's
door, Delors 11 was probably their last chance to
get a big share of the EU budget. Paradoxically, in
view of imminent cutbacks in cohesion spending,
as a result of the accession of Finland and Sweden
the EU created another new priority (Objective 6),

applicable as of January 1, 1995, for the development of regions in those countries with very low
population densities.
Conclusion
Structural and cohesion funds ac count for
more than one-third of the EU's annual budget of
nearly ECU 100 billion. Structural funds have
risen from ECU 18 billion in 1992 to a planned
ECU 31 billion in 1999 (at 1992 prices). The cohesion fund is set to cost an estimated ECU 14.5
billion more between 1994 and 1999.
Is the money weIl spent? Apart from problems with the management of structural and cohesion funds, econornists disagree on the usefulness
of cohesion policy. Empirical evidence is difficult
to distill because of the multifaceted nature of
econornic growth and dec1ine. Thus, a comprehensive Commission report on cohesion policy, covering the 1983-1993 period, conc1uded that the
north-south econornic divide in Europe is c10sing
but that the gap between rich and poor regions is
growing, notably in Britain (Commission, 1996).
The poorer member states' economic improvement is due to a number of factors, not least EUwide growth in the late 1980s and macroeconomic
policy reforrns in the rnid-1990s. Thanks to annual
growth weIl in excess of 5 percent and to sound
macroeconornic policies, Ireland's per capita GDP
rose from 63.6 percent of the EU average in 1983
to 89.9 percent in 1995. Spain moved up from
70.5 percent in 1983 to 76.2 percent in 1995, a
slight drop from 1993. Portugal c1imbed from
55.1 to 68.4 percent, but Greece only raised its per
capita income from 61.9 to 64.3 percent, despite
receiving hundreds of rnillions of ecu in aid. The
key to econornic deve10pment in the poorer member states wou1d appear to be a combination of
sound macroeconornic policies, a favorable international econornic c1imate, large allocations of resources from Brussels, and c10ser coordination in
the formulation and implementation of EU and
national regional policies.
Yet the future of cohesion policy is in doubt.
Rich member states resent generous financial
transfers to countries that are either doing weIl
econornically (Ireland has the highest growth rate
in the EU) or that seerningly abuse regional aid
(Greece has a reputation for fraud and rnismanagement). The Commission's arguments that cohesion is working and that net contributors to the
budget such as Germany and the Netherlands ben-

Cold War

efit from extra public works contracts and other

business in the recipient countries are unlikely to
assuage cash-strapped "donor" governments.
The cost of cohesion in an enlarged EU with
numerous poor Central and Eastem European
countries is potentially prohibitive. Nevertheless,
the Commission's Agenda 2000 submission to the
Council identified five applicant countries for relatively early EU membership and proposed keeping
EU funding for economic and social cohesion at
0.46 percent of the EU's GDP, amounting to ECU
275 billion over the period 2000 to 2006. The
Commission also proposed reducing the structural
fund objectives from seven to three: a strengthened
Objective 1, a redefined Objective 2, and a new
Objective 3 (developing a strategy for human resources). ECU 45 billion would be earmarked for
the new member states-which are likely to join
only toward the end of the financial perspectiveincluding ECU 7 billion in preaccession aid. Total
transfers from the structural and cohesion funds together would be limited to 4 percent of a recipient
country's GDP (Commission, 1997).
Although the Commission's budgetary proposals are modest by the standards of many other
estimates, they are likely to generate controversy
in existing and prospective member states. Net
contributors to the EU budget want to pay less; recipients of large-scale donations from the structural and cohesion funds want to maintain or increase their share; and prospective member states
want more than the EU is likely to offer. Accordingly, the next round of budgetary negotiations, in
1999, is likely to be highly contentious and could
mark the end of a generous but controversial
phase of EU cohesion policy.
See also COHESION FUND; COMMUNITY SupPORT FRAMEWORK; DELORS I; DELORS 11; STRUCTURAL

FUNDs.

Bibliography
Commission. 1985. Commission's Programfor 1985.
Bulletin of the EC, S/I-1985. Luxembourg: Office
for Official Publications of the European Communities.
- - - . 1992a. "From the Single Act to Maastricht and
Beyond: The Means to Match Our Ambitions." Bulletin of the European Communities, Supplement
1/1992.
- - -. 1992b. Reform ofthe Structural Funds: A Tool
to Promote Economic and Social Cohesion. Luxembourg: Office for Official Publications of the European Communities.

51

- - . 1996. Cohesion Report. COM (96) 542. Luxembourg: Office for Official Publications of the European Communities.
- - . 1997. Agenda 2000. COM(97)2000 final. 2
vols. Luxembourg: Office for Official Pub1ications
of the European Communities.
De1ors, Jacques. 1985. "Speech to the European Parliament, March 19, 1985." Bulletin of the European
Communities, Supplement 4/1985.
---.1988. "Speech to the European Parliament, January 20, 1988." Bulletin ofthe European Communities, Supplement 1/1988.
- - - . 1989. Report of the Committee for the Study of
Economic and Monetary Union. Luxembourg: Office for Official Publications of the European Communities.
Hooghe, Liesbet, ed. 1996. Cohesion Policy and European Integration: Building Multi-Level Govemance.
Oxford: Oxford University Press.
Padoa-Schioppa, Tommaso, et al. 1987. Efficiency, Stability and Equity: A Strategy for the Evolution of the
Economic System of the European Community. Oxford: Oxford University Press.
Shackleton, Michael. 1993. "The Community Budget
After Maastricht." In Alan Cafruny and Glenda G.
Rosenthai, eds., The Maastricht Debates and Beyond. Vol. 2 of The State of the European Community. Boulder: Lynne Rienner.

-Desmond Dinan

Cold War
Historians have displayed a great reluctance to address head-on the relationship between the Cold
War and the movement for European integration.
Those writing in the early decades of the superpower rivalry tended at best to see an oblique and
obtuse correlation that stressed a fairly independent European process of cooperation that happened to coincide with the origins and early development of Soviet-U.S. rivalry. From the late 1960s
through the 1980s, the emphasis historiographically tumed to the interconnectedness of Europe's
trans national activity and the global capitalistcommunist confrontation. In the post-Cold War
era, this interdependency has prevailed, with some
interpretations emphasizing the growth of integration "self-determination" in the last two decades.
Although the onset of the Cold War coincided
with the genesis of integration, there was initially
near neglect of the geostrategic factors behind Europe's integration movement. The reality has become clearer with the release of many state and
private papers, especially in the 1980s: superpower politics and diplomacy heavily shaped the

52

Cold War

emergence of the European movement and of European institution building between 1947 and
1957. A elear and elose interplay existed between
ambitious and even idealistic integrationist
schemes and the Cold War international system as
prescribed by the United States and USSR. A simple, monocausal Cold War explanation of integration is untenable, however, not only because European unity ideas were weIl formulated and
articulated as early as the interwar period, and
even more so by the wartime govemrnents-in-exile in London, but also because strong federalist
sentiment was gaining a significant foothold
among many European political elites before
1947. Acting and working together for comrnon
purposes in common institutions with common
policies became the mantra of the integrationists.
Unification was not merely a product of the EastWest conflict, for long before the "Soviet threats
and American inducements," multilateralism,
supranationality, and the relinquishing of national
interests were dynarnic European topics (Lipgens,
1982).
However, national governments did little to
implement these plans until ideological and political considerations concerning Soviet-U.S. belligerency divided Europe and the world in the
1947-1950 period. Only when Western Europe's
initial postwar anxiety about Germany was added
to growing suspicion of Comrnunist Russia and its
newly formed bloc did European integration become a priority in the overall Western agenda.
Western economic reconstruction, growth, and
prosperity were seen as necessitating a collective,
nondivisive enterprise that bound the Atlantic-rirn
states together. Thus, Washington accepted limited
European integrationist vehieles for its Cold War
purposes. With the Marshall Plan, U.S. foreign
policy dictated a general economic approach that
both solidified and protected the West from the
subversion and aggression of the Soviets and employed regional cooperation modes such as the
Organization for European Economic Cooperation
(OEEC) to face down the enemy with a concerted
economic front. The Czechoslovak coup (1948)
and Berlin blockade (1948-1949) further polarized the continent and drove Western Europe into
a security alliance with the United States. Military
defense and economic solidarity were meshed in
1949 and 1950.
Although Arnericans invoked the primacy of
the security imperative, instituting a world econ-

omy in which trade and capital moved easily

across fron tiers was another driving force for
Washington (Hogan, 1987). Rejection of interwar
economic nationalism was shared in most Western
capitals but was especially strong arnong integrationists. Their vision was grounded in an awareness of the limits of European power if based on
individual nation states. For them, combining national markets to form a large-scale, efficient, and
competitive regional economy was aprerequisite
for an interdependent, free, and fluid trading system: a unified, liberal, internationalist, and capitalist Europe had to be built to regain Europe's
economic standing and authority. A primary objective was for Europe to become areal competitor in the emerging world market.
The motivations underlying U.S. diplomacy
were a vital part of the beginnings of European integration. An anti-Soviet posture in part explained
the Euro-American partnership built after 1947,
but a broader vision of a reconfigured global economy made the notion of managing European affairs through regional multilateral organs very attractive. Common institutions of economic
m:magement and regulation would be ideal for
avoiding the recurrent warfare of Europe's past.
Turning centuries of Franco-German rivalry into
peaceful reconciliation and associating France and
Germany with their neighbors were major objectives of the integrationists. For them, Germany's
integration into the Western comrnunity was
mandatory and the economic approach the preferable one. Europeans were talking about a new
statecraft of collective action, either through federal or supranational institutions at most or
transnational or intergovernmental arrangements
at least (Duchene, 1994). The seed time of integration was therefore when the superpower struggle
over the fate of Europe opened the door for novel
integrationist experiments that both facilitated a
unified resistance against comrnunism and the enhancement of a bourgeois international economic
order. For the Americans, world politics was
world trade, in which Western Europe would play
a paramount part (De Porte, 1979).
Europeans could accept the U.S. imperative
that integration fortify the East-West divide but
also had their own reasons to integrate. These included the need to reinforce, where necessary, the
nation-state (rather than supersede it); to make
small states more influential; and to use new crossnational organizations to increase national legiti-

Cold War

macy and efficiency (Milward, 1984, 1992). Bolstering national governments by using integrative
mechanisms was consistent with, and not contradictory to, U.S. economic and strategie aims. There
is no denying that many West Europeans had an urgent set of national and regional impulses and reasons to integrate and that they were willing to employ Cold War politics for their own ends. Led by a
tiny band of opportunistic politicians and bureauerats who "networked" within Europe and across
the Atlantic, governments practiced the cross-fertilization of U.S. and European objectives (Willis,
1968). The glue was anticommunism, but common
economic perceptions in Europe more and more
became strong integrative forces. The result was
not simply free trade politics as conceived by the
United States, but a continent-centered Euro-Atlantic common front for European recovery and
economic revival and for the containment of both
Germany and Russia. Europe's economic reinvigoration was linked to the reform of relations between its states, away from the national sovereign
model and toward common rules and institutions.
What these European countries were undertaking
was abasie but far-reaching reform of international
relations (Laurent, 1994; Reynolds, 1985).
Beyond geopolitical considerations about the
superpowers, many European leaders sought to
create a competitive "Third Force" in their region
with relative independence from both superpowers. Cooperative multilateral arrangements with
some pooling of sovereignty would ultimately result in a genuine, global competitive force, but
only with the establishment of a customs union
and later an economic union. There was within the
unificationist mentality a wish to preserve Europe's independence from the United States in the
form of an alternative to both superpowers that
would be based on the establishment of a vast European economy of scale. European initiatives
such as Benelux and the OEEC became early
models for the fulfillment of both reconstruction
and integration. This process neither resisted U.S.
hegemony nor entirely accepted it but sought to
maximize Europe's freedom of maneuver. Anchoring the new German nation in a sectoral,
supranational entity promulgated by the consolidated tripie alliance of the United States, Britain,
and France served both the containment imperative and integration rationale (Reynolds, 1994).
This interplay of motives to remake Europe
fused the attainment of economic well-being and

53

political stability with a quest for military security.

If initially integration was based on steadfast U.S.
material and military support and especially on
the economic world view of the United States, the
consensus of "Little Europe" (the original six EC
member states) was for economic regionalism
with a Franco-German nexus. The agreement had
to do with making control of their economies external to the nation and functioning with a joint
authority that had powers superseding those of the
state. In contrast to many U.S. analysts who
stressed the Marshall Plan as the origin of the
transatlantic relations hip and of integrated Europe, most Europeans focused on the European
Coal and Steel Community (ECSC) as the true
start and first real step toward unification (Gillingham, 1991).
Washington embraced this form of integration in the 1950s, seeing it as a means of amplifying Western opposition to the Soviets and of promoting the goal of an open Europe, devoid of
trade and other barriers and guided by free market
forces. The United States asked that European
trade and payments be liberalized and in return
agreed to promote European cohesion and a degree of European unity. Even Britain's early refusal to participate in these unique economic enterprises did not deter Washington, Bonn, or Paris.
In fact, by the time a general market formation
was grafted onto the ECSC skeleton in the
1955-1957 period, the impact of U.S. encouragement, French leadership, and German cooperation
created a potentially mammoth economic combine that owed more to hard bargaining and strategie compromises between the Six than to the perceived Soviet menace or U.S. pressure. With
Germany firrnly rooted in both the regional economic and security organs by mid-decade, a ParisBonn entente took the lead in the New Europe.
The restoration of European independence
through commercial might was tightly joined to
the integration goal (Winand, 1993).
If the Americans had jump-started integration, the EC inaugurated a new era and gave a distinct European dimension to the Cold War. The
EC was not only a reflection of the ideological
and diplomatie Cold War strategy but also a result
of a coherent European rationale that argued that
global economic power through cross-national
collaboration would uplift Europe's overall international status and prestige. Europe of the Six
functioned as a crucial part of a Euro-U.S. condo-

54

Cold War

minium and hegemonie bloc that was dominant in

global economic and security matters, and continental actions were furthermore based on regional
orientations that often differed from those of
Washington. The theory was that centralized European decisionmaking would encourage economic integration that would then "spill over" into
the social, defense, and foreign policy realms and
would in time bring about the desired political
union.
In the prosperous 1960s, a stable, open, democratic, and capitalist Europe became a reality in
international politics. Not yet speaking with one
voice but often through commonly shared outlooks and policies, the EC was able to withstand
both considerable internal discord in the Gaullist
period and rising trade frictions with the United
States. The independent aspect of integration was
augmented by these French tendencies and
transatlantic rifts. De Gaulle attempted to put his
stamp on the integration movement by channeling
the EC's development in a strictly intergovernmental direction, without supranational authority
or majority rule making.
The stunning success of the EC encouraged
other nations on both sides of the divide to seek
membership or at least eloser ties (Young, 1991).
Two major EC initiatives further demonstrated the
viability and attractiveness of integration in this
era of emerging multipolarity: trade opening to
Eastern Europe and the formation of intimate relations with a large group of newly independent
states of the Third World. The EC's relative freedom from the influence of others was most evident in the move to diminish communist power in
Eastern Europe by drawing Soviet bloc countries
into a competition that would either exhaust them
or seduce and lure them away from the USSR.
The risky nuelear arms and missile race, basically
economic in intent and U.S. in authorship, was a
complementary segment of this global test by
means of which it was hoped that Western productivity and performance would cripple the totalitarian economy and system. The expansion of EastWest trade was a European outreach program and
major facet of the detente process. This politics of
compromise with the East reached fruition with
the broader European peace settlement based on
Willy Brandt's Ostpolitik in the early 1970s. It
marked the point when European moves assumed
a leading role in determining the Cold War's future (Simonian, 1985).

East-West relations were significantly influenced in a peaceful direction by the EC's Eastern
policy, which reached its zenith in the Helsinki act
of 1975. Political cooperation and multilateral
diplomacy were now driving the EC far beyond its
original economic impetus and goal of regulating
local conflict. Beyond attracting new members,
the EC enticed Soviet bloc states with the benefits
of extended import-export relationships. At the
same time, the EC made progress on monetary affairs, foreign policy cooperation, and institutional
reform. Intensified stages of integration that
moved beyond extensive collaboration to actual
unity were increasingly part of the EC discourse.
Further integration was semistalled by the
stagflation of the 1970s, but with the second relance of the mid-1980s, ineluding the Single European Act and Spanish and Portuguese accession,
a self-generated, giant, and imaginative leap ahead
took place. European integration was influencing
the waning Cold War more than the reverse. As
the Cold War drew to a elose, Community formation (the making of a larger and more elosely knit
transnational unit) was a prime beneficiary of the
decline of military influences and the corresponding rise of economic factors in world politics. As
political competition between the two systems
lessened, intra-West and intra-European relations
mirrored global trade competition rather than superpower rivalry. The striking improvement in
East-West relations gave more and more room for
decisions about integration to be made on the European side of the Atlantic. The internal dynamics
of integration, not the international security
framework, were decisive factors.
The collapse ofthe Soviet bloc in 1989, partly
due to the EC's achievements, and the collapse of
the Soviet Union itself in 1991 gave a quick boost
and significant redirection to European integration.
Despite some apprehension about an enlarged,
uni ted Germany, Western Europe took bold steps
forward, first in accepting German reunification
and second in pressing forward the integration
agenda on a broad front during the intergovernmental conferences in 1991 (Ross, 1995; Zelikow
and Rice, 1995). There were problems associated
with these moves: unification did not dispel worries about Germany, and the TEU was excessively
dirigiste for many Europeans. The two initiatives
fell short of most federalist aspirations but recaptured the momentum for the step-by-step and incrementalist integration progress. However, the

Cold War

newly formed EU committed itself to total economic and monetary harmonization by century's
end, plus the application of the integration principIe in new areas such as justice, police, immigration, and foreign/security policy. Military integration (left by the wayside since 1954) and foreign
policy cooperation (only partly successful through
European Political Cooperation) were brought up
from the back burner in 1991.
Because the end of the Cold War coincided
with another bout of recession, economic uncertainty combined with the revival of ethnic nationalism to undercut many apparent EU advances.
Some ob servers even spoke about reaching the
limits of integration and of pushing European integration too far and too fast at the century's end. Yet
it was obvious that integration was no longer dependent upon or a branch of either U.S. economic
internationalism or the containment of the USSR.
A peaceful and prosperous Europe would now be
deterrnined by limited integration, the result of Europe's construction of a halfway house between
nationalism and internationalism (Baun, 1996).
Two post-Cold War challenges were to have
an impact on integration and the EU. One, the old
but now bigger German dilemma, persisted even
though Bonn's commitment to democracy and regional unity remained firm under Chancellor
Kohl. Uneasiness continued about Germany's becoming a regional hegemon and about an ensuing
"German Europe," but it was diluted by the obvious continuity of a "European Germany." The second challenge was an undeniable new task of eastward expansion to make the EU truly
pan-European. This drive was fused to the West's
need to forge a New European Order as the basis
for a regional security system, which it was hoped
would involve the Russians and Americans. It was
apparent that all questions of security and political
cooperation, and of further integration, would
have to be addressed in tandem with the development of democratic market economies in the East.
Some observers noted that the urgency to enlarge
was overshadowing the much-needed deepening
exercise that would reform EU institutions. Integration demanded enlargement and internal reorganization simultaneously, illustrating the continued complexity of factors that were intertwined in
any further development of integration.
Conflicting attitudes within the EU and the
Atlantic Alliance, even on the questions of EU enlargement and NATO expansion, made it dear that

55

the EU's goals would not be realized easily. Gone

was the Cold War cement that had once reinforced
the transatlantic relationship and European integration itself. Other factors would have to impel
the EU to find the internal political will and democratic consensus for additional integration.

Bibliography
Baun, Michael. 1996. An Imperfect Union: The Maastricht Treaty and the New Politics of European Integration. Boulder: Westview.
De Porte, Anton. 1979. Europe Between the Superpowers: The Enduring Balance. New Haven: Yale University Press.
Duchene, Fran~ois. 1994. Jean Monnet: The First
Statesman of Interdependence. New York: Norton.
GiUingharn, lohn. 1991. Coal, Steel and the Rebirth of
Europe, 1945-55. Cambridge: Cambridge University Press.
Hogan, Michael 1. 1987. The Marshall Plan: America,
Britain and the Reconstruction of Western Europe,
1947-52. Carnbridge: Carnbridge University Press.
Laurent, Pierre-Henri. 1994. "Reappraising the Origins
of European Integration." In H. 1. Michelmann and
P. Soldatos, European Integration: Theories and Approaches. Lanharn, MD: University Press of America.
Lipgens, Walter. 1982. A History of European Integration, 1945-47: The Formation of European Unity
Movement. Oxford: Clarendon Press.
Milward, Alan. 1984. The Reconstruction of Western
Europe, 1945-51. Berkeley: University ofCalifomia
Press.
- - - . 1992. The European Rescue of the NationState. Berkeley: University of California Press.
Reynolds, David. 1985. "The Origins of the Cold War:
The European Dimension." Historical Journal 28,
pp. 497-515.
Reynolds, David, ed. 1994. The Origins ofthe Cold War
in Europe: International Perspectives. New Haven:
Yale University Press.
Ross, George. 1995. Jacques Delors and European integration. New York: Oxford University Press.
Simonian, Haig. 1985. The Privileged Partnership:
Franco-German Relations and the European Community. Oxford: Clarendon Press.
Willis, F. Roy. 1968. France, Germany and the New Europe. Stanford, CA: Stanford University Press.
Winand, Pascaline. 1993. Eisenhower, Kennedy and the
United States of Europe. New York: St. Martin's
Press.
Young, lohn W. 1991. Cold War Europe. London: Edward Amold.
Zelikow, Philip, and Condoleezza Rice. 1995. Germany
Unified and Europe Transformed: A Study in Statecraft. Carnbridge: Harvard University Press.

-Pierre-Henri Laurent

56

Collegiality

Colleglallty
Collegiality refers to the operational style of the
"college" of the Commission-the group of commissioners themselves. Commissioners are supposedly equal in terms of formal authority, and the
president is merely "fIrst among equals" (although
the Amsterdam Treaty states that the Commission
"shall work under the political guidance of its
President"). In reality, some commissioners are far
more influential than others (based on a commissioner's country of origin, personal attributes, and
portfolio within the Commission), and the president is not always the most influential commissioner (based on the same considerations). Collegiality (whether real or imagined) and c1ubability
help to socialize the commissioners and make
them more "European" than national or ideological in outlook. Thus, for example, a commissioner
who is a Be1gian socialist may make adecision
that is in the EU's interest although not necessarily in Belgium's immediate national interest or in
the interests of European socialism.
See also COMMISSION.

COM

See

COMMON ORGANIZATION OF THE MARKET.

Comblned Joint Task

Forces (CJTFs)

Combined joint task forces (CJTFs) are an important operational expression of an emerging European Security and Defense Identity (ESDI) and a
developing Western European Union (WEU). With
the end of the Cold War, both the United States and
the Europeans hoped that as an ESDI emerged, the
European members of NATO would assurne
greater responsibility for their own defense. Moreover, events in Bosnia demonstrated the necessity
for European countries to be able to take military
initiatives themselves, outside of the NATO area
and without direct U.S. involvement. Accordingly,
in January 1994 NATO leaders endorsed the idea
of combined joint task forces to facilitate the development of "separable but not separate" military
capabilities that could be used by NATO or the
WEU. This opened the possibility that European
NATO members, acting through the WEU, could
use NATO military assets for operations in which
the United States might choose not to take part.
1\'10 and a half years later, the modalities of CITFs

were worked out by NATO and the WEU when

NATO foreign ministers, at their June 1996 Berlin
meeting, agreed that NATO could supply military
forces and equipment to the WEU with the approval of the NATO Council. In practice, CJTFs
are combined national units to be used in contingency operations (notably so-called Petersberg
peacekeeping operations), inc1uding operations
with participating nations that are not members of
NATO. The forces will have at their disposal all elements needed to run land, sea, and air operations
within NATO guidelines and with NATO support.
See also NORTH ATLANTIC TREATY ORGANIZATION; WESTERN EUROPEAN UNION.

COMECON
See

COUNCIL FOR MUTUAL EcONOMIC ASSISTANCE.

COMETT
See

COMMUNITY ACTION PROGRAM IN EnUCATION

AND TRAINING FOR TECHNOLOGY.

Comltology
The bulk of decisions taken in the EU are administrative rather than political or legislative in nature.
The Commission supposedly has responsibility for
these administrative decisions, which are necessary to implement policies in such areas as agriculture, fisheries, trade, competition, and structural
development. But jealous of their national prerogatives, and fearful that the Commission rnight try to
alter policy while implementing it, member states
have set up a cumbersome comrnittee systemknown as cornitology-to oversee the execution of
EU policies. There are three types of committee:
advisory, management, and regulatory. The Commission's powers are strongest under the advisory
committee procedure (advisory committees have
no formal power to prevent the Commission from
acting as it wishes) and weakest under the management and regulatory procedures (Commission actions require the support of these committees,
which can act by qualified majority vote). There
have been frequent disagreements among the
Council, the Commission, and the European Parliament (EP) as to which committee procedure
should apply when delegation powers are granted.
The EP is increasingly hostile to the entire cornitology system, which exc1udes the EP even when it

Commission

is involved as an equal partner with the Council in

the adoption of the relevant primary legislation under the co-decision procedure.
See also COMMISSION; DECISIONMAKING PRoCEDURES.

Commlsslon
The ambiguous nature of the Cornrnission epitomizes the ambiguous nature of the EU itself. Neither an executive nor a legislature, the Cornrnission combines certain elements of both. Not
merely a European bureaucracy, the Cornrnission
is a highly political animal. Supposedly independent of national governrnents, the Cornrnission is
susceptible to member-state pressure. Sensitive to
the EU's democratic deficit, the Cornrnission is
unelected and barely accountable to the European
Parliament (EP).
The Cornrnission consists of the college of
cornrnissioners and a (mostly) career civil service
(Eurocracy). The Cornrnission's formal role-initiator of legislation, guardian of the treaties, manager of the budget, executor of Cornrnunity activities-puts it at the center of the EU policy
process. Although largely excluded from the EU's
two intergovernrnental pillars-the Cornrnon Foreign and Security Policy (CFSP) and Cooperation
on Justice and Horne Affairs (JHA)-the Commission is central to the EU's functioning and effectiveness. Moreover, as the unofficial "motor"
of European integration, the Cornrnission makes a
vital political contribution to the EU's development, a contribution personified by the Cornrnission president.
The President
The Cornrnission-in the sense of the college of
commissioners-is supposed to be collegiate.
Table 1

57

However, as "first among equals," a position enhanced in the Amsterdam Treaty, the Cornrnission
president sets the tone for the Cornrnission's term
in office. (See Table 1.) Not surprisingly, Commissions are generally known by the president's
name. Since 1995, people have routinely spoken
of "the Santer Cornrnission."
Jacques Santer is widely regarded as a competent but unassertive president, and the Santer
Cornrnission is similarly viewed as politically restrained. To a great extent, this demeanor of Santer and the Cornrnission is a deli berate response to
the Cornrnission's unpopularity in the wake of the
Treaty on European Union (TEU) ratification debacle and to the Cornrnission's leadership under
the ambitious and thrusting Jacques Delors, Santer's predecessor and the Cornrnission's most successful president to date. Delors's leadership illustrates both the potential and the pitfalls for the
Cornrnission of a strong president as well as the
importance of a favorable political and economic
climate for the Cornrnission's success.
Delors had a profound impact on the office he
held for a quarter of the Cornrnunity's historylonger than any of his predecessors. When he became president, Delors fit the profile of previous
incumbents: all were male, late middle-aged, and
thoroughly irnrnersed in their own countries' political processes. But Delors brought special attributes and skills to the job: he was an experienced
and able administrator, had shrewd political judgment and a firm grasp of economics, and was an
inspiring speaker. Also, Delors envisioned a
strong, politically and economically united EC,
organized on federal lines, comprising a cohesive
"social space" and capable of asserting itself internationally. Delors had other advantages that he exploited to the full, notably a formidable reputation
as a powerful politician with a future in French na-

Commlsslon Presldents, 1958-2000

Years

1958-1967
1967-1970
1970-1972
(March 1972lan. 1973
1973-1977
1977-1981
1981-1985
1985-1995
1995-2000

Name

Member State

Highest Position Held in National Government

Walter Hallstein
JeanRey
Franco Malfatti
Sicco Mansholt

Germany
Belgium
Italy
The Netherlands

State secretary, German Foreign Office

Minister of economic affairs
Minister for posts and telecommunications
Minister of agriculture

Franc;ois-Xavier Ortoli
Roy lenkins
Gaston Thorn
Jacques Delors
Jacques Santer

France
Uni ted Kingdom
Luxembourg
France
Luxembourg

Minister of finance
Chancellor of the exchequer
Prime minister
Minister for the economy, finance, and budget
Prime minister

58

Commission

tional politics and elose friendships with a number

of key Community leaders, especially German
chancellor Helmut Kohl. Indeed, the prospect of a
post-Commission career as prime minister or
president of France, one of the two most important
member states, enhanced Delors's stature immeasurably.
Building on such asolid foundation and with
the support of a cabinet (private office) consisting
of extremely capable and dynamic people, Delors
contributed enormously to the Commission's and
the Community's transformation in the late 1980s.
Without a revitalized Commission, Delors believed, the Community would remain moribund.
Without doubt, the EC's achievements at that
time-the breakthrough on Iberian enlargement,
negotiation of the Single European Act (SEA),
agreement on the Delors I budgetary package, the
success of the single market pro gram, and the
launch of Economic and Monetary Union
(EMU)-owed much to Delors's personal and the
Commission's politicalleadership.
The Commission presidency gained in profile
and status through Delors's involvement in the
European Council and by his ability to use summit
deelarations as a mandate for much of the Commission's policy entrepreneurship. Similarly, Delors used his prominence at European Councils
and his reputation as architect of the single market
program to assert the Commission's identity on
the broader international stage. It was appropriate
that the Commission received its greatest international recognition at the G7 summit in Paris in
July 1989, when U.S. president George Bush requested it to lead the Western aid effort for Hungary and Poland. The Transatlantic Deelaration of
November 1990, which institutionalized meetings
between the U.S. president, the president of the
Council, and the Commission president, was a
further tribute to Delors's and the Commission's
growing international stature.
Delors's achievements proved the point that a
Commission president's performance depends not
so much on the attributes of the office itself but on
his personality, country of origin, national political experience and prospects, economic and political circumstances at any particular time, and the
caliber of his elosest advisers. By the same token,
Delors's and the Commission's rapid fall from
grace in the early 1990s during the intergovernmental conferences (lGCs) and the TEU ratification crisis showed the Commission's vulnerability

to the dangerous combination of an overbearing

president and an unfavorable political and economic elimate.
As a result, by 1994 (his last year in office),
Delors was generally perceived as a liability rather
than an asset, and the Commission's fortunes had
plummeted. The same presidential qualities and
characteristics that had advanced the Commission's interests so rapidly at a time of economic
and political buoyancy proved damaging at a time
of economic and political crisis. By contrast, Santer's personal and political style was more appropriate for the Commission's and the EU's circumstances in the mid-1990s. Like Delors, Santer was
a Eurofederalist; unlike Delors, he was accommodating, relaxed, and seemingly unambitious.
Equally important, Santer was a consolidator and
a conciliator, skills he sorely needed in his dealings with the "barons" who remained in his Commission from Delors's days and with some of the
ex-ministers (ineluding ex-prime ministers) who
were new to it.
In general, Santer succeeded in replacing the
Commission's image of ambition and intrusiveness, personified by Delors, with that of discretion
and pragmatism. By sticking to first principles
while eschewing the political limelight, Santer
gradually rebuilt the Commission's credibility,
confidence, and authority. Although criticized for
timidity and lack of vision, Santer's presidential
style was ideal for the chastened Commission of
the mid-1990s.
Clearly, presidential authority derives more
from the qualities and characteristics of a particular incumbent, and depends more on prevailing
political and economic circumstances, than it derives from the attributes of the office itself. Thus,
institutionally, the Commission president is in
danger of being eclipsed by an increasingly assertive EP president, and especially by the Couneil secretary-general who, under the terms of the
Amsterdam Treaty, "shall exercise the functions
of High Representative for the common foreign
and security policy." Also, the Council secretarygeneral, the Commission president (or a senior
commissioner), and the Council president will
form the EU's reconstituted troika for the conduct
of external political relations.
At the same time, the Amsterdam Treaty also
tries to beef up the Commission presidency by asserting that the Commission "shall work under the
political guidance of its President" and that the

Commission

heads of state and government "shall, by common

accord with the nominee for [Commission] President, nominate the other persons whom they intend to appoint as Members of the Commission."
Moreover, in a declaration attached to the treaty,
the member states agree that the Commission
president "must enjoy broad discretion in the allocation of tasks within the college, as well as in any
reshuffling of those tasks during a Commission's
term in office." It remains to be seen, however,
how these proposed institutional improvements in
the Commission presidency will square with personal and political realities.
The College of Commissioners
The commissioners-nominated by the member
states, appointed by the European Council, approved by the EP, and sworn in by the European
Court of Justice (ECJ}-are a college of supposed
equals. To the extent that it exists, collegiality
serves to point commissioners away from a nationalist and toward a supranationalist perspective
on the EU's development. But in reality commissioners are far from equal, nor are they entirely independent of national influence. The way that
commissioners are popularly known-by their
country of origin-emphasizes the point.
Member states generally announce their
choice of new commissioners in the months before the old Commission's term expires. Governments have complete discretion in choosing commissioners "on the grounds of their general
competence" (Article 157.1), although, as noted
above, the Amsterdam Treaty gives the Commission president a say in the selection of his colleagues. Traditionally, large member states nominate two commissioners and small member states
nominate one each. Accordingly, over the years
the number of commissioners, grew (from 9, to
13, to 14, to 17, to 20) as the number of member
states grew (from 6, to 9, to 10, to 12, to 15).
The growing number of commissioners, and
the relative decline in the number of important
portfolios, became a contentious issue at the
1996-1997 IGC, where the question of the Commission's size took up a lot of time and energy.
Despite dire warnings about the unmanageableness of a college of more than the existing number
of commissioners (or even with the existing number of commissioners) and imaginative ideas to
limit the college to ten or twelve members, governments were reluctant to surrender their right to

59

appoint one commissioner each. Confident that

they would not be asked to make such a sacrifice,
large member states were generally silent on the
issue. By contrast, some sm all member states
stated unequivocally that they would not forego
"their" commissioner. The issue came to a head at
the Amsterdam summit on June 16 and 17, 1997,
where the IGC was concluded and agreement
reached on the Amsterdam Treaty. In a legally
binding protocol on enlargement attached to the
treaty, member states declared that at the time of
the next enlargement, the Commission "shall
comprise one national" of each member state, provided that the weighting of Council votes has been
remodified by then in a way that compensates
those countries "which give up the possibility of
nominating a second member of the Commission." In other words, in return for abandoning the
current practice of nominating a second commissioner, large member states will get more votes in
the Council.
Thus radical reform of the Commission's size
proved politically impossible at the IGC; arguably,
radical reform was not necessarily in the EU's interest. It is perhaps more important for the member states, their citizens, and the Commis si on to
have direct, high-level channels of communication
via "national" commissioners than to go through
the politically painful and essentially unrewarding
exercise of drastically reducing the Commission's
size. (See Table 2.) In the event, even with one
commissioner per member state (large or small) in
an EU of twenty member states (e.g., the existing
members plus Poland, Hungary, the Czech Republic, Estonia, and Slovenia), the Commission
would have twenty members-only three more
than in Delors's highly successful first Commission, following Spain's and Portugal's accession
(1986-1989). Even with more than twenty members, the Commission could function much as it
now does, with a group of undeclared but easily
identifiable "core" commissioners, supported by
strong cabinets, setting the Commission's agenda
and launching major initiatives. However, the
treaty protocol on enlargement also declares that
at least one year before the EU enlarges beyond
twenty member states, another IGC "shall be convened in order to carry out a comprehensive review of the provisions of the Treaties on the composition and functioning of the institutions." By
implication, the Commission's size will be limited
to twenty, and the political dog fight over which

60

Commission

Table 2
Dates

1967-1972
1973-1980
1981-1985
1986-1994
1995-2000

Dates

1967-1972
1973-1980
1981-1985
1986-1994
1995-2000

Commlssloners per Member State, 1967-2000

Member
States Comrnissioners

6
9

10

12
15

9
13
14
17

20

Member
States Comrnissioners

6
9

10

12
15

France

Germany

ltaly

2
2
2
2
2

2
2
2
2
2

2
2
2
2
2

Denmark

Ireland

Belgium

Greece

Netherlands

United
Luxembourg Kingdom

2
2
2
2

Spain Portugal

Austria

Finland Sweden

9
13

14

17

20

countries might not be able to nominate a commissioner has been deferred to another day.
In contrast to the Community's early history,
most commissioners are now career politicians
whose political standing at horne helps to enhance
their status and performance in the Commis sion.
Yet hailing from a large country and having a formidable political reputation are not preconditions
for success in the Commission. Commissioners
may be reappointed any number of times and must
not step down if their political patrons at horne resign from government or lose an election.
By a two-thirds majority, the EP may sack
the entire Commission-one of the least likely
things ever to happen in the EU-but may not
dismiss individual commissioners. Under the
TEU the Commission's term of office was increased to five years, beginning in January 1995,
bringing it into line with the EP's five-year term.
The TEU also stipulates that a new Commission
"shall be subject as a body to a vote of approval
by the European Parliament." This procedure was
used for the first time in January 1995 to approve
the new Santer Commission, and the EP also held
committee hearings for individual commissioners-designate.
Parliament has no authority to decide which
commissioner gets what portfolio. Those important decisions remain with the Commission president and, especially, national leaders. Indeed, the
fierceness with which governments fight for portfolios suggests that the Commission is not "completely independent in the performance of [its] duties," as the treaty claims that it should be, or as
commissioners swear before the ECJ that they will

2
2

be. Personal and political considerations rather

than ability or merit determine who gets the prestigious and powerful commission appointments,
such as external relations, competition policy, agriculture, and the environment. (See Table 3.)
The way in which Santer's commissioners received their portfolios in 1995 is instructive. During his visits to member state capitals before assigning portfolios, Santer made the statements
expected of a president-designate about imperviousness to nationallobbying. In the event, he allocated portfolios according to most member states'
wishes. However, his subsequent grouping of
portfolios along thematic lines and, in the most
sensitive areas, under his direct responsibility was
an effective way to improve coordination, communication, and collegiality in the Commis si on,
while blunting the unilateralist tendencies of some
of his high-profile colleagues.
The allocation of portfolios contributes to a
perception that commissioners are in their national governments' pockets. Indeed, commissioners who aspire to high political office after their
time in Brussels are especially susceptible to domestic concerns. Journalists and politicians frequently accused Delors of undue sensitivity to
French national interests. Especially in the field of
competition and industrial policy, notoriously
touchy issues in France, Delors seemed inordinately partisan. But there is an important distinction between recognizing and upholding a national interest and taking instructions from a
national government. The Commission functions
best when commissioners thrash out proposals
from their own ideologieal, political, and national

Commission
Table 3

61

Commlssloners and Thelr Portfollos, 1958-2000

Commissioner

Country of Origin

Portfolio

January 1958--January 1963

Walter Hallstein
Germany
President
Sicco Mansholt
Netherlands
Vice President, Agriculture
Robert MlIIjolin
France
Vice President, Economic Affairs
Piero Malvestiti
ltaly
Transport
(Resigned October 1959; replaced by Giuseppe Caron December 1959.)
lean Rey
Belgium
Trade Policy
Hans von der Groeben
Germany
Competition Policy
Lambert Schaus
Luxembourg
Internal Market
Guiseppe Petrilli
Ital y
Social Affairs
Robert Lemaignen
France
Overseas Countries and Territories
(Resigned September 1960; replaced by Henri Rochereau lanuary 1962.)
January 1963-July 1967
Walter Hallstein
Germany
Sicco Mansholt
Netherlands
Robert MlIIjolin
France
Lionello Levi Sandri
ltaly
lean Rey
Belgium
Hans von der Groeben
Germany
Lambert Schaus
Luxembourg
Henri Rochereau
France
Giuseppe Caron
Italy
(Resigned May 1963; replaced by Guido Colonna di

President
Vice President, Agriculture
Vice President, Economic Affairs
Vice President, Social Affairs
External Relations
Competition Policy
Transport
Overseas Countries and Territories
Internal Market
Paliano.)

July 1967-January 1970

Jean Rey
Sicco Mansholt
Lionello Levi Sandri
Fritz Hellwig
Raymond Barre
Albert Coppe
Hans von der Groeben
Emanuel Sassen
Henri Rochereau
Guido Colonna di Paliano
Victor Bodson
Edoardo Martino
Wilhelm Haferkamp
lean-Fran~ois Deniau

President
Vice President, Agriculture
Vice President, Social Affairs
Vice President, Research and Technology
Economic and Financial Affairs
Budget, Information Service
Internal Market
Competition Policy
Development Aid
Industrial Affairs
Transport
External Relations
Energy
External Trade, Financial Control

Belgium
Netherlands
ltaly
Germany
France
Belgium
Germany
Netherlands
France
Italy
Luxembourg
Italy
Germany
France

January 1970-January 1973

Franco Malfani
Italy
President
(Resigned March 1972; replaced by Sicco Mansholt.)
Sicco Mansholt
Netherlands
Vice President, Agriculture
(Replaced as agriculture commissioner by Scarascia Mugnozza, March 1972-lanuary 1973.)
Raymond Barre
France
Vice President, Economic and Financial Affairs
Vice President, Internal Market and Energy
Wilhelm Haferkamp
Germany
Be1gium
Social Affairs, Transport, Budget, and Financial Contro1
Albert Coppe
lean-Fran~ois Deniau
France
Enlargement and Development Aid
Altiero Spinelli
Italy
Industrial Affairs, Research and Technology
Albert Borschette
Luxembourg
Competition
Ralf Daluendorf
Germany
External Relations
January 1973-January 1977
Fran~ois-Xavier Ortoli
Wilhelm Haferkamp
Carlo Scarascia Mugnozza

France
Germany
Italy

President
Vice President, Economic and Financial Affairs
Vice President, Relations with the European Parliament, Environment, Transport
Sir Christopher Soames
UK
Vice President, External Relations
Patrick Hillery
Ireland
Vice President, Social Affairs
(Resigned December 1976; portfolio managed by Raymond Voue!.)
(continues)

62

Commission

Table 3

contlnued

Commissioner

Country of Origin

Portfolio

Henri Simonet
Belgium
Financial Institutions and Taxes, Energy
Jean-Fran<rois Deniau
France
Development Aid, Budget, Financial Control
(Resigned April 1973; replaced by Claude Cheysson.)
Altiero Spinelli
Italy
Industrial and Technological Affairs
(Resigned July 1976; replaced by Cesidio Guazzaroni.)
Albert Borschette
Luxembourg
Competition
(Retired July 1976; replaced by Raymond Voue!.)
Ralf Dahrendorf
Germany
Research, Science and Education
(Resigned November 1974; replaced by Guido Brunner.)
George Thomson
UK
Regional Policy
Petros Josephus Lardinois
Netherlands
Agriculture
Finn Olav Gundelach
Denmark
Internal Market
January 1977-January 1981
Roy Jenkins
Fran<rois-Xavier Ortoli
Wilhelm Haferkamp
Finn Olav Gundelach
Lorenzo Nata1i
Hank Vredeling
Claude Cheysson
Guido Brunner
Raymond Vouel
Antonio Giolitti
Richard Burke
Etienne Davignon
Christopher Tugendhat

UK
France
Germany
Denmark
Italy
Netherlands
France
Italy
Luxembourg
Italy
Ireland
France
UK

President
Vice President, Econornic and Financial Affairs
Vice President, External Relations
Vice President, Agriculture and Fisheries
Vice President, Enlargement, Environment
Vice President, Employment and Social Affairs
Development
Energy, Research, Science and Education
Competition
Regional Policy
Taxation, Consumer Affairs, Transport, Relations with Parliament
Internal Market, Industrial Affairs
Budget and Financial Control

January 1981-January 1985

Gaston Thorn
Luxembourg
President
Etienne Davignon
Belgium
Vice President, Industrial Affairs, Energy
Wilhelrn Haferkamp
Germany
Vice President, External Relations
Vice President, Mediterranean Policy, Enlargement
Lorenzo Nata1i
Italy
Fran<rois-Xavier Ortoli
France
Vice President, Economic and Financial Affairs
Vice President, Budget and Financial Control
Christopher Tugendhat
UK
Regional Policy
Antonio Giolitti
Italy
Transport, Fisheries, Tourlsm
Georgios Contogeorgis
Greece
Karl-Heinz NaIjes
Germany
Internal Market, Industriallnnovation, Environment
Franz Andriessen
Netherlands
Relations with Parliament, Competition
Ivor Richard
UK
Employment and Socia! Affairs, Tripartite
MichaelO'Kennedy
Ireland
Personnel and Administration, Statistical Office
(Resigned March 1982; replaced by Richard Burke.)
Poul Dalsager
Denmark
Agriculture
(Replaced Finn Olav Gundelach, who was reappointed but died in January 1981.)
Edgard Pisani
France
Development
(Replaced Claude Cheysson; was reappointed but resigned in May 1981.)
January 1985-January 1989
Jacques Delors
Lorenzo Nata1i
Karl-Heinz NaIjes

President and Monetary Affairs

Vice President, Cooperation and Development
Vice President, Industrial Affairs, Information Technology, Research and Science
Franz Andriessen
Netherlands
Vice President, Agriculture
Vice President, Internal Market
Lord Arthur Cockfield
UK
Henning Christophersen
Denmark
Vice President, Budget, Financial Control
Vice President, Social Affairs and Employment, Education and
Manuel Marin
Spain
Training
Claude Cheysson
France
Mediterranean Policy, North-South Relations
Alois Pfeiffer
Germany
Economic Affairs, Regional Policy
(Died August 1987; replaced by Peter Schmidhuber in September 1987.)
Greece
Coordination of Structural Funds, Consumer Protection
Grigoris Varfis
Willy De Clercq
Belgium
External Relations and Trade Policy
(continues)
France
Italy
Germany

Commission
Table 3

63

contlnued

Commissioner

Country of Origin

Portfolio

Nicolas Mosar
Stan1ey Clinton Davis
Carlo Ripa di Meana
Peter Sutherland
Antonio Cardoso e Cunha
Abel Matutes

Luxembourg
UK
Italy
Ireland
Portugal
Spain

Energy
Environment, Transport
Institutional Questions, People's Europe
Relations with Parliament, Competition
Fisheries
Investments and Financial Instruments, Small Business

January 1989-January 1993

J acques Delors
Franz Andriessen
Martin Bangemann

France
Netherlands
Germany

Sir Leon Brittan

Henning Christophersen
Manuel Marin
Filippo Maria Pandolfi

UK
Denmark
Spain
Italy

Carlo Ripa di Meana

Antonio Cardoso e Cunha
Abel Matutes

Italy
Portugal
Spain

Peter Schmidhuber
Christine Scrivener
Bruce Millan
John Dondelinger
Ray MacSharry
Karel Van Miert
Vasso Papandreou

Germany
France
UK
Luxembourg
Ireland
Belgium
Greece

President, Monetary Affairs

Vice President, External Relations and Trade Policy
Vice President, Internal Market and Industrial Affairs, Relations
with Parliament
Vice President, Competition, Financial Institutions
Vice President, Economic and Financial Affairs, Structural Funds
Vice President, Cooperation and Development, Fisheries
Vice President, Science, Research and Development, Telecommunications, Information Technology
Environment
PersonneI, Energy
Mediterranean Policy, Relations with Latin America, North-South
Relations
Budget, Financial Control
Taxation
Regional Policy
Audiovisual and Cultural Affairs
Agriculture and Rural Development
Transport, Credit and Investments, Consumer Interests
Employment, Industrial Relations and Social Affairs, Education
and Training

January 1993-January 1995

Jacques Delors
Manuel Marin

France
Spain

January 1995-January 2000

Jacques Santer
Sir Leon Brittan

Luxembourg
UK

Manuel Marin

Spain

President, Monetary Affairs

Vice President, Cooperation and Development, European Community Humanitarian Office
Henning Christophersen
Denmark
Vice President, Economic and Financial Affairs, Monetary Affairs
Martin Bangemann
Germany
Vice President, Industrial Affairs, Telecommunications
Sir Leon Brittan
UK
Vice President, External Economic Affairs, Commercial Policy
Karel Van Miert
Belgium
Vice President, Competition, Personnel and Administration
Antonio Ruberti
Italy
Vice President, Science, Research and Development
Abel Matutes
Spain
Energy, Transport
(Resigned in April 1994; replaced by Marcelino Oreja.)
Peter Schmidhuber
Germany
Budget, Financial Control, Cohesion Fund
Christiane Schrivener
France
Customs, Taxation, Consumer Policy
Bruce Millan
UK
Regional Policy, Relations with the Committee of the Regions
Hans van den Broek
Netherlands
External Political Relations, Common Foreign and Security Policy, Enlargement
Joo de Deus Pinheiro
Relations with the Parliament, Culture and Audiovisual
Portugal
Padraig Flynn
Social Affairs and Employment
Ireland
Rene Steichen
Agriculture and Rural Development
Luxembourg
Iannis Paleokrassas
Environment, Nuclear Safety, Fisheries
Greece
Raniero Vanni d' Archirafi
Institutional Questions, Internal Market
Italy
President
Vice President, External Relations with North America, Austra1ia,
New Zealand, Japan, China, Korea, Hong Kong, Macao, and Taiwan, Common Commercial Policy, Relations with the Organization for Economic Cooperation and Development and World Trade
Organization
Vice President, External Relations with Southern Mediterranean
Countries, the Middle East, Latin America and Asia (except Japan,
China, Korea, Hong Kong, Macao, and Taiwan)
(continues)

64

Commission

Table 3

contlnued

Commissioner

Country of Origin

Portfolio

Martin Bangemann

Germany

Karel Van Miert

Hans Yen Den Broek

Belgium
Netherlands

Joao de Deus Pinheiro

Portugal

Padraig Flynn
Marcelino Oreja

Ireland
Spain

Anita Gradin

Sweden

Edith Cresson

France

Ritt Bjerregaard
Monika Wulf-Mathies

Denmark
Germany

Neil Kinnock
MarioMonti
Franz Fischler
EmmaBonino

UK
Italy
Austria
Italy

Yves-Thibault de Silguy
Erriki Liikanen
Christos Papoutsis

France
Finland
Greece

Industrial Mairs, Information and Telecommunications Technologies

Competition
Relations with the Countries of Central and Eastern Europe, the
former Soviet Union, Mongolia, Turkey, Cyprus, Malta, and other
European Countries
Relations with African, Caribbean, and Pacific countries and
South Africa
Employment and Social Mairs
Relations with the European Parliament, Relations with the Member States, Culture and Audiovisual Policy, the intergovernmental
conference
Immigration, Justice and Horne Affairs, Financial Control, Fraud
Prevention
Science, Research and Development, Education, Training, and
Youth
Environment, Nuc1ear Safety
Regional Policy, Relations with the Committee of the Regions,
Cohesion Fund
Transport (inc1uding Trans-European Networks)
Internal Market, Financial Services, Customs, Taxation
Agriculture and Rural Development
Fisheries, Consumer Policy, European Community Humanitarian
Office
Economic and Financial Affairs, Monetary Policy
Budget, Personnel and Administration, Translation
Energy, Small Business, Tourism

perspectives as weH as on the abstract basis of

what is best for the EU.
Commissioners often use their cabinets to absorb excessive national pressure and conduct a
public relations campaign for domestic consumption. The cabinet system reflects a strong French
influence on the EU's administrative apparatus.
Over the years, cabinets have grown larger and
more powerful. Most commissioners have a
seven-member cabinet, including career Eurocrats
and appointees who came to Brussels with the
commissioner. A good cabinet can boost the
standing of an otherwise poor commissioner, and
a poor cabinet can puH down an otherwise good
commissioner. It is no coincidence that the most
effective commissioners have the best-staffed and
best-organized cabinets.
Comrnissioners meet every Wednesday in
Brussels, or in Strasbourg if the EP is in plenary
session there, to discuss and resolve various initiatives and proposals to go before the Council. Generally the president has his way, although Commission meetings sometimes become bruising battles
whose outcome is unpredictable. The most notable
struggles are over the common commercial policy,
competition policy, and agriculture (areas in which

the Comrnission has considerable authority). A

simple majority vote may finaHy decide an issue.
The Eurocracy
The Commission's civil service-approximately 17,000 employees, including 3,200 personnel at the Joint Research Centers and 3,000 interpreters and translators-is surprisingly smaH.
Apart from the research centers, the Eurocracy is
organized into twenty-four directorates-general
(DGs) and a smaH number of other units (services), corresponding to the Commission's activities and responsibilities. (See Table 4.) Neither the
number nor the responsibilities of the DGs correspond to the number or the portfolios of the comrnissioners. Thus a commissioner may have more
than one DG in his portfolio, and the responsibilities of a DG may be spread over the portfolios of
more than one commissioner. Conversely, a comrnissioner may not have a DG at an. As weH as the
DGs, the Commission includes a number of other
services, such as the legal service and spokesman's
service, and various task forces. The Commission's secretariat-general is aseparate unit.
The Commission is also surprisingly spread
out. A majority of its officials work in Brussels,

Commission

but some are based in Luxembourg. In Brussels

itself, the Commission is dispersed in scores of
buildings rented from or through the Belgian
government. The commissioners, their cabinets,
and the secretariat-general are lodged in the
Breydel building, pending refurbishment of the
Berlaymont, the Commission's permanent headquarters.
The Commission recruits through a highly
competitive, ED-wide selection process (the concours) for university graduates. Many of the successful candidates may already have gained experience in the Commission as stagiaires, or paid
interns. Based on previous experience or personal
predilection, a new recruit may ask to work in a
particular DG or service but is unlikely to get the
assignment of his or her choice. Promotion
through the junior and mid-career grades is generally predictable and uncontroversial and is based
largely on seniority. However, entry into the senior
grades-A3 and above-is highly politicized and
extremely difficult. Not only is the number of jobs
available smaller than at lower levels, but national
civil servants and others who "parachute" into the
senior ranks of the Commission, for instance as
part of a commissioner's cabinet, reduce the availability of senior jobs for career Eurocrats. Despite
an ECJ ruling in March 1993 that the Commission
was breaking EC rules by using national quotas
rather than merit to recruit high-ranking officials,
an unofficial national quota system still applies at
the higher levels.
The difficulty of progressing beyond A4 engenders a lot of frustration and resentment in the
mid-career level of the Commission. The president's inability to get rid of poor performers, and
the stranglehold that national governments have
on certain senior positions, expose some of the
Commission's serious administrative weaknesses.
The Spierenburg Report on Commission reform
pointed out these problems as early as 1979, but
most of its recommendations were never implemented (Spierenburg, 1979).
The preoccupation with national prerogatives
that stymies promotion also prevents mobility in
the Commission. Commissioners and directorsgeneral clung to existing staff levels even as the
Commission's priorities shifted dramatically in
the late 1980s. Thus, although the Commission itself is far from overstaffed, certain parts of it have
become bloated while others remain seriously understaffed. Nor will the member states sanction a

65

sizable increase in the civil service, especially in

the aftermath of the TED crisis.
Delors' s appointment as president in 1985
raised the Commission's morale, as did the SEA
and the launch of the single market program. Yet
by the end of the decade Eurocrats identified Delors hirnself as part of the Commission's problem.
Delors's disregard for fellow commissioners, disdain for many directors-general, and aggrandizement of power in his cabinet fueled resentment
and backbiting. With the unexpected rise in the
Commission's responsibilities in 1989 and 1990
and no commensurate increase in its size or efficiency, many officials feared that the institution
would self-destruct.
. In order to restore the Commission's morale
and credibility in the post-Delors period, Santer
made a concerted effort to put the Commission's
house in order. He discovered, however, that structural and managerial problems are rooted in the
member states' determination to retain as much influence as possible over the Commission and have
been compounded by successive enlargements,
the proliferation of portfolios, and the excessive
power of the cabinets. Staff policy remains underused as a powerful instrument of internal reform,
new management techniques have rarely been introduced, and the decentralization procedures
adopted under Santer have had only mixed results.
The Commission 's Rofe and Responsibilities
Proposing fegislation. It is an old axiom that
"the Commission proposes and the Council disposes." The Comrnission still proposes (at least in
Pillar One of the EU), but in many cases (under the
co-decision procedure) the Council and the EP
jointly dispose. Most of the Comrnission's proposals have a clear legal base in the treaties or in
amendments to the treaties. Others may flow from
legislation already adopted under the treaties or
from a judgement of the ECJ. Member states
sometimes dispute the legal base of a Comrnission
proposal either because of a genuine difference of
interpretation or for political reasons: they may not
want the EU to involve itself in certain matters or
may not want a legal base that involves qualified
majority voting in the Council or the cooperation
and co-decision procedures in the EP. In the postTED period, some member states have invoked
subsidiarity both to prevent action at the EU level
and to delay implementation of EU legislation at
the national level. Indeed, the Commission itself

66

Commission

Table 4
DGI
DGIA
DGffi
DGll
DGID
DGIV
DGV
DGVI
DGVll
DGVID
DGIX
DGX
DGXI
DGXII
DGXID
DGXIV
DGXV
DGXVI
DGXVII
DGXVID
DGXIX
DGXX
DGXXI
DGXXII
DGXXID
DGXXIV

Commlsslon Dlrectorates-General and Services, 1995-2000

External Relations: Commercial Policy and Relations with North Arnerica, the Far East, Australia, and
New Zealand
External Relations: Europe and New Independent States, External Policy and Common Security
External Relations: Southern Mediterranean, Middle and Near East, Latin Arnerica, South and Southeast
Asia and North-South Cooperation
Economic and Social Affairs
Industry
Competition
Employment, Industrial Relations and Social Affairs
Agriculture
Transport
Development
Personnel and Administration
Information, Communication, Culture, and Audiovisual
Environment, Nuc1ear Safety and Civil Protection
Science, Research, and Development-Joint Research Center
Telecommunications, Information Market and Exploitation of Research
Fisheries
Internal Market and Financial Services
Regional Policies and Cohesion
Energy
Credit and Investments
Budgets
Financial Control
Customs Union and Indirect Taxation
Education, Training, and Youth
Enterprise Policy, Distributive Trades, Tourism and Cooperatives
Consumer Policy

Services

Secretariat-General ofthe Commission

Forward Studies Unit
Inspectorate-General
Spokesman's Service
Joint Interpreting and Conference Service
Statistical Office
Translation Service
Informatics Directorate
Security Office
European Community Humanitarian Office

has generally cut back on legislative initiatives in

accordance with the principle of subsidiarity and in
view of the prevailing political clirnate.
The Comrnission has an alrnost exclusive and
jealously guarded right to propose legislation, although both the Council and the EP may request
the Comrnission to submit a proposal (the Comrnission has a shared right of initiative in the CFSP,
which is an intergovernmental rather than a supranational undertaking). Apart from the Council's and
EP's formal right to ask the Comrnission to initiate
legislation, proposals may originate in any number
of ways: a zealous Comrnission president, comrnissioner, director-general, or other official could ask
his or her subordinates to prepare legislation; or the
proposal could come in response to the suggestion
of a member state or an interest group.

In 1988, after the launch of the single market

pro gram and implementation of the SEA, the
Comrnission set out to develop an annual legislative program with the EP. In 1991 a representative
of the Council presidency for the first time attended the Comrnission-Parliament discussions to
agree on a legislative prograrn. The three institutions concur on the importance of legislative programrning in order to make the EU's decisionmaking procedures more effective and thereby
improve the EU's public image.
Ideally, the college should discuss and approve all proposals before formally subrnitting
them to the Council. But the sheer volume of proposals prepared annually makes that impossible. To
expedite the process and reduce the comrnissioners' work loads, draft proposals that seem uncom-

Commission 67
plicated and uncontroversial are circulated among
the commissioners and, if not objected to within
one week, are adopted by default. Alternatively, a
subgroup of commissioners may agree to deal with
routine proposals on behalf of their colleagues. Either way, the cabinets playa decisive role.
Executing policy. In order to implement EU
policy (exeluding the CFSP and JHA), the Commission issues approximately five thousand directives, regulations, and decisions annually. The increasing impact of such acts on everyday life in
the EU is a major reason for growing public hostility toward the Brussels bureaucracy. Yet few
people realize that the Commission lacks a free
hand in implementing EU policy. Jealous of their
national prerogatives, from the outset member
states devised a complicated committee system,
called comitology, to constrain the Commission's
exercise of implementing powers. Accordingly,
the Commission implements EU legislation
mostly through three types of committees-advisory, management and regulatory-all chaired by
Commission officials but made up of national civil
servants. Advisory committees merely counsel the
Commission on rule making, but management and
regulatory committees can send proposed implementing measures to the Council for review. In a
deelaration attached to the Amsterdam Treaty, the
member states called on the Commission to submit a proposal to the Council by the end of 1998
to change these procedures for the exercise of its
implementing powers.
Managing the budget. Each year, the Commission submits a preliminary draft budget to the
Council and the EP, the two arms of the Community's budgetary authority. Since the Delors I
agreement of 1988, the Commission submits its
annual draft budget in the context of a five-year
forecast. The Commission has some obligations
on the revenue side, but its responsibilities lie primarilyon the expenditure side. These inelude administering appropriations for the guarantee section of the European Agricultural Guidance and
Guarantee Fund (the main mechanism for financing the Common Agricultural Policy-CAP,
which still accounts for approximately 50 percent
of total EU expenditure) and the structural funds
(made up of the European Social Fund, the guidance section of the European Agricultural Guidance and Guarantee Fund, and the European Regional Development Fund), which account for
approximately 25 percent of total expenditure.

Also since 1990 the Commission has had to manage large-scale financial appropriations made as a
result of the EU's increasing external policy responsibilities, for instance, assistance for the former Yugoslav republics and the former Soviet republics and emergency humanitarian assistance.
Conducting external relations. The Commission is an international actor whose stature has
increased dramatically since the revolution in
Eastern Europe in 1989. Most third countries and
international organizations have diplomatic relations with the EU, and the Commission maintains
over one hundred delegations and offices throughout the world. Yet the Commission does not have a
foreign ministry or a foreign service (DG I-external political relations--comes elose, but Commission officials abroad are drawn from other
DGs also).
Because it is less directly involved in the
CFSP, the Commission focuses its external relations activities mostly on trade and aid. Artiele
113 of the Rome treaty authorizes the Commission to conduct the EU's international trade negotiations, but member states keep a elose eye on its
behavior. The so-called 113 Committee of national civil servants meets regularly with Commission officials to approve the Commission's negotiating strategy and proposals, and the Council
endorses the final agreement. In addition to liaising internationally for the EU and negotiating
trade agreements, the Commission negotiates association agreements with third countries and
plays an important part in the process of EU enlargement.
Guarding the treaties. Under Artiele 169 of
the Rome treaty, the Commission may bring a
member state before the ECJ for alleged nonfulfillment of treaty obligations. Member states frequently fail to live up to their EU commitrnents,
and the Commission occasionally institutes judicial proceedings. However, most member-state violations are due to genuine misunderstandings or
misinterpretations or to delays in transposing EU
legislation into national law. Deliberate noncompliance nonetheless exists, notably in the area of
competition policy and the internal market. For
political and public relations reasons, the member
states and the Commission are generally reluctant
to pursue cases all the way to the ECJ, and most
disputes are resolved at an early stage.
With the launch of the single market program, the Commission won some important new

68

Committee of Permanent Representatives (COREPER)

powers to enforce Community law, notably in the

area of competition policy. Under the terms of the
December 1989 Council regulation on merger
control, since September 1990 the Commission
has one month after notification of a merger covered by the regulation to begin an inquiry into the
proposed merger and, if an inquiry is begun, another four months to issue a legal decision. The
Commission depends on a Merger Task Force, 10cated in the competition poliey directorate-general, to enforce merger policy.

Conclusion
The Commission is, and always will be, "at the
heart of the Union" (Nugent, 1997). Yet developments in the early 1990s eroded the Commission's
se1f-confidence, credibility, and legitimacy. At a
time of serious economic recession and political
uncertainty, it was difficult for the Commis si on,
especially under Delors's style of leadership, to
restore its position and regain its momentum. Invidious comparisons were made between the setback to the Commission's fortunes under Hallstein in 1966 and under De10rs in 1992. But
European integration had progressed too far and
the world had changed too much for the Commission to lie dormant for another fifteen years.
Moreover, the EU's crowded agenda in the mid
and late 1990s-managing the 1995 enlargement,
preparing for the next enlargement, conducting
another IGC, launching EMU, and negotiating a
new five-year financial perspective-<:alled for
strong Commission involvement. Santer's unspectacular but concrete achievements thus far-making subsidiarity meaningful, consulting and informing as widely as possible, encouraging
deregulation and competitiveness, consolidating
the single market, promoting EMU, fighting
fraud, and putting the Commission's house in order-have helped gradually to restore the Commission's credibility, influence, and esteern.
In its far-reaching Agenda 2000 report on the
future of the EU, submitted to the Council in July
1997, the Commission called for "a thorough reevaluation of the Commission's executive and
management functions and a change of its administrative culture" (Cornmission, 1997, p. 39). The
problem of legitimacy, however, will prove less
tractable. Although the Commission is more accountable to the EP, it is only indirectly accountable to the EU's citizens. Commissioners are still
appointed, not elected, and the Eurocracy seems

as remote as ever before. The Commission's

biggest challenge, forty years after its founding, is
to win the respect, trust, and loyalty of a skeptical
EU citizenry.
See also DELORS, JACQUES; JENKINS, Roy;
SANTER, JACQUES; APPENDIX I; APPENDIX 4.

Bibliography

Commission. 1997. Agenda 2000. COM(97)2000 Final.

2 vols. Luxembourg: Office for Official Publications
of the European Communities.
Edwards, Geoffrey, and David Spence. 1994. The European Commission. Harlow: Catermill.
Grant, Charles. 1994. Delors: Inside the House that
Jacques Built. London: Nicholas Brealey.
Nugent, Neill, ed. 1997. At the Hear! oi the Union:
Studies oi the European Commission. Basingstoke:
Macmillan.
Ross, George. 1995. Jacques Delors and European Integration. Cambridge: Polity Press.
Spierenburg, Dirk. 1979. "Proposals for Reform of tbe
Commission of the European Communities and 1ts
Services." Brussels: Commission.

-Desmond Dinan

Committee of Central
Bank Govemors
The European Monetary Institute (EMI)-the
forerunner of the European Central Bank-supplanted the Committee of Central Bank Governors, a consultative body that met monthly at the
headquarters of the Bank for International Settlements in Basel, Switzerland (the only Community
organ to meet regularly in a nonmember state).
The committee played a prominent part in the
1991 intergovernmental conference on Economic
and Monetary Union (EMU) and paved the way
for stage 2 of EMU by helping to coordinate
member states' monetary policies. The governors
of the national central banks formed the Council
of the EMI, and one of them became its vice president. But, under the terms of the EMI's statute,
the council president himself was "selected from
among persons of recognized standing and professional experience in monetary or banking matters"
from outside the circle of Central Bank governors.

Committee of Permanent
Representatives (COREPER)
The Committee of Permanent Representatives,
known universally by its French acronym

Committee of Permanent Representatives (COREPER)

COREPER, is a key institution of the EU. There

are, in fact, two COREPERs: COREPER II, made
up of the permanent representatives (ambassadors) of the member states to the EU, and
COREPER I, made up of their deputies. Both play
a vital role in the decisionmaking process. Indeed,
perhaps some 80 percent or more of decisions are
now taken at the level of COREPER or below.
A committee of officials designed to assist
ministers was allowed for under the Treaty of
Rome, but COREPER as such was first referred to
only in the Merger Treaty of 1965, which brought
together the institutions of the three European
Communities. At that point COREPER was held
responsible for preparing the work of the Council
of Ministers and for carrying out specific tasks assigned to it. It was for that reason seen as a part of
the trend toward greater intergovernmentalism
epitomized by French president Charles de
GauIle's "empty chair" policy in the Council and
the subsequent Luxembourg Compromise, and
was therefore criticized by many for underrnining
the role of the Commission. At the same time,
COREPER was also criticized for underrnining
the role of ministers in the interests of further
technocratization (Spinelli, 1966). However, it
was not long before COREPER had come to be
accepted as a body that brought technical efficiency and a sense of responsibility and commitment to finding the necessary consensus among
member governments (Sasse, 1977).
COREPER achieved widespread acceptance
because of its critical position in coordinating the
decisionmaking process. COREPER sits at the
point where the horizontal and vertical dimensions of coordination meet. It has particular responsibility for coordinating across the range of
European Union activities, activities that have
continuously grown, either formally through
treaty revision or informally through more pragmatic responses to new demands and challenges.
COREPER's role has been limited only by the
role of the Special Committee for Agriculture and
the Monetary Committee, with its sectoral concerns, and by the 113 Committee, with its key role
in preparing external trade matters. But
COREPER I, which deals with more "domestic"
issues, including the budget, and COREPER 11,
which works more with foreign ministers, have
otherwise proved indispensable, not only in the
legislative process but in the wider decision-making process of the EU itself.

69

This status was indicated in the Treaty on European Union (TEU) under which, at least in part
as an attempt to improve coherence and consistency if not efficiency in decisionmaking,
COREPER's formal responsibilities were extended beyond the EC framework to include final
official responsibility for issues falling under the
second and third pillars. The second pillar, dealing
with the Common Foreign and Security Policy
(previously European Political Cooperation), had
been dealt with in the Political Committee made
up of political directors, usually top officials in
national foreign ministries. The third pillar, dealing with Cooperation on lustice and Horne Affairs, had formerly been dealt with in a wide range
of different committees such as the Trevi Group
(which dealt with terrorism and anti--drug trafficking) or the Ad-hoc Group on Immigration (which
dealt with asylum issues as weIl as immigration)
that had been brought together under the Group of
Coordinators, later known as the K.4 Committee
after the relevant provisions of the TEU. The decision to establish COREPER as primus inter pares
among the Political Committee and the KA Committee, although welcomed by some as an indication of the primacy of the "Community method,"
was regarded with suspicion by others as opening
up the Community superstructure to greater pressures from the member governments. It was also
unwelcome to both the Political Committee and
KA Committee, as was the attempt to integrate
some of their subordinate working groups. The
eventual compromise between permanent representatives and political directors (followed later
by KA coordinators) gave the final voice to
COREPER on the understanding that in normal
circumstances recommendations of the Political
Committee would not be amended.
COREPER is the meeting point of the technical and the political aspects of each proposal. It is
responsible for judging the point at which a
dossier can be finalized, needs further refinement
by national experts in the working groups, or requires a political decision by ministers. In fact,
COREPER itself is now responsible for the large
majority of all Community decisions. These are
then taken by ministers in the Council as "A"
points: that is, without further discussion. This is
possible, even necessary, because so many of the
legislative proposals put forward by the Commission are highly technical and detailed. They are
the result usually of extensive consultation on the

70

Committee of the Regions (COR)

part of the Commission with interested groups, including member governments. Once formulated,
the proposals are subject to scrutiny by the Council, in the first place by the same national officials
who had earlier proffered advice but who this time
are responsible for ensuring that the proposals are
politically as weH as technically acceptable. There
are perhaps 100 to 180 working groups: some
meet two or three times during any six-month
presidency; others with less political momentum
behind them meet perhaps only once or twice a
year (Rometsch and Wesseis, 1994). But if the
working groups can agree or are near agreement
so that COREPER can then adopt the proposal at
its weekly meetings, the proposal goes on to become an "A" point. A group of officials, the Antici
Group, under the leadership of an official representing the presidency of the Council, liaises with
the Commission and the Council secretariat, coordinates all legislative proposals, and prepares
COREPER 11 (Westlake, 1995).
Technical issues, however, have ahabit of becoming politically sensitive. It may still be pos sible for the permanent representatives or their
deputies to agree, but it may weH require further
recourse to national capitals before they do so. H
COREPER can still not reach agreement, then a
decision has to be taken on whether to send the
proposal back down to the working groups for further work by experts or to send it upward to ministers with the areas of dis agreement carefully delimited.
Given such a delicate position vis-a-vis their
national administrations, it is not surprising that
the permanent representatives frequently return
horne to capitals to discuss strategies and tactics.
It is often the case that there they become identified, some might say overidentified, with the
search for agreement. On the one hand, their constant interaction in COREPER makes them expert in what is politically possible in Brussels. On
the other hand, they often thereby appear to represent the EU in national decisionmaking and are
regarded with suspicion by other departments
and ministers as a result (Edwards, 1996). It is a
delicate balance. It is one, however, that indicates
the key role that the permanent representatives
and COREPER play in the decisionmaking
process.
See also COUNCIL OF MINISTERS; DECISIONMAKING PROCEDURES.

Bibliography
Edwards, Geoffrey. 1996. "National Sovereignty vs Integration? The Council of Ministers." In J.R.R.
Richardson, ed., European Union: Power and Policy-Making. London: Routledge.
Rometsch, Dietrich, and Wolfgang Wesseis. 1994. "The
Commission and the Council of Ministers." In Geoffrey Edwards and David Spence, The European
Commission. Harlow: Catermill.
Sasse, Christoph, et al. 1977. Decision-Making in the
European Community. New York: Praeger.
Spinelli, Altiero. 1966. The Eurocrats. Baltimore: Johns
Hopkins University Press.
Westlake, Martin. 1995. The Council of Ministers. Har10w: Cartermil.

-Geoffrey Edwards

Commlttee of the
Regions (COR)
Partly for reasons of democratic legitimacy and
partly because it sees regionalism as integral to
federalism, the Commission has long advocated
greater regional involvement in European integration. In October 1991, the Commission submitted
a paper to the intergovernmental conference (IGe)
on political union proposing the establishment of
a Committee of the Regions (COR) to advise the
Council of Ministers and Commission on relevant
policies and draft legislation. The member states
concurred and included in the Treaty on European
Union (TEU) a provision establishing an advisory
committee consisting of "representatives of regional and local bodies."
The COR held its inaugural meeting in Brussels on March 10 and 11, 1994. The committee
elects its own chairman and officers from among
its members for two-year terms and adopts its own
rules ofprocedure (which are subject to the Council's unanimous approval). With a total membership of 222, the COR's composition is identical
(in terms of national representation) to that of the
older Economic and Social Committee (ESC).
The COR has no legislative authority, but the
Council or the Commission must consult it on a
range of issues, notably social policy, education,
culture, public health, transport, telecommunications, energy, and economic and social cohesion.
The Council or Commission can set a one-month
time limit for submission of an opinion. The COR
may also meet and issue opinions on its own ini-

Common Agricultural Policy (CAP)

tiative if it considers that specific regional interests are involved.

Acting unanimously on proposals from the
member states, the Council appoints members and
alternate members for renewable four-year terms.
The Commission clearly stated in its lune 1991
submission to the IGC that the new Committee's
members should hold elective office at regional or
local level, but Article 198a of the TEU does not
include that eondition. Moreover, the Council decided in lune 1992 that it was up to each government, using its own criteria, to nominate people to
represent regional and local communities.
This beeame a vexed political question in
Britain. As a highly centralized state hostile to Eurofederalism, Britain instinctively opposed the
Commission's proposal to establish COR but reluctantly went along with the idea at the Maastrieht summit. Beeause the TEU gives governments complete discretion to nominate COR
members and because Britain lacks an institutionalized regional structure, England, Scotland,
Wales, and Nortbern Ireland (the UK's constituent
parts) have no right to send representatives to the
new committee. In the event, the British government tends to overrepresent Scotland and Wales in
COR in order to appease Scottish and Welsh nationalism.
Initially, the European Parliament (EP) was
unhappy about COR's existence: in aseries of
written questions in 1992, Europarliamentarians
expressed concern about COR's relationship with
the EP and with the ESC. In reply, the Council
pointed out that apart from sharing facilities and
administrative support, the ESC and COR would
be independent of each other. The Council also asserted that COR would have no direct dealings
with the EP and would not duplicate the EP's role
in any way.
Despite the ESC's concern, the ESC's own
history (as the EU's only other high-level advisory
committee) did not bode well for COR. As if to allay widespread misgivings about COR's future
even before the committee was officially constituted, the European Council in Birrningham in
Oetober 1992 issued a statement underlining "the
importance [it attaches] to the ... Committee of the
Regions." In the event, COR has not had much of
an impact on the EU's institutional or political development. Despite aggressive and imaginative
leadership, its role is too limited and its composi-

71

tion too heterogeneous for it to become a major

player in Brussels.
See also APPENDIX 1.

Commlttee on Agrlcultural
Strudures and Rural
Development (STAR)
The Committee on Agricultural Structures and
Rural Development (STAR) is a eommittee of senior officials, from the member states' agriculture
ministries, who prepare and coordinate meetings
of the Council of agriculture ministers. It is one of
only two sectoral committees of senior officials
that supersede the Committee of Permanent Representatives (COREPER)-the other is the Monetary Committee, which prepares meetings of the
Council of Economic and Finance Ministers
(ECOFIN). Before 1988, when the name was
changed to refleet the EC's concern about rural
development as well as agrieultural price supports, the committee was called the Standing
Committee on Agricultural Structures.

Commlttee on a People's
Europe
See ADONNINO COMMITIEE.

Common Agrlcultural
Pollcy (CAP)
The treaty establishing the European Economic
Community, signed in Rome in March 1957, provides for the setting up of a eommon market
through the abolition, between member states, of
customs duties and quantitative restrictions to the
free movement of goods and of allother measures
having equivalent effect. Within the section of the
treaty devoted to the establishment of a common
market, Title 11 (Articles 38-47) specifically refers
to agrieulture.
Article 38 provides that "the common market
shall extend to agriculture and trade in agriculture" and that "the operation and development of
the common market for agrieultural products must
be accompanied by the establishment of a common agricultural policy among the Member
States." This commitrnent to a Common Agricultural Poliey (CAP), whose fulfillment has been so
decisive in the development of European integra-

72

Common Agricultural Policy (CAP)

tion, includes a number of objectives (outlined in

Article 39): (1) to increase agricultural productivity by promoting technical progress and by ensuring the rational deve10pment of agricultural production and the optimum utilization of the factors
of production, in particular labor; (2) to ensure a
fair standard of living for the agricultural community, in particular by increasing the individual
earnings of persons engaged in agriculture; (3) to
stabilize markets; (4) to assure the availability of
supplies; and (5) to ensure that supplies reach consumers at reasonable prices.
Although Title I (free movement of goods)
lays down a precise timetable for achieving a common market from the customs point of view, the
substance of the CAP was not actually spelled out
in the treaty itself. Instead, Article 43 merely states
that "in order to evolve the broad lines of a Common Agricultural Policy, the Commission shall,
immediately after this Treaty enters into force, convene a conference of the Member States with a
view to making a comparison of their agricultural
policies, in particular by producing a statement of
their resources and needs." It was the newly created
Commission, therefore, which set about preparing
the CAP and in a re1atively short time achieved
considerable practical results. The Commission's
success was due mainly to the political will of the
six original member states to achieve European integration on the basis of a common market of industrial and agricultural products and also to the
outstanding negotiating ability that the Commission displayed in securing acceptance of the new
EC by its main European and non-European trading partners-above all by the United States.
The CAP that emerged in the 1960s was
based on a system of guaranteed prices for the
main agricultural crops and products. Ironically, it
was perfectly well understood when the treaty was
signed that the objectives contained in Article 39
could not be achieved using the mechanisms for
market liberalization laid down for industrial
products; thus, it is significant that Article 42 excludes the production and trade of agricultural
products from the scope of the general provisions
on competition laid down in Articles 85 to 94 of
the treaty.
Development of the Common
Agricultural Policy

The broad lines of the CAP were determined

shortly after the treaty came into force, at a con-

ference in Stresa in July 1958. The Stresa conference outlined a common system of agricultural
prices, deve10ped a market framework that incorporated national agricultural systems into a common market, and emphasized the need for structural change and greater productivity. The
Commission then drew up proposals on the common organization of the agricultural market within
the meaning of Article 40(2) of the treaty. At the
end of the first stage of the transitional period for
the establishment of a common market (Article 8
of the treaty), in January 1962 the Council of Ministers adopted a "package" of measures, based on
a compromise on the price of cereals, a key community commodity.
An essential element of the emerging system
was the setting of Community-wide prices, which
in turn determined import levies and export refunds by mechanisms of intervention introduced to
determine the income of farmers. The lynchpin of
the system is the "target price," that is, the price
farmers are to receive within the EC. In case of
overproduction, the target price turns into the "intervention price"; this is the price at which the intervention agencies, specially designated by the
member states, are required to buy surplus agricultural products in unlimited quantities (guaranteed
withdrawal). The intervention system guarantees
farmers minimum selling prices for their agricultural products, whatever the circumstances, even
when higher prices cannot be obtained on the market. The main aim of this guaranteed minimum
price is to ensure that farmers have adequate incomes. Finally, the "entry price" was introduced to
protect prices within the EC and thereby agricultural production in general; the entry price is the
minimum price at which farm products may be imported into the Community. It was designed to prevent the EC's agricultural market from being
flooded by lower-priced imports from third countries, and it worked, thanks to a "levy" that artificially raises the price of imported products to the
level of the entry price. These levies constitute part
of the EC's "own resources" and accrue to the EC
budget. On the other hand, products leaving the EC
enjoy an export subsidy-the "refund" paid by the
EC to exporters of agricultural products to bridge
the gap between (lower) world prices and (higher)
prices in the EC. The export subsidy enables EC
farmers to dispose of their products on the world
market despite the fact that guaranteed prices
within the EC are generally higher.

Common Agricultural Policy (CAP)

Article 40(4) of the treaty states that in order

to enable the common organization of the agricultural market "to attain its objectives, one or more
agricultural guidance and guarantee funds may be
set up." Thus, in April 1962 the Council of Ministers established the European Agricultural Guidance and Guarantee Fund (EAGGF) for the purpose of gradually taking over the burden of CAP
expenditure that, apart from the costs of market intervention, included the cost of a socioeconomic
policy intended to complement the prices policy
and improve basic structural conditions in European agriculture. The EAGGF consists of two sections: a guarantee section for expenditure arising
out of the market and prices policy (this accounts
for the lion's share of CAP expenditure and covers
the cost of the minimum guaranteed price and exports refunds) and a guidance section to cover expenditure arising from the agricultural-structural
policy. Initially the CAP was financed jointly by
the EC and the member states, but as a result of a
landmark agreement in April 1970, the EAGGF
was incorporated entirely into the EC budget. This
was the culmination of aseries of political battles
in the 1960s-most notably the 1965-1966 "empty
chair crisis"-waged either wholly or partlyon the
issue of CAP funding, which profoundly altered
the EC's political and institutional development.
The series of decisions taken at the beginning
of 1962 thus heralded the three essential principles
on which the common agricultural policy was to
rest: the single market, based on a system of common prices; Community preference, guaranteed by
entry prices and import levies; and financial solidarity, based on the EAGGF. Although the CAP
achieved some of the other objectives set by Article
39 of the treaty, for instance, "to assure the availability of supplies" and "to increase agricultural
productivity by promoting technical progress," the
overall impact of the CAP has in many respects
been disastrous. Progress in agronomics and technology, together with an unrestricted guarantee of
prices higher than those prevailing on the world
market, generated massive overproduction. The ensuing cost became a huge burden for the EC's budget while at the same time, paradoxically, most
farmers' incomes steadily fell. Public opinion reacted against both the cost of the CAP and the substantial surplus of agricultural produce generated in
the EC as a result of uncontrolled output.
Apart from domestic discontent, the CAP
also became a major irritant in the EC's external

73

economic relations. Most industrialized countries

operate policies that in one way or another, directly or indirectly, assist agricultural exports. But
the EC's high level of agricultural export sub sidization pushed the United States openly to subsidize exports of agricultural produce as weIl and
generated considerable international criticism of
the CAP. In an effort to reduce the runaway cost of
the CAP, appease an increasingly restive public
opinion scandalized by the CAP's waste of money
and the destruction or storage of agricultural surpluses, and facilitate the conduct of multilateral
trade negotiations, the EC launched a prolonged
process of CAP reform, starting in 1984 with the
introduction of the quota scheme for diary production. As part of a comprehensive reorganization of
the EC budget (the Delors I package), concluded
at an extraordinary European Council in Brussels
in February 1988 after a year of contentious negotiations, EC expenditure on agriculture has been
tightly controlled within a strict "budgetary discipline" whereby the "agricultural guideline" of the
EAGGF cannot be increased beyond 74 percent of
the rate of increase in the GNP as of 1988. Based
on an agreement reached at the European Council
in Edinburgh in December 1992 (the Delors 11
package) and an interinstitutional agreement of
October 1993, the 1988 decision to control agricultural expenditure was strengthened by a Council decision in November 1994. Following enlargement of the EU in 1995, the agricultural
guideline was calculated to be ECU 40.797 million for 1996 and ECU 41.805 million for 1997.
Finally, after lengthy and difficult negotiations, the Council of Ministers reached political
agreement at a meeting in Brussels in May 1992
on a radical revision of the main CAP mechanisms. As part of the so-called MacSharry reform
(named after the agricultural commissioner), the
EC began to abandon artificial support for agricultural prices in favor of direct support of farmers'
incomes (independent of production). This was to
be achieved by deep cuts in guaranteed prices
combined with direct payments to farmers in the
form of premiums (subject to certain ceilings) for
animal production and aid per hectare (connected
with a set-aside requirement initially fixed at 15
percent of all land under arable crops) to reduce
production and, therefore, quantities available for
export. This system of direct payments to producers was coupled with backup measures aimed at
protecting the environment.

74

Common Agricultural Policy (CAP)

Such radical refonn, although inherently positive, nevertheless entails formidable challenges
for the EC both from the point of view of maintaining internal cohesion and of securing international understanding and support. Internally, differences between the legal systems of the member
states mean that it is difficult to ensure respect
among agricultural producers throughout the EC
for the principle of nondiscrimination, a cornerstone of the correct application of Community
law. Unlike the situation in the United States,
where responsibility for managing agricultural
policy remains exclusively in Washington, implementation (as distinct from fonnulation) of the
CAP rests with the member states or regional authorities themselves. Aware of the administrative
difficulties involved as weIl as of the considerable
risk of fraud that is ubiquitous in the absence of
centralized structures to combat it effectively, the
Council and the Commission declared after the
May 1992 refonn agreement that "the regulations
to implement [refonn] ... must be as simple as
possible for the measures to be acceptable to those
concerned."
Another problem that the EC will no doubt
have to face in the years to come and that will inevitably complicate the practical implementation
of CAP refonn is the insecurity feIt by farmers
who receive aid per hectare fixed in ecus at a time
when Economic and Monetary Union and a single
currency are objectives to be attained by 1999.
Converting aid per hectare into national currencies
therefore involves a degree of uncertainty for the
recipients of such aid, especially as farmers are no
longer protected by an extremely elaborate agrimonetary system originally put in place in the
early 1970s to cushion the CAP from exchange
rate fluctuations.
Externally, the MacSharry refonn contributed
to the success of the Uruguay Round of the GATI.
By convincing the United States and other major
agricultural exporters that the EC was serious about
cutting production and curbing export subsidies,
the refonn helped pave the way for an end to the
protracted trade negotiations. Moreover, the
Uruguay Round required, among other measures, a
21 percent cut in the quantity of subsidized exports.
Rural Development, Forestry, and
Environmental Protection

Despite lirnited budgetary resources, the Community was able to put in place in the early 1970s a

structural policy for the modernization of European agriculture. Specific directives concerning
mountain and hin farrning and farrning in less-favored areas were based on the granting of compensatory allowances cofinanced by the EC and
by the member states. This agricultural-structural
policy helped to halt the exodus from the land
that inevitably accompanied the modernization of
agriculture. Unfortunately, however, as a result of
the cofinancing system the most prosperous
member states derived greater benefit from this
policy: regional imbalances were thus increased
instead of reduced, which made the EC's progress
toward economic and social cohesion even more
difficult.
In the 1980s the Comrnission initiated a discussion about new development patterns for agriculture and the countryside. However, the Commission was more concerned with correcting the
evils of overproduction than with taking real account of the need to stop degradation of the land.
Nevertheless, the special European Council that
met in Brussels in February 1988 to impose budgetary discipline and refonn the structural funds
established a new structural funds category, Objective 5(b), to support certain "rural areas" in the
Ee. This was revised as part of the Delors 11 package in July 1993.
In July 1988 the Comrnission submitted a
communication to the Council and the European
Parliament (EP) on "the future of rural society"
with the aim of encouraging joint discussions. As
a result, the name of Directorate-General VI of the
Commission was changed from Agriculture to
Agriculture and Rural Society, and the Standing
Committee on Agricultural Structures, set up in
1962 to help the Comrnission implement the CAP,
changed its name to the Committee on Agricultural Structures and Rural Development (STAR).
Despite the indisputable change in awareness that
has been shown by the Commission, the EP, the
Economic and Social Comrnittee, and all professional and academic circles, it is nonetheless striking that, when refonning the CAP in 1992, the
Council took very little account of the prospects
for the development of rural society, apart from
adopting backup measures concerning methods of
agricultural production compatible with the protection of the environment and the maintenance of
the countryside and introducing a Community aid
scheme for forestry measures in the agricultural
sector.

Common Agricultural Policy (CAP)

In the meanwhile, the Single European Act

introduced an environmental dimension into all
EC policies, a requirement subsequently reinforced by the Treaty on European Union. Thus the
latest EU environmental action plan includes provisions concerning the CAP specifically. For the
moment, however, the Council does not seem
ready to tie CAP payments to any kind of action to
protect the environment.
Another accompanying measure in the
framework of the reformed CAP is the aid program for afforestation. Apart from the adoption of
one or another forestry measure applicable to agricultural holdings and specific regulations for the
protection of Community forests against air pollution and forest fires, the Council has always refused to consider forestry as such as subject to
CAP measures because timber is not included in
the list in Annex 11 of the products covered by Articles 39-46 of the Treaty of Rome.
Fortunately, this has not prevented a degree
of EU coordination of national forestry policies,
especially with respect to "sustainable management" and "environmental certification of timber,"
issues that are being discussed by an intergovernmental panel on forestry under the auspices of the
UN's Comrnission on Sustainable Development.
Given that forests are unquestionably a key factor
in the development of rural society, forestry policy
is a clear example of the reluctance of certain
member states to view the CAP as anything other
than a mechanism for market organization.
By contrast, the EP has always acknowledged
and encouraged the contribution of forestry to regional development and has long wanted to see
the simultaneous and balanced upgrading of the
economic, ecological, regenerative, and recreational functions of all forests in the EU to the status of a structural policy objective. However, the
EP does not yet possess the power of "co-decision" in this area that would enable it to soften the
Council's approach. Indeed, despite its considerable budgetary authority, the EP has only a marginal role in CAP decisionmaking.
Even if the agriculture ministers have on a
number of occasions chosen as subjects for discussions at their informal meetings questions regarding the place of agriculture in contemporary
society and its relationship with the environment
and with the countryside, ministers tend to become extremely cautious when the question arises
of comrnitting EU resources to a "common pol-

75

icy." The temptation to invoke the subsidiarity

principle is very strong, especially for ministers
from the most prosperous member states.
Accordingly, it should come as no surprise
that the EU's agriculture ministers prefer to continue discussing the future of rural society, albeit
in increasing detail, in an informal framework.
Moreover, Franz Fishier, the agriculture comrnissioner, argues with respect to EU enlargement that
the CAP should not undergo radical reform but
merely be simplified, supplemented, and brought
more closely into line with market trends. In the
long term, however, this may not be compatible
with environmental protection and the restoration
of the countryside. In view of the limited resources available for the EAGGF guarantee section, owing to budgetary discipline, it is difficult
to envisage substantial Community aid to support
rural society as such while EU funds continue to
accord privileged treatment to the productivity of
the most efficient farmers.
Conc/usion

Despite all the criticism leveled at the CAP

and the difficulties that it has had to face-most
recently, for instance, because of the bovine
spongiform encephalopathy (BSE) crisis-the
CAP still remains an essential aspect of European
integration, not least because it still absorbs about
half of the EU budget. Although the CAP's fundamental nature is changing-with a move away
from pricing policy toward direct income support
and greater concern for the environment-the future of the CAP is by no means certain, especially
in view of the EU's impending enlargement. Most
of the applicant states in Central and Eastern Europe have large, relatively antiquated agricultural
sec tors and face daunting environmental challenges. Extension of the existing CAP regime
eastward may simply not be possible. Even without enlargement, the CAP's prospects are problematic. For example, despite the high cost of
dealing with BSE, the budget adopted by the EP in
December 1996 allocated ECU one billion less to
the CAP than the amount authorized by the budgetary discipline.
Ultimately, the fate of the CAP will depend
on its ability to adapt to a need strongly feIt by European citizens: ensuring the future of natural resources. Increasingly, therefore, member states
will have to confront the issues of rural development and environment protection in the context of

76

Common Commercial Policy (CCP)

the CAP. The final declaration of a Commissionsponsored conference in Cork, Ire1and, in November 1996 called for a specific rural development
policy with its own objectives, principles, instruments, and financial means. Unfortunately, the
general euphoria that accompanied the meeting
was not reflected in the European Council held in
Dublin less than a month later, despite the fact that
some member states (notably Sweden) emphasized the importance of a comprehensive approach
to the CAP in order to enhance agriculture's potential environmental benefits while reducing pollution and overproduction.
Despite recent reforms, therefore, three factors make it likely that EU agricultural policy will
be further reformed in the near future: internal
pressure for environmental protection and rural
development, EU enlargement into Central and
Eastern Europe, and an increasingly competitive
international economy driven by trade liberalization.
See also COMMITTEE ON AGRICULTURAL
STRUCTURES AND RURAL DEVELOPMENT; EUROPEAN AGRICULTURAL GUIDANCE AND GUARANTEE

FuND;

MACSHARRY PLAN.

Bibliography
Commission. 1992. Agriculture in Europe: Development, Constraints, and Perspectives. Luxembourg:
Office for Official Publications of the European
Communities.
Marsh. John, and Bryn Green, eds. 1991. The Changing
Role of the Common Agricultural Policy: The Future
of Farming in Europe. London: Belhaven.
Petit, Michael, et al. 1995. Agricultural Policy Formation in the European Community. Amsterdam: Elsevier.

-Claudio D'Aloya and Monica Mezzadri

Common Commerclal
Pollcy (CCP)
The Common Commercial Policy (CCP) of the
EU is embodied in Articles 110-116 of the Treaty
of Rome, which established the European Econornic Community (EEC). Article 110 calls for the
creation of a customs union; Article 112 calls for
uniform commercial practices with nonmember
states; Article 113 gives responsibility for the conduct of the CCP, both internally and externally, to
the Commission and the Council of Ministers; and
Article 115 requires member states to honor re-

strictions on imports from outside the Community

maintained by other member states and gives the
Commission authority to mandate protective measures. Articles 111, 114, and 116 have since been
repealed.
The establishment of a customs union and the
ceding to the EC of competence in trade matters
were only the first steps in the integration process.
The EC's founding fathers clearly intended to go
further. In addition to abolishing all tariffs and
quotas between member states, Jean Monnet,
Robert Marjolin, and others intended to provide
for complete freedom of passage within the EC
for goods, services, capital, and people (the socalled four freedoms). Therefore, the CCP should
be thought of as including measures such as the
single market program designed to remove all of
the nontariff impediments to free trade among
me mb er states and perhaps also Economic and
Monetary Union (EMU). Once the bulk of the single market program was legislated at the end of
1992, the Commission argued that it was important to take the next step, to a single currency and
monetary policy, to ensure the proper working of
the single market.
The framers of the Treaty of Rome considered econornic integration, inc1uding a CCP, to be
absolutely necessary if member states were to
pros per in the postwar world. The econornic arguments for integration inc1uded the need to broaden
relatively small national markets to support more
efficient industries in an era of technological advance and strong competition, especially from the
United States. The producer and consumer benefits of regional economic integration were viewed
as necessary to promote full employment, price
stability, and growth in Europe. Politically, a
strong, integrated economy in Western Europe
would help to tie Germany into the emerging international system, build a strong Europe as a
counter to Soviet expansion, and ensure a major
role for Europe in world affairs.
Robert Marjolin, former head of the Organization for European Economic Cooperation, adviser to the French foreign minister, and later one
of the first commissioners, was openly critical of
initial French opposition to econornic integration.
He argued that France must take the risks inherent
in a free trade area and in the international division of labor if it expected to improve its economic conditions. Marjolin characterized the
movement to customs union and common market

Common Commercial Policy (CCP)

as a "test of European will," arguing that Europe

would lose ground to the United States if it did not
develop a common market: the limited sectoral
approach of the European Coal and Steel Community (ECSC) was not sufficient (Marjolin, 1989,
pp. 280-290).
The Customs Union

Customs unions existed in the nineteenth century,

but the first theoretical work on the concept did
not appear until 1950, just as Monnet and Robert
Schuman, the French foreign minister, were thinking of ways to facilitate European integration. Europe at that time was a thicket of impediments to
trade. These included high tariffs, restrictive quotas, strong national preferences in transport and
procurement regulations and competition policies,
differing national tax systems and social insurance
regimes, aggressive industrial subsidy policies,
exchange rate manipulation by governments, and
heavy controls on movement of capital and labor.
The work of Jacob Viner, Jan Tinbergen, and
James Meade provided Monnet and others strong
justification for moving in the direction of integration and liberalization. The six countries of continental Europe seemed to meet the criteria for a
successful customs union that would serve to benefit European producers and consumers: they were
advanced economies at sirnilar stages of industrialization, having common geographic borders,
open economies, long-standing trade relationships
based on competition rather than complementarity, and relatively high tariffs and quantitative restrictions.
Customs union theory argued that dismantling of quantitative restrictions (QRs)-tariffs
and quotas-and establishment of a common external tariff (CET) would force a more efficient
utilization of factors of production (land, labor,
capital, technology, and entrepreneurship ). Firms
with high production costs would lose their protection from competitors in other member states
and would be forced to reduce costs or go out of
business. Consumers would benefit from lower
prices and greater choice. However, the negative
effects of this process would include unemployment as firms closed or moved to lower cost areas
and some loss of consumer welfare in the form of
higher prices for items formerly imported at low
cost from nonmember states.
Viner described two effects of a customs
union: trade creation and trade diversion. Trade

77

creation occurs within the union as one member

shifts from high-cost domestic production of a
product and imports that product from a partner
with lower-cost production. Trade diversion occurs when a member shifts from purchasing a
product of a cheaper nonmember supplier to one
of a more expensive partner in the union. These
are what economists call the static effects of a customs union. In addition, there are dynarnic effects,
including economies of scale that result from increased market size, greater competition, increased innovation, and free movement of factors
ofproduction (Viner, 1950; Meade, 1955).
International trading rules-Article XXN of
the GATT-require that arrangements such as
customs unions, which give preferential treatment
to members and therefore depart from the traditional GATT principle of most-favored-nation
treatment, should eliminate barriers on substantially all trade among members and that the trade
barriers imposed on nonmembers should not on
the whole be higher or more restrictive than those
previously in effect. Also, transition periods leading to such arrangements must not be overly long.
(Article XXIV does not cover partial arrangements: the ECSC was approved by the GATT under the terms of Article XXV [5] after the ECSC's
member states gave assurances that the arrangement would not prejudice traditional trading partners.)
Since the founding of the GATT in 1947, the
EC has submitted forty notifications of preferential trading arrangements, including the 1957 EEC
treaty, several bilateral association agreements
with third countries, and the 1973, 1981, 1986,
and 1995 enlargements of the EC and EU. The
GATT has never given an opinion on compliance
of the original EEC treaty with Article XXIV (nor
on any of the other thirty-nine applications)
(Schott, 1989). This was largely because at the
time of notification, the Uni ted States chose not to
contest the treaty on the grounds that the need for
political integration in Europe outweighed the
possible trade diversion effects of the Rome treaty.
An authoritative analysis of the CET and the
Common Agricultural Policy (CAP) in the early
years of the EC suggests that indeed there was
trade diversion and loss of welfare for third countries (Krause, 1973, pp. 104-117). In the years
since that study, average EC tariff levels for nonagricultural goods have been lowered in successive GATT rounds from 13 percent to about 4 per-

78

Common Commercial Policy (CCP)

cent. It is probably safe to say that this decrease,

combined with the dynamic effects stemming
from the customs union, has increased world
trade.
In spite of initial French opposition centered
mainlyon the level of the CET and concerns that
high domestic social costs would make its products uncompetitive, the CCP provisions of the
treaty were agreed to without much difficulty. At
the Messina conference of 1955, the Bene1ux
countries led the drive for a common market. Germany supported free trade but was more cautious
because it did not wish to alienate France. France,
therefore, played a key role in the negotiations, insisting on resolution of all CAP trade issues,
phased tariff reductions, and a CET based on unweighted average tariff levels of member states.
(Giving the same weight to countries with very
high tariffs on a product and very low imports
gives an upward bias to the CET; econornists now
allow more weight to low tariff countries-probably also the low cost suppliers-with large imports of the product in question.)
The treaty laid down a strict implementation
timetable to avoid foot dragging by member
states. The transition period to zero tariffs and
quotas and establishment of the CET was set at
three steps of four years each. A unanimous vote
was required to move from stage 1 to stage 2 (and
two extra years were allowed if member states
faced difficulties). Moves to subsequent stages
were by qualitled majority vote, and unanimity
was required to prolong the passage from stage 2
to 3. The phased cuts in tariffs and quotas actually
proceeded faster (at French suggestion) than provided in the treaty. Members were required to
make across-the-board cuts on all goods but were
allowed smaller cuts on sensitive goods as long as
the overall average met the target. Starting maximum CET rates were set at 15 to 25 percent for
manufactured goods, 10 to 15 percent for
processed raw materials, and 3 percent for raw
materials. The EC also offered generous reductions from these levels in multilateral trade negotiations beginning with the 1962 Kennedy Round of
the GATT. All quotas (except on agricultural products) were eliminated by January 1962 and tariffs
reduced to zero by July 1967. This allowed the
customs union to enter into effect in July 1968,
eighteen months early.
Customs unions can produce effects on the
growth and direction of trade and on the location

of production within the union. Studies of EC

trade in the transition period show strong internal
trade creation. Intra-EC trade grew 17 percent annually between 1958 and 1965 while imports from
nonmembers rose only 9.2 percent. There was no
strong evidence of major industrial relocation in
the early period (Walter, 1968, pp. 134-160). Today, intra-EU trade accounts for more than 65 percent of total trade. Econornists note that during the
transition period, Europe (along with most of the
world) benefited from favorable econornic conditions, with 5 percent annual growth. This prosperity c1early helped the EC to achieve the customs
union early without negative impacts on any
members. There was some increase in internal
nontariff barriers (NTBs) during the period as
some members sought to protect their "national
champions" from lower-priced competition. The
stronger relationships deve10ped during the transition period probably helped the Community
weather the bad years of the two oil shocks and
Eurosc1erosis. Industry strongly supported econornic integration in this period and was instrumental in pushing the Commission to take the
next step of creating a single market.
Commission Competence in Trade

The treaty called for a common external trade policy, meaning that henceforth the EC would act as
one in trade negotiations with nonmembers. In addition to ceding sovereignty on trade maUers to
EC institutions, member states were required
gradually to cut their own QRs with nonmembers
and harmonize national export and import regulations. Member states were also required to harmonize their existing bilateral commercial treaties
with nonmembers so that by the end of the transition period all treaties would be in effect for the
EC as a whole.
Having established the principle of Community competence and the need for uniform member-state external trade regimes, the CCP provided
sovereign powers for the EC to negotiate new
commercial agreements with nonmembers and
new relations with all categories of trading partners and to harmonize existing agreements. Under
the provisions of Artic1e 113, the process of entering into external trade agreements begins with a
request from the Commission to the Council of
Ministers for authority to begin negotiations. Negotiators from DG I of the Commission must take
their instructions from the 113 Committee, a

Common Commercial Policy (CCP)

Council organization that includes senior trade officials from the member states. The text of the
agreement resulting from the negotiations must be
approved by the Counci1. In the case of association agreements with nonmembers, approval of
the European Parliament is also required. Certain
types of agreements are approved not only by EC
bodies but also by member state parliaments.
In dealings with the GATT and the successor
World Trade Organization (WTO), individual EU
countries are contracting parties, but the EU generally speaks with one voice. On some occasions, EU
member states vote individually in the GATT but
only on the basis of Commission instructions. This
means that for voting purposes in the WTO, the EU
now has fifteen votes. Before stating the EU position, the Commission representative must seek a
"coordination" of individual member state positions. In the WTO, this coordination takes place in
a building in Geneva known, appropriately, as "the
bunker." The coordination procedure is also used
by the EU in international commodity agreements---operated under the aegis of the UN Conference on Trade and Development (UNCTAD)--to which it belongs.
The relationship between the EU and the European Free Trade Area (EFTA), a rival group that
was created in 1960 by seven states not in the
original EC, has evolved over the years. The EC
extended tariff-free access to EFTA in 1972. In
1990, five EFTA countries entered into an extended free trade area (FTA) relationship with the
EC. Entitled the European Economic Area (EEA),
this was not a customs union (the EFTA five kept
their individual external tariffs), but EFTA members did benefit from many of the trade liberalization measures of the EC's single market program.
Three of the EFTA EEA members have now
joined the EU and the EEA is no longer viewed as
an alternative to EU membership but as an "anteroom" for those nations considered eligible for
later entry into the Union.
The Lome convention gives its seventy-seven
Mrican, Caribbean, and Pacific (ACP) participating states (former colonies of EU member states)
preferential access to the EU market in a wide
range of commodities. The agreement also provides for reductions in some NTBs as weIl as export promotion assistance, a commodity price stabilization fund, and environmental and industrial
cooperation agreements. In the early years of
Lome, the ACP countries extended reciprocal

79

preferences to the EC, but this practice has been

challenged as a violation of GATT mIes by the
United States and others (Jackson, 1992).
The generalized system of preferences (GSP)
is another departure from the GATT most-favored-nation principle used by the EU, the United
States, and other developed countries as an economic assistance too1. The EU GSP provides varying degrees of preferential access for many industrial and agricultural products from over one
hundred least-developed countries. In addition to
Lome and GSP, the EC has developed economic
relationships with other developing countries, including trade and commercial cooperation agreements with several Asian and Latin American
countries, the Gulf states, and northern Mediterranean countries; regional framework agreements
with the Association of Southeast Asian Nations
(ASEAN) and Central America; and preferential
trade and co operation agreements with the
Maghreb countries and Egypt, Jordan, Lebanon,
and Syria.
Internallmp/ications of the CCP

Internally, the CCP has been the principal driver of

economic integration, bringing concrete benefits
first in the customs union phase (1958-1985) and
later in the single market phase (1985 to the present). Member states have had several concerns
about the effects of the CCP on their economies.
All had to become accustomed to the loss of sovereignty concerning trade matters (as weIl as the loss
of tariff, quota, and later NTB protection from one
another). National industries faced the need to become competitive within Europe or go out of business. During the negotiation of the Single European Act in 1985, Spain and Portugal successfully
argued for economic assistance from the Commission (i.e., a strong cohesion policy) to ease the
transition to competition in the single market with
more advanced industries in northern Europe.
Integration has prompted a process of consolidation (action within companies to rationalize
manufacturing and distribution facilities into
fewer, larger operations) and concentration (mergers and acquisitions between companies). These
activities have led to a pan-European market with
increased concentration (subject to Commission
vigilance to avoid antitrust violations), increased
competition, and lower prices. Economists disagree on the magnitude of the dynarnic effects of
the CCP, but it is clear that integration has created

80

Common Externat Tarif{ (CET)

economies of scale that could lead Europe to a

steeper growth path.
External Effects

The external effects of the CCP have provided

benefits to partners receiving trade preferences
(ACP countries, GSP recipients, and Mediterranean countries) and caused disputes with partners who experienced consequent trade diversion. The United States fought a sixteen-year
battle in the GATT against EC preferences on
Mediterranean citrus products that served to displace U.S. exports. The United States was also
successful in ending the reciprocal tariff concessions extended by the Mediterranean countries to
the EC. Mediterranean preferences in a wide
range of products, inc1uding olive oil, wine, and
citrus fruits, caused concern in Portugal and
Spain as they joined the EU. Over the past few
years, the EU has upgraded its trade agreements
with several Central and Eastern European countries to Europe Agreements. These pacts have
features similar to free trade agreements except
that tariffs and QRs remain on sensitive items
such as steel, coal, textiles, and certain agricultural products. The EU has also encouraged the
Eastern European countries to structure their tariff schedules so that tariffs with the EU are reduced at a faster rate than those to other countries. This has led to complaints from the United
States and other nations.
National quotas, voluntary restraint regimesrestrictive French and Italian quotas on Japanese
autos and voluntary restraint agreements (VRAs)
covering e1ectronic products-and high tariffs on
semiconductors are responsible in part for increased Japanese and U.S. investment in Europe.
The single market program requires member states
to phase out Artic1e 115 quotas and other QRs. The
Commission in 1991 negotiated an EC-wide VRA
on Japanese auto imports that replaces the individual national quotas. The auto pact is due to expire in
1999, but many observers believe it will be extended.
The Commission has gradually increased its
power to deal with unfair trade practices of nonmember countries. In order for the Commission to
bring a trade remedy action, injury must occur in
more than one member state. EU trade remedy
measures, especially a strong antidumping regime
and provisions to avoid circumvention of dumping
orders, led Japan to bring a complaint to the

GATT. Benefiting from its strong position in the

GATT, the EU fought against rapid liberalization
of trade in agricultural products and opposed (until the Uruguay Round) any strengthening of the
GATT dispute settlement mechanism.
Enlargement also caused trade disputes with
nonmembers. When new members join a customs
union, they may have to raise their duties to nonmembers on certain products in order to comply
with the EU CET. Under GATT rules, countries
whose exports are jeopardized by enlargement of
a customs union are entitled to compensation from
the union in the form of offsetting cuts in the CET.
The accessions of Britain, Denmark, and Ireland
in 1973 and of Spain and Portugal in 1986 caused
problems for U.S. agricultural and industrial exports. After threatening trade retaliation, the
United States obtained compensation.
See also COMMON MARKET; GENERAL AGREEMENT ON TARIFFS AND TRADE; SINGLE MARKET
UNION.

Bibliography
lackson, lohn H. 1992. "The European Community and
World Trade: The Commercial Policy Dimension."
In William James Adams, ed., Singular Europe. Ann
Arbor: University of Michigan Press.
Krause, Lawrence. 1973. "European Econornic Integration and the United States." In Melvyn B. Krauss,
ed., The Economics of Integration. London: Allen &
Unwin.
Marjolin, Robert. 1989. Architect of European Unity:
Memoirs 1911-1986. London: Weidenfield and
Nicholson.
Meade, James E. 1955. The Theory ofCustoms Unions.
Amsterdam: North Holland Press.
Schott, Jeffrey. 1989. "More Free Trade Areas." In Jeffrey Schott, ed., Free Trade Areas and U.S. Policy.
Washington, DC: Institute for International Economics.
Viner, Jacob. 1950. The Customs Union Issue. New
York: Camegie Endowment for International Peace.
Walter, Ingo. 1968. The European Common Market:
Growth and Patterns ofTrade and Production. New
York: Praeger.

-Anthony Wallace

Common Extemal Tariff (CET)

A common external tariff (CET) is the principal
means by which a common market protects and
distinguishes itself. The EU's common external
tariff (officially called the common customs tariff)
is described in Artic1es 18-25 of the Treaty of

Common Fisheries Policy (CFP)

Rome. Because the EC's original common tariff

was based on a straight unweighted arithmetical
average of the previous national tariffs, it was
compatible with the General Agreement on Tariffs
and Trade (GATT) code that forbade discrimination in international tariff arrangements. Subsequently the CET was lowered in international
trade negotiations, especially in the Dillon,
Kennedy, Tokyo, and Uruguay Rounds of the
GATT.
See also COMMON COMMERCIAL POLICY;
COMMON MARKET.

Common Fisheries Pollcy (CFP)

The need for a Common Fisheries Policy (CFP) is
now widely recognized. The starting point of the
theory of fisheries management is that high sea
fisheries are a perfect example of a common property resource. Without management there will be
overexploitation of stocks and overinvestment in
boats and equipment, resulting in suboptimal economic returns and resource allocation and, ultimately, the collapse of the fishing industry as fish
stocks are depleted. It has nevertheless proved extremely difficult to reach international agreements
on the management of stocks. The establishment
of two-hundred-mile coastal exclusion zones in
the mid-1970s meant that much of the North Sea
became EU waters. Allied to the accepted theory,
this provided a strong case for EU management of
fisheries in EU waters, as did interdependency
within the fishing industry: many mature fish
caught in the waters of one EU member are
spawned andJor spend part of their lives in the waters of another. AIthough the number of fishermen
in the EU is relatively smalI, it is estimated that
for every job at sea there are up to five on land (in
fish processing and boat building), and because of
its nature, the fis hing industry tends to be very geographically coneentrated.
In the 1960s there was little press ure to develop a CFP, as the sector was relatively unimportant to the original six, who clearly had other priorities. Indeed, the Treaty of Rome defines fish as
an "agrieuItural produet." However, in the late
1960s the Commission proposed a CFP that was
eventually implemented in 1971. It had three main
elements: open access (free access to each other's
waters), finaneial assistance for the "weaker" fisheries regions; and a marketing system for fish generally along the lines of the Common Agricultural

81

Policy (CAP). Perhaps more notable than the content of the poliey is an omission (the lack of any
significant reference to conservation of stocks)
and the timing (just as negotiations for aecession
with four countries with significant fisheries industries and waters-Britain, Ireland, Denmark,
and Norway-were about to begin).
Indeed, the four potential new members did
not accept the CFP: three of them insisted on adjustments, and the CFP was one of the reasons why
Norway uItimately chose not to join. Consequently,
the free access provision was suspended for ten
years, and the new members were granted six-mile
exclusion zones (extended to twelve, in places),
with "verbal assurances" that these arrangements
might continue thereafter. In addition, it was agreed
that the Commission should present proposals for
conservation measures (by 1979).
In the mid-1970s, the CFP was affected by
external events. Major fishing nations, beginning
with Iceland in 1975, began to declare two-hundred-mile exclusion zones around their coastlines,
and the EC feit compelled to do the same in 1976,
thereby creating the EC "fishpond" in the North
Sea. For the next six years further development of
the CFP was impossible because of increasingly
acrimonious disputes over how fish in EC waters
should be shared out. Essentially, the UK and Ireland claimed that as the majority of the EC's waters belonged to them, so did the fish; this was disputed by the rest of the EC. Ultimately, however,
the approach of the December 1982 deadline
forced compromise. The prospect of a free-for-all
after 1983 if agreement was not reached and the
impending accession of Spain and Portugal (with
comparatively larger fishing fleets than any of the
then EC members) led to concessions being made.
A second CFP was finally agreed on. This CFP
runs for twenty years (1983-2002) and has five
main elements:

1. The principle 0/ open access-that is, free

aceess for all EU fishermen to all EU waters.
However, there were three exeeptions to this, one
general and two speeific. In general, a twelvemile coastal zone was created for loeal boats.
More specifically, in a few limited areas, aecess of
large boats was restricted, and the principle of reciprocal free access was not extended to Spain and
Portugal when they acceded to the EU in 1986;
Spanish access to the rest of the EU's waters was
very limited (and vi ce versa).

82

Common Fisheries Policy (CFP)

2. Balanced exploitation offish stocks through

a system of conservation and management. The
centerpiece of this was the scientificaHy determined "total allowable catches" (TACs) that specified annually the quantity of each of the main
species that could be caught. The TACs were then
divided between the member states and were supplemented by various complementary measures
such as restrictions on net mesh size and temporary
fishing bans at certain times, in various areas, and
on taking particular species. The whole system is
enforced by member states, supervised by a small
EU fisheries inspectorate.
3. Financial assistance for the fisheries sector
to restructure, partly through established sources,
notably the Social Fund and the European Regional Development Fund (ERDF), and partly
through a special prograrn, established under the
ERDF, to help regions dependent on fisheries to
attract alternative employment. In addition, the
CFP itself inc1udes a fund of ECU 250 million to
fund the modernization of fleets, the search for
new stocks, the development of fish farming, and
the temporary withdrawal of larger boats; a subsidization scheme for scrapping excess capacity was
also introduced.
4. A marketing system (essentially, the system
introduced by the first CFP was continued).
5. Agreements with third countries to be negotiated at EU level. This is logical, given that the
EU, as the manager of the fish stocks of member
states, rather than the member states themselves,
is in a position to make the necessary concessions
required to extract reciprocal concessions from
third countries. However, this has proved to be a
difficult area, and the EU has had fisheries disputes with various countries, notably Canada and
Morocco, in recent years.

The CFP was subject to amid-term review, and a

few minor adjustments were made in 1993, notably
allowing greater use of a Multi-Annual Guidance
Pro gram (MAGP) to control overfishing and
putting limits on the number of days boats can
spend at sea. The fourth generation of the MAGP
should have begun on January 1, 1997, but its introduction was delayed by the member states' inability
to agree on the size of a cut in EU fishing capacity.
Nevertheless, the main thrust and detail of the CFP
remains unchanged. In fact, a more important development than the greater use of MAGPs was the

fuH incorporation of Spain and Portugal into the

CFP in 1996 (although the policy remains mainly
concerned with the North Sea, with more limited
application in the Mediterranean).
In many ways, the CFP is an excellent case
study of EU policymaking. The interdependencies
of the fishing sector provide a strong argument for
a policy at EU level, and the CFP is a typical
blend of economics and politics (at all decisionmaking levels). For these reasons, the CFP has
also had many problems. The operation of the
TACs has not been entirely successful. There have
been frequent dis agreements over the "scientific
basis" on which they are set, but more practically,
they have been set at the end of the year for one
year only, which has made planning of any kind
very difficult in the fisheries sector. Moreover, national quotas set on the basis of the TACs have
been occasionally difficult to agree upon and frequently difficult to implement.
Allegedly there is significant overfishing.
This is partly disguised where smaller fish and
fish whose quota is exhausted are discarded at sea.
Deliberate overfishing is made possible by poor
record keeping and inadequate policing: the EU
fisheries inspectorate is small and relies on (sometimes less than vigilant) national inspectors to
monitor their own fishermen. Finally, there is the
practice of "quota-hopping," whereby a boat from
one member state registers in another, thereby
"stealing" some of its quota. British fishermen, in
particular, have accused the Spanish of this practice. Inevitably, this is just one example of a whole
series of intra-EU disputes that have bedeviled the
CFP, as member states have sought to protect their
part of what has been a dec1ining industry with
considerable overcapacity.
Despite serious problems, however, the CFP
probably remains superior to its alternatives: it has
prevented a free-for-all in the North Sea, restricted
access to EU waters by third countries, and enabled
important conservation measures to be pursued. It
is true that there still remains much internal EU disagreement, and the regional concentration of the industry makes the CFP contentious and politically
sensitive. The CFP c1early has problems, and many
fishermen and some member states remain extremely critical of it. Nevertheless the CFP is arguably a good example of where the principle of
subsidiarity dictates the need for a policy at the Europeanlevel.

Common Foreign and Security Policy (CFSP)

Bib/iography
Karagiannakos, Apostolos. 1995. Fisheries Management in the European Union. Aldershot: Avebury.

-lohn Redmond

Common Forelgn and Securlty

Pollcy (CFSP)
The Common Foreign and Security Policy (CFSP)
is an evolving intergovernmental framework for
EU's member states, with limited participation by
the Commis sion, for the formulation and execution of common declarations, common positions,
and joint actions in international politics. CFSP
constitutes the second pillar of the Treaty on European Union (TEU), which also calls for the Western European Union (WEU) to become the EU's
defense arm and for the establishment of a European Security and Defense Identity (ESDI) and
the development of a common defense policy.
CFSP is heir to European Political Cooperation (EPC), established in 1970 to provide an intergovernmental forum (outside of the EC' s treaty
framework) for foreign policy discussions, consultations, common declarations, and, on occasion,
common action (Hill, 1983; Ginsberg, 1989; Holland, 1991). Whereas EPC was left completely
outside the EC's institutional apparatus, the TEU
brought CFSP fully inside an EC body-the secretariat of the Council of Ministers-and endowed
it with a larger and more permanent staff and with
its first budget. However, because CFSP remains
outside the EC treaty framework (Pillar One),
both the European Court of Justice and the European Parliament have limited roles in it. Whereas
EPC entailed loose arrangements for foreign policy cooperation and nonbinding member state
commitrnents, CFSP is designed to undergird joint
foreign policy actions with support and commitment from the highest levels of member state governments (Holland, 1996; Regelsberger, 1997).
CFSP should not be confused with the EC's
foreign economic, humanitarian, development,
and diplomatic policies and actions-all rooted in
the Treaty of Rome and formulated and executed
within the context of such integrationist principles
as qualified majority voting, the sole right of initiative for the Commission, and the central role of
European institutions. The member states-not
the EU institutions-are the paramount players in

83

CFSP, and all decisionmaking to date has been by

consensus. Nevertheless, a major goal of the TEU
was to enable the EU to draw on the two great cultures of European foreign policy cooperation-the
integrationist approach of the EC and the intergovernmentalist approach of EPC-to derive a
more rounded, holistic, consistent, and effective
CFSP.
The TEU calls on the European Council to
identify areas for CFSP joint actions and on the
General Affairs Council (foreign ministers) to formulate and execute them. Although the TEU provides for the opportunity of using qualified majority voting in order to implement joint actions, no
actions to date have been subject to such voting.
The Commission enjoys, alongside the member
governments, the right of initiative. It remains the
guardian of the Rome treaty within the CFSP domain, seeking to assure consistency between the
EC's external relations and CFSP, and it continues
to represent the EC abroad in the areas for which
it has treaty competence. The Council presidency
presides over CFSP and represents the EU abroad
on CFSP matters, assisted by the CFSP directorate-general in the Council secretariat.
Almost thirty CFSP common positions have
been adopted. Most dealt with nine states-Libya,
Burundi, Sudan, Haiti, Serbia, Rwanda, Ukraine,
Angola, and Nigeria-and many of the common
positions were taken in accordance with UN Security Council resolutions. Two were security related: support to shut down the Chernobyl nuclear
power plant and support for an international accord to address the humanitarian implications of
the use of blinding lasers.
Only a handful of CFSP joint actions have so
far been taken. These include support for the MiddIe East peace process, election monitoring (e.g.,
in South Africa and Russia), security issues such
as the convoying of humanitarian aid in exYugoslavia and civil administration in the city of
Mostar, export controls on dual-use goods, diplomatic efforts to promote the renewal of the Nuclear Nonproliferation Treaty, and controls on exports of antipersonne1land mines.
Thus the number and scope of common positions and joint action have been very modest. Optimists argue that the member states have to develop confidence among themselves in foreign
policy cooperation before being able to project
confidence outside the EU. Pessimists argue that

84

Common Foreign and Security Policy (CFSP)

the EU need not leam how to reinvent the EPC

wheel and that the problems plaguing CFSP will
not disappear.
The evolution of the WEU as the EU's defense arm has moved at a snail's pace. Despite
France's ambition to develop an ESDI, the WEU
has no integrated command as does NATO, no operational capacity, and no clearly defined links to
some of the emerging security arrangements
among subsets of the WEU membership, for example, the Franco-German Eurocorps. The NATO
council in January 1994 agreed to support the
ESDI and the WEU through the concept of Combined Joint Task Forces (CJTFs) in which the
WEU could use NATO forces, equipment, and
command structures for certain operations (notably peacekeeping operations) in which non-European NATO forces are not involved on the
ground. Two and a half years later, the modalities
of CJTFs were worked out by NATO and the
WEU when NATO foreign ministers, at their June
1996 Berlin meeting, agreed that NATO could
supply military forces and equipment to the WEU
with the approval of the NATO council.
Although such an arrangement means that the
ESDI may now continue to evolve, it can do so
only in the context of a U.S. "veto" in the NATO
council. The failure of European diplomatie efforts
to mediate the conflict in former Yugoslavia drove
horne a painful but real point to the Europeans:
there can be no independent ESDI at least in the
foreseeable future without the United States and
NATO. The U.S.-brokered Dayton Peace Accords
and the establishment of the Implementation Force
(IFOR) of NATO and non-NATO troops, operating
under the rubric of the United Nations, is not only
a prototypical CJTF but a reflection of the EU's
continued dependence on the Atlantic Alliance.
Another stumbling block to the development
of the ESDI and of the WEU as the EU's defense
arm is the accession of three neutrals to the EU in
1995-Sweden, Austria, and Finland. Along with
Ireland, the EU's three new neutrals are in neither
NATO nor the WEU. Thus, a formula must be
found for the neutrals to practice a form of "constructive abstention," thereby avoiding commitments that could violate their neutrality while at
the same time perrnitting the EU to develop its security identity through effective action.
Thus far, CFSP has not fared well: expectations have exceeded even the most enthusiastic

member states' willingness to submit to intergovernmental cooperation an area central to national

sovereignty (Hill, 1995). Member states differ more
over the means than the ends: they are seriously divided over the role in CFSP of EU institutions, voting methods, and financing of joint actions. AIthough the CFSP directorate-general in the Council
secretariat has been endowed with its own budget,
this is inadequate to fund joint actions. Accordingly, the financing of joint actions has become a
battleground for the Commission (which resists the
appropriation of EC funds for CFSP undertakings)
and the member states (which rarely want to spend
more money on EU-related activities).
CFSP is plagued by a lack of political will by
some govemments (such as the British) to put
flesh on the CFSP bones. Other member states
(such as Germany) are more inclined to make
CFSP work despite preferring a more integrationist approach to cooperation that allows for
more active Commission involvement and majority voting. France appears ambivalent: on the one
hand, France wants to lead CFSP and the ESDI,
and it has the political will and military capability
to do so; on the other hand, France tends to "go it
alone" when it wants to take a foreign policy initiative outside the rubric of the CFSP, which infuriates fellow EU members and diminishes CFSP's
effectiveness and potential.
The EU's quest to act more consistently and
coherently in international politics, by fusing the
integrationist and intergovernmentalist tendencies,
has not met with success. The clash of foreign policy cultures in the run-up to and during the
1996-1997 intergovemmental conference (IGC)
put the development of CFSP on hold. In the aftermath of the IGC, despite the Amsterdam Treaty's
CFSP provisions, CFSP remains caught in a void
between the reality of its own weaknesses and tedious intergovernmental discussions about how to
redress those weaknesses.
Prospects for improving the functioning of
CFSP are not particularly good, although the Amsterdam Treaty changes some aspects of CFSP
that could help grease the axles of cooperation:
endowing the EU with a foreign policy planning
and analysis unit, designating the Council's secretary general to act as the CFSP High Representative, reconstituting the CFSP troika (to include the
Council secretary-general, the Commission president or a senior commissioner, and the Council

Common Market

president), deciding to fund CFSP as part of the

Community budget, facilitating use of qualified
majority voting to implement the joint actions
necessary to carry out CFSP "cornmon strategies,"
and introducing a flexible, "multiple speed" approach to enable members who oppose a particular CFSP activity to do so without blocking the
majority from proceeding. Such opposing states
would either abstain or support the majority in
principle but not in implementation. Indeed, it is
c1ear that the ESDI and future WEU actions will
be based on the aS5umption that not all EU members will be operationally involved.
Given the impending enlargement of the EU
to the east and south, pressure will grow on national governments to improve the functioning of
CFSP. However, even if CFSP flounders, the extensive foreign econornic and diplomatie policies
of the EC will continue to place the EU in a leadership position in the global political economy. If
CFSP realizes its full potential, the EU will be
able to translate its weight in the global economy
to a newfound influence in the international political system. From a U.S. perspective, the fate of
the New Transatlantic Agenda, conc1uded in December 1995 to translate U.S.-EU foreign policy
and functional cooperation into joint and coordinated actions, depends in large part on the ability
of the EU to meet its own expectations with regard
to CFSP and ESDI.
See also EURoPEAN POLmCAL COOPERATION.

Bibliography

Ginsberg, Roy H. 1989. Foreign Policy Actions 0/ the

European Community: The Politics 0/ Scale. Boulder: Lynne Rienner.
Hili, Christopher. 1995. "The Capability-Expectations
Gap, or Conceptualizing Europe's International
Role." Journal 0/ Common Market Studies 31, no. 3,
pp. 305-328.
Hili, Christopher, ed. 1983. National Foreign Policies
and European Political Cooperation. London: Allen
and Unwin.
Holland, Martin, ed. 1991. The Future 0/ European Political Cooperation: Essays on Theory and Practice.

London: Macmillan.
- - - . 1996. Common Foreign and Security Policy:
The Record 0/ Re/orms. London: Pinter.
Regelsberger, Elfriede, et al., eds. 1997. Foreign Policy
o/the European Union: From EPC to CFSP and Beyond. Boulder: Lynne Rienner.

-Roy H. Ginsberg

85

Common Market
The Treaty of Rome (1957) provided the legal authority for an act of econornic integration that was
to take the form of a common market. This was to
be the central feature of the European Econornic
Community (EEC) that now, following the Treaty
on European Union (TEU) of 1992, is officially
called the European Community (EC). This more
recent treaty seeks to add to the common market
features such as a single currency that would
transform the common market into an econornic
and monetary union (Swann, 1996).
A common market has two main dimensions,
one external and the other interna!. The external
dimension involves the erection of a common protective fence and other devices around the integrating states. The key external defense has been
the common external tariff (in treaty language the
common customs tarift), to which Articles 18-25
of the Treaty of Rome apply. On the face of it such
an arrangement appeared to breach the postwar
GATT code that forbade discrirnination in international tariff arrangements. The potential for discrirnination arose from the fact that trade among
the EC's original six member states (France, Germany, Italy, Belgium, the Netherlands, and Luxembourg) was to be free of customs duties, but
collectively they proposed to impose duties on
goods coming from third countries (e.g., the
United States). However, the GATT code provided
an escape c1ause that allowed for common markets (specifically the customs union element) as
long as the common tariff level was on average no
higher than the previous national tariffs. As the
original common tariff was based on a straight unweighted arithmetical average of the previous national tariffs, it escaped condemnation. Subsequently the level of this common protective fence
was lowered in international tariff negotiations,
specifically the Dillon, Kennedy, Tokyo, and
Uruguay Rounds of the GATT.
The EC established other forms of extern al
proteetion, inc1uding collectively negotiated import quotas such as the Multi-Fibre Agreements.
In addition, various national Voluntary Export Restraints continued to exist. These were finally
brought under Community auspices as part of the
1992 single market program. The EC also disposed of various protective devices, notably the
power to impose antidumping duties on unfairly
priced imports and the New Commercial Policy

86

Common Market

Instrument, adopted in 1984 to curb illicit trade

practices that affected EC exports as well as imports. When illicit practices were proved to exist,
the Council of Ministers could use various retaliatory actions, inc1uding increasing the level of import duties and applying import quotas.
Internally, under Artic1e 12 of the Treaty of
Rome the member states were obliged to remove
all customs duties on intra-Community trade in
goods. The original six member states accomplished this within aperiod of eight and a half
years, and new members, not already involved in
reciprocal free trade arrangements, have been
given from five to seven years within which to
adjust.
Member states were also obliged under Artic1e 12 to remove all charges equivalent to tariffs.
For example, the Italian govemment had been in
the habit of imposing a statistical levy on imports
and on exports. This the European Court of Justice
(ECJ) accepted was not a customs duty as such,
but acharge equivalent thereto, which therefore
had to be abandoned. Member states also had to
remove all quotas on intra-Community imports
and exports (Artic1es 30-35 applied). Additionally, they had to remove all measures equivalent to
quotas. This latter obligation was exemplified in
the famous Cassis de Dijon case. Here the German authorities had prevented importation of a
French liqueur on the grounds that German law
banned the sale of liqueurs of less than 32 percent
alcoholic content (exceptionally the threshold
could fall to 25 percent). Cassis had a content of
15 to 20 percent. The ECJ rejected Germany's
ban, which was not a quota as such but was what
Artic1e 30 of the Rome treaty meant by a measure
equivalent to a quota: indeed it had the effect of a
zero quota. The Cassis and subsequent cases
helped to establish a couple of key principles:
goods legally marketed in one member state
should be freely admitted to the markets of other
member states, and refusals could only be based
on mandatory requirements such as consumer protection and public health, as the protection of
those interests was regarded as being justified.
Moreover, such restrictions had to be the essential
guarantee of the interest that was being protected.
An element of proportionality thus arose. In the
Cassis case the ban was disproportionate because
mere information on the label as to alcoholic content would have sufficed to protect the innocent
consumer.

The Rome treaty complemented these provisions for free internal trade in goods with provisions designed to provide freedom to supply services. Thus suppliers of, for example, insurance
and banking services should be free to supply
them across frontiers and barriers, and discrimination should be eliminated (Artic1es 59 to 66).
However, the removal of tariffs, charges equivalent to tariffs, quotas, and measures equivalent to
quotas, together with the call for freedom to supply services, was recognized as being insufficient
to provide for a free and undistorted flow of trade
in goods and services between member states. The
Rome treaty acknowledged that various nontariff
barriers (NTBs) would still exist and would stand
in the way of a single market; it therefore made
provision for dealing with such problems. Although considerable efforts were devoted to dealing with the NTB problem (and with other inhibitions relating to services and factors of
production), only limited progress was made. It
was primarily for this reason that the Single European Act of 1986 modified EC decisionmaking
powers concerning the harmonization process and
comrnitted the Community to a program of single
market completion by the end of 1992.
Under Artic1es 85-90 of the Treaty of Rome,
the Commission has the task of rooting out antitrust restrictions that could compartmentalize national markets and inhibit cross-frontier competition (Swann, 1995). Artic1e 85 prohibits cartels
that restrict competition in the common market
and affect interstate trade. Incidentally, this law
has an extraterritorial jurisdiction. Cartels may be
exempted if in particular they have an improving
effect and consumers share in the benefit. This law
applies to public as weIl as private enterprises.
The Comrnission has been endowed with appropriate enforcement powers, inc1uding a capacity to
fine. Decisions to prohibit (or approve) cartels initially lie with the Commission, but provision is
made for appeals to the ECJ.
The Commission also has the power under
Artic1e 86 to attack dominant firms that abuse
their market power and affect interstate trade. The
Comrnission has successfully attacked dominant
firms that, for example, have been engaged in
predatory pricing, have employed fidelity rebates,
and have forec1osed supplies of essential materials
to competitors. Whereas the Paris treaty of 1951,
establishing the European Coal and Steel Community, did provide apower to ban anticompetitive

Common Market

mergers, no similar power was explicitly provided

by the Rome treaty. However, in 1989, as a logical
accompaniment to the single market program, the
Council of Ministers conferred a merger-controlling power on the Commission. Only the largest
mergers are caught.
Under Articles 30 and 59 (the former banning
quantitative restrictions and the latter relating, as
we have seen, to freedom to supply services), the
Community has sought to deal with discrimination in relation to public procurements. Since
about 15 percent of all spending in EC states is
govemment spending on goods and services, and
since govemments have been prone to favor the
home-produced variety, it has been necessary to
deve10p codes of practice that impose a requirement that public procurement must be nondiscriminatory. Rules have been introduced setting
out the public purchasing principles to be applied
in respect to public works and public supply contracting, public utility purchasing, and the public
purchasing of services. Additional provisions have
been made for legal redress at the national level
when the rules are flouted.
State aids (subsidies) are expressly forbidden
under Artic1es 92 to 94 where competition is distorted and an effect on interstate trade arises. The
concept of a level playing field for competition is,
however, subject to qualifications. State aids of a
social character are expressly exempted, and other
forms of state aid may be exempted. These latter
inc1ude aids for regional development, aids to particular economic sectors, and aids to support a
project of common European importance (as, for
example, a tunnel under the Alps). The task of vetting such subsidies falls to the Commission, which
must be notified of state aids in advance. In assessing regional aids, for example, the Commission assesses the scale of the proposed regional
assistance in relation to the severity of the local
problem, for example, the level of unemployment
and income per capita in the problem region. The
Commission can ban aids, and following the TEU,
financial sanctions can be imposed on states that
fail to comply with regional aid rulings.
The Community has also had to deal with the
problem that differing national standards in respect to the design and composition of foodstuffs,
consumer durables, and so on have the effect of
compartmentalizing the common market, since
goods that meet the standards of member state A
may not satisfy those of member state B. The orig-

87

inal approach was to employ Artic1e 100, which

allows the Council to harmonize national standards, that is, to produce a Community standard.
Goods satisfying the latter would therefore be
readily acceptable in all states. However, this
proved to be a tedious business, and recently increasing use has been made of mutual recognition
of existing national standards.
The Community has addressed the problem
of indirect taxes that impact on goods and services
and can give rise to an NTB problem. The Community's approach has been to select the valueadded tax (VAT) as the model tumover tax structure for the common market, since it does not
artificially distort industrial structures and facilitates the detection and prevention of illicit export
subsidies. Cross-border shopping still gives rise to
distortions, but ultimately the aim is to harmonize
VAT rates. This latter problem will then disappear,
and goods will be exported bearing VAT. In the
medium term the aim is also to harmonize excise
duty structures and rates, that is, taxes on alcohol,
tobacco, and so forth.
The free market for goods has been complemented by steps to establish a freedom to supply
services in sectors such as insurance and banking.
Here, as elsewhere, the inhibiting factor has been
govemment regulation. In banking, for example,
standards of prudential regulation varied, and this
stood in the way of banks' establishing branches
in other member states. The approach in banking
was to adopt uniform minimum regulatory rules.
As a result, a bank satisfying these requirements
in member state A would be free to set up
branches in other member states without any further licensing being required.
In parallel with the free movement of goods
and services, the EC has taken steps to provide for
the free movement oflabor (Artic1es 48 to 51) and
has accompanied this by enabling measures such
as the transferability of social security entitlements. In the past, the mobility of professional
persons has been impeded by regulatory factors,
such as differing national professional qualifications and variations in the type and length of training. Here again the harmonization process has
come to the rescue, sometimes on a single profession basis and sometimes in ways that take in a
broad spectrum of professions. The free movement of capital (now govemed by Artic1e 73) was
given a significant boost in 1988 when it was
agreed that exchange controls should be abol-

88

Common Organization of the Market (COM)

ished. Some distortions eould, however, still arise

from differing national rates of eorporation profits
tax. The Rome treaty (Articles 52-58) also provides for entrepreneurs to set up produetive operations in other member states (this is referred to as
the right of establishment). Again, national regulation had proved to be the main obstacle. Thus the
ability of a UK nonlife insuranee eompany to set
up business in, say, Germany was only possible
when the Community had agreed on uniform mIes
in respeet to insuranee eompany reserves and margins of solveney.
See also COMMON COMMERCIAL POLICY;
COMPETITION POLICY; GENERAL AGREEMENT ON

eil is responsible for defining prineiples and general guidelines; within these guidelines, the Couneil mayadopt eommon positions (by unanirnity).
Sinee the CFSP beeame operational, the Council
has adopted approximately thirty CFSP eommon
positions, mostly dealing with eonfliet or erises
around the world (e.g., Bumndi, Haiti, Serbia,
Rwanda, and Nigeria). Many CFSP eommon positions are taken in aeeordanee with UN Seeurity
Council resolutions.
See also COMMON FOREIGN AND SECURITY
POLICY; DECISIONMAKING PROCEDURES.

TARIFFS AND TRAnE; SINGLE MARKET PROGRAM.

Common Technlcal
Regulations (CTRs)

Bibliography
Swann, Dennis. 1995. The Economics oi the Common
Market. Harmondsworth: Penguin.
- - . 1996. European Economic Integration. Cheltenham: Edward Elgar.
Swann, Dennis, ed. 1992. The Single European Market
and Beyond. London: Routledge.

Common Teehnieal Regulations (CTRs) are

mandatory norms developed by the European
Teleeommunieations Standards Institute (ETSI) as
a means of harmonizing teleeommunieations standards in the EU.
See also REGULATORY POLICY.

-Dennis Swann

Common Organlzatlon of the

Market (COM)
Based on Article 40 of the Treaty of Rome, the
eommon organization of the market (COM) is a
key element of the Common Agrieultural Poliey
(CAP). The COM refers to how the CAP operates
and is the basis for the European Agrieultural
Guidanee and Guarantee Fund (EAGGF), the
CAP's funding meehanism.
See also COMMON AGRICULTURAL POLICY.

Common Position
There are two main types of eommon position in
the EU. First, with respeet to legislative deeisionmaking, under the eooperation (Article 18ge) and
eo-deeision (Article 189b) proeedures a eommon
position is a provisional Couneil of Ministers' deeision on the basis of a Commission proposal and
the European Parliament's opinion of that proposal. Parliament may demllIld amendments to a
eommon position and may rejeet the proposed
measure if not satisfied with the Couneil's response.
Seeond, with respeet to the Common Foreign
and Seeurity Poliey (CFSP), the European Coun-

Commonwealth of Independent
States (CIS)
In 1992 the Couneil ofMinisters approved a mandate for the Commission to negotiate Partnership
and Co operation Agreements (PCAs) with republies of the Commonwealth of Independent
States (CIS), a loose organization linking most of
the former Soviet republies. The PCAs were designed as sueeessor agreements to the Trade and
Cooperation Agreement (TCA) that the EC had
signed with the USSR in Deeember 1989 and
whose terms were extended to EC relations with
individual republies after the eollapse of the
USSR in Deeember 1991.
PCAs are in effeet eounterposed to the negotiation of association agreements (known as Europe Agreements) that the EU has negotiated with
the Central and Eastern European states (CEES)
and the Baltie States and that offer signatories the
possibility of eventual aeeession to the EU. But
like the Europe Agreements, the PCAs are soealled mixed agreements eovering both national
and Community seetors of eompetenee. As a result, they must be ratified both at EU level and by
the member states at national level.
The eonsequent delay before PCAs are ratified and eome into foree has led the EU to offer
interim agreements to PCA signatories. These

Commonwealth of Independent States (CIS)

cover only matters of EU competence and therefore do not require ratification by member states.
Areas covered by the interim agreements usually
include all the PCA provisions on market access
for goods, competition, and dispute settlement.
Provisions for political dialogue, the establishment of businesses, and investment are not included, but in some cases separate specific agreements on political dialogue have been made
between the EU and individual republics.
Although some of its provisions are superseded by the interim agreements, the 1989 TCA
signed by the EC and the USSR (but now operable
with the former Soviet republics) continues to
playa significant role. The TCA remains the basis
for links in the field of economic cooperation and
provides an intergovernmental monitoring institution-the Joint Committee-involving the EU and
the partner state, which should meet once a year.
The PCAs require signatories to commit
themselves to principles of human rights, democracy, and a capitalist economy and contain clauses
allowing one party to suspend the PCA unilaterally in the event of that party's considering the
other to be violating any of these principles. At the
same time, PCAs do not entail the EU's recognizing the PCA state as a market economy and therefore do not require the EU to apply GATT rules to
trade disputes.
The PCAs envisage structured, regular political dialogue between the EU and PCA states both
at the highest ministerial level and at civil servant
and parliamentary levels. The highest-level Cooperation Council should meet at ministerial level at
least onee a year. PCAs also offer the mutual
granting of most-favored-nation status and the
progressive elimination of trade barriers in manufactured goods between both sides. National rights
are to be accorded to those investing in and establishing companies in each other's territory. The
PCAs also envisage a comprehensive protection of
intellectual property rights. The movement of persons between both parties is to be left to agreements between individual national govemments
on both sides. Special arrangements outside the
main terms of the PCAs are to be made for trade
in nuclear materials, coal and steel, and textiles.
The agreements can also include clauses on financial cooperation and assistance.
The EU first negotiated PCAs with Ukraine,
Russia, Kazakhstan, and Belarus; negotiations
with Moldova and the three Caucasian republics

89

followed. Progress has been slowest with the Central Asian Republics to the south of Russia and
Kazakhstan. With Mongolia, the EU has a Trade
and Cooperation Agreement and a Technical Assistance for the Commonwealth of Independent
States (TACIS) aid program, but no PCA negotiations have taken place.
Thanks to Russian pressure, the EU's PCAs
with both Russia and Ukraine envisage the possibility of a free trade regime's being established
between the EU and these countries either through
the partner countries ' accession to the World
Trade Organization (the successor to the GATT)
or through adecision to open negotiations on a
free trade area in 1998-whichever comes first.
Initiating such negotiations would depend upon
the extent of progress so far in implementing the
PCA and in Russia's transformation into a capitalist market economy. A similar provision for a possible negotiation of a free trade regime was included in the PCA with Belarus.
Because the PCAs with Russia and Ukraine,
signed in the summer of 1994, had not been ratified
on the EU side eighteen months later, the interim
agreement with both countries came into force on
February 1, 1996. This agreement allows for better
EU access to important markets for specific products such as cars and beverages, the curtailment of a
range of quantitative import restrictions against EU
products, and the reinforcement of the protection of
intellectual property rights. For Russia and
Ukraine, some quantitative restrictions against their
imports and some moderation in the EU's use of
antidumping instruments were hoped for.
The European Parliament (EP) protested
strongly in February 1996 because it was not consulted before implementation of the interim agreement with Russia. The EP now demands that it be
consulted before all such interim agreements with
other countries are implemented by the Council
and the Commission.
After Belarus and the EU signed a PCA in
March 1995, an interim agreement was initialed
swiftly in April of that year. But the signing of the
interim agreement was then delayed until late
March 1996 because of EU concems about human
rights violations within Belarus. Following elections in Belarus, the EU decided to sign the interim agreement on the grounds that failure to do
so would increase the isolation of Belarus and
strengthen the opponents of systemic change
there. But at the same time the EU stipulated that

90

Community Action Program in Education and Training for Technology (COMETT)

this interim agreement would, unusuaHy, need to

be approved by member states as weH as by the
EP and the Belarus parliament. However, this requirement was later dropped, and in July 1996 the
EP's external relations committee recommended
approval of the interim agreement, despite the fact
that in May and June 1996 the EP had adopted
critical resolutions on respect for human rights in
Belarus. But the EU still held back because of
concerns about Belarus internal affairs, in particular the reduction in the role of parliament there.
In the case of Kazakhstan the gap between
the signing of the PCA and decisions by the EU
General Affairs Council to proceed with the conelusion of an interim agreement was even longer:
from January 1995 when the PCA was signed, to
May 1996 when the decision was taken to conelude an interim agreement. The main cause of
this delay was concern within the EU following
the Kazakhstan govemment's suspension of parliament in 1995.
The PCA with Moldova was signed on November 28, 1995. The main problem delaying an
interim agreement during the first months of 1996
was the EU's insistence on International Monetary
Fund (IMF) confirmation that the economic and
financial reforms started there were making satisfactory progress. The IMF's approval led to the
conelusion of the agreement in April 1996 and its
implementation on May 1, 1996.
PCAs with the three republics of the Caucasus (Georgia, Armenia, and Azerbaijan) were initialed in December 1995, but progress toward interim agreements with Georgia and Armenia was
delayed by the fact that both countries were in arrears in debt repayment to the EU.
Negotiations beg an on a PCA with Uzbekistan in early 1996 after the General Affairs Council approved the Commission's view that the republic had made adequate progress in democratic
development. Negotiations were concluded
swiftly, and the treaty was signed in June 1996.
With Kyrgyzstan, negotiations on a PCA were
coneluded at the start of 1995, but the Kirgiz government pulled back from signing the agreement.
Discussions on renewing cooperation took place
when External Affairs Commissioner van den
Broek visited Kyrgyzstan in September 1996. The
government of Turkmenistan rejected elose discussions with the EU. Tajikistan has been plunged
in civil war for several years, and there have been
allegations of massive violation of human rights.

Only one of the CIS republics, Ukraine, has

consistently refused to accept its PCA as an adequate long-term framework for its relations with
the EU. Since Ukraine's deelaration of independence in 1991, successive govemments have deelared their goal of eventual accession to the EU.
Ukrainian President Leonid Kuchma has repeatedly called for an association agreement with the
EU as a step toward full membership (along the
lines of the Baltic states' relationship with the
EU). By the same token, Ukrainian governments
have consistently rejected the notion that the CIS
is a viable or legitimate framework for supranational integration.
These overtures have not had a positive response from the EU. Although some EU member
states (and also the Uni ted States) have urged
greater Ukrainian integration with Western Europe, neither Germany nor the EU's supranational
institutions have indicated any readiness to move
in the direction of establishing eloser ties with
Ukraine than with other PCA signatories.
See also RUSSIA.

-Peter Gowan

Communlty Action Program In

Educatlon and Training tor
Technology (COMETT)
The Community Action Program in Education and
Training for Technology (COMETI) is a program
to enhance the quality of education and training in
the high-technology sec tor. COMETT I
(1986-1994) led to the creation of 200 universitycompany training partnerships, the organization of
almost 40,000 transnational placement schemes
for students and graduates, and 10,000 advanced
training courses involving 250,000 people.
COMETI 11 was launched in 1995 under the auspices of the LEONARDO DA VINCI umbrella
program for vocational training.
See also EDUCATION, VOCATIONAL TRAINING,
AND YOUTH POLICY.

Communlty Agencles
In addition to its institutions and organs, the EU
has a plethora of specialized agencies-ranging
from service providers to think tanks-spread
throughout the member states. In many cases the
rationale for establishing these agencies was to

Competence 91
satisfy national sensitivities and to encourage decentralization, not to meet legitimate needs such
as better management and control of EU policies
and programs. Such practical problems as recruitment procedures and remuneration for agency employees and such political problems as adequate
supervision remain unresolved; as a result, the
agencies' status and accountability are uncertain.
The agencies' location (a highly contentious issue
between the member states) was finally resolved
at a special summit in Brussels in October 1993.

Community Support
Frameworks (CSFs)
As part of a radical reform of structural policy in
1988 to promote social and economic cohesion in
the EC, the Commission introduced a number of
new principles and procedures and strengthened
existing ones. In order to encourage elose consultation and cooperation between the Commis sion,
member states, and regional or local bodies at all
stages of a structural program, the Commission
now requires eligible member state plans for development assistance to be incorporated into
Community Support Frameworks (CSFs): contractual agreements between the Commission, national authorities, and regional authorities. CSFs
set out the program's priorities, type of aid, methods of financing, and so on. Structural policy reform also involved a major switch from project-related assistance to program assistance and
decentralized management, thereby putting the
emphasis on planning and continuity rather than
on ad hoc activities. Under the old system the
Commission dealt with thousands of separate projects; now the Commission oversees a much
smaller number of CSFs.

Community Trademark
Office (CTMO)
As part of the single market program, under the
general heading of removing technical barriers to
trade, the Commission proposed a number of directives dealing with various aspects of intellectual
property rights, ineluding a proposal to create a
Community trademark valid in all member states
and a Community trademark office (CTMO) to
manage the Community trademark. But legislation
establishing the trademark office, first introduced
in 1987, was derailed by nonsubstantive and seem-

ingly intractable disputes, first over the location of

the office itself and then over the working languages to be used. Eventually, following a political
package deal negotiated at the special Brussels
summit in October 1993 on the location of EU institutions and agencies, the CTMO opened in Alicante, Spain, in 1996. Officially, the CTMO is
called the Office for Harmonization in the Internal
Market: Trademarks, Designs, and Models.

Company Law
Artiele 58 of the Treaty of Rome empowers the
EC to act in the field of company law in order to
coordinate safeguards required by member states
of companies or [ums, with a view to making such
safeguards equivalent throughout the Community.
Company law directives adopted in the 1960s and
1970s sought to approximate member-state law to
allow maximum freedom of movement for enterprises. As part of the single market program, the
EC attempted to go beyond that and establish a
framework for regulating crosscborder corporate
activity. As with other single market legislation,
one of the EC's objectives was to increase the
competitiveness of European firms by allowing
them to become larger and more efficient.
Thus, the Commission' s 1985 white paper proposed a number of directives in this area. Measures
adopted by the end of 1992 ineluded a regulation
defining the European Economic Interest Grouping
(BEIG), a legal entity created to accommodate firms
or other associations wanting to pool their resources
for a common goal but not wanting to merge (Airbus is perhaps the best-known example); the
eleventh company law directive (diselosure requirements for branch operations); the twelfth directive
(single-member companies); and transparency in
major holdings in company capital. The Commission had far less success with the remainder of the
program. Faced with mounting employer and member-state opposition, the Commission eventually
made a virtue of necessity and declared a number of
company law directives, dealing with issues such as
takeover bids and accounting, "nonpriority" for the
creation of the single market.

Competence
Competence means the EU's responsibilities and
scope of authority. Although the EU's competence
is set out in the treaties, in some cases it is uncer-

92

Competition Policy

tain or ambiguous, and in other cases it is

"mixed," that is, there is a division ofresponsibility between the EU and its member states. No explicit distinction is drawn anywhere in the Treaty
of Rome in legal terms between exclusive and
nonexclusive competence. However, the European
Court of Justice has tended to take the view that
the EU enjoys full competence in the pursuit of
the objectives of the Rome treaty and that "flanking" policies, such as environmental or labor market policies, are too closely linked to the achievement of those objectives, notably the creation of
the single market, to be anything other than virtually exclusive, too. External economic relations is
an ambiguous area, with the EU and its member
states sometimes uneasily sharing competence.
For instance, the member states-not the EU-are
members of the World Trade Organization, but under the terms of the Common Commercial Policy
the Commission negotiates commercial agreements on behalf of the EU as a whole. Territorial
problems relating to competence can arise during
negotiations themselves, and especially during the
ratification stage.

Competition Policy
EU competition policy has two goals: to create
and thereafter sustain the Community's single
market and to ensure that competition is the driving force of the Community's economy, with
companies allocating resources on an independent
basis and striving for competitiveness in domestic
and world markets. Competition policy may be divided into five categories, identified by reference
to the legal provisions concerned: (l) restrictive
practices (Article 85 of the Rome treaty); (2)
abuses of dominant position (Article 86); (3)
merger control (Regulation 4064/89); (4) state
monopolies, public undertakings, undertakings
with special or exclusive rights; and (5) public service obligations (Article 90) and state aid (Articles 92-94).

Restrictive Practices
Article 85 is divided into three paragraphs. The
first sets out the basic prohibition of agreements,
concerted practices, and decisions between undertakings that have as their object or effect the
prevention, restriction, or distortion of competition and that may affect trade between member
states. (The criterion of effect on trade between

member states, which need be only potential or

indirect for Articles 85 and 86 to apply, is a jurisdictional requirement. So is the rule that the
agreement, and so on, must be implemented in
the Community for the Community rules to apply.) Under the second paragraph, such arrangements are null, void, and unenforceable. The third
paragraph provides conditions under which exemptions may be granted.
Like most systems of competition policy, the
Community's law and practice distinguish between horizontal and vertical issues. Horizontal
restrictions of competition between rivals for the
development, production, distribution, or sale of
competing goods or services are usually treated
severely, particularly where prices or output levels
are fixed or markets shared. The full range of the
Commission's fact-finding and fining powers are
brought to bear on such cases. However, Community competition law is not criminal law, and the
sanctions available are civil: nullity of agreements, fines imposed on the undertakings, risk of
action for damages in national courts. Some horizontal restraints, such as those involving small or
medium-sized undertakings, are allowed, and
there are block exemption regulations in force for
agreements relating to research and development
and specialization as weIl as special rules in the
transport industries.
Vertical restraints occur in the chain of relationships bringing a particular product or service
from conception, research, development, and production to the distribution process and ultimately
to the consumer. The Community's policy against
price restrictions in the vertical chain is similar to
most other systems, but its severity toward territorial restrictions imposed by a producer on distributors is greater than that found in other jurisdictions. This is largely because of the Community's
goal of market integration. Many distribution systems are still conceived in terms of individual national territories within the EU (often for legitimate reasons related to differences of language,
law, and consumer habit from one country to another), and territorial limits on resale tend to maintain national borders and frustrate Community citizens' enjoyment of the benefits of a single
market. The right to engage in and benefit from
parallel trade, that is, sales from one member state
to another that bypass the producer's chosen distribution channels, is fundamental in the Community's competition law.

Competition Policy

Pursuant to Council regulations, only the

Cmnmission may grant exemptions under Article
85(3) in individual cases in respect to agreements
of which it is notified. The Council may grant
block exemption to a category of agreements but
usually empowers the Commission to do so by
means of enabling regulations. Block exemption
regulations have been enacted for the following
categories of agreement: exclusive distribution,
exclusive purchasing, specialization, research and
development, insurance, shipping consortium,
various air transport, and technology transfer.
Agreements of minor importance do not fall
under Article 85(1) as they do not appreciably affect competition within the common market. This
de minimis mle applies to agreements between undertakings that fulfill the market share and
turnover criteria of the Commission's notice on
agreements of minor importance.
The Commission pursues a strict policy
against price fixing and market sharing. Heavy
fines are usually imposed in such cases. Article
85(3) has been applied in individual cases and by
means of legislation to whole categories of agreement to authorize, and thus indirectly to encourage, cooperation between companies in such areas
as research and development, intellectual property
licensing, and distribution. Although the burden of
enforcement falls mainly on the Comrnission, national courts have an important part to play in
Community competition law enforcement, and national competition authorities are also likely to
playa greater role in the years to come in the application of the Community's competition law.
Abuse of Dominant Position
The key to competition policy analysis in most
cases is market definition. It is particularly important in respect to Article 86 (abuse of dominant
position), in which market definition comprises
two elements: the relevant product (or service)
market and the relevant geographical market.
Once the market is defined, an assessment
may be made of possible dominance. There is a
rebuttable presumption of dominance above 50
percent market share. The abuse of a dominant position, which may be held by one undertaking or
several collectively, is the reprehensible conduct
prohibited by Article 86. Abuses of dominant position are prohibited in so far as they may affect
trade between the Community's member states.
Abuses are usually divided into two main cate-

93

gories: exclusionary and exploitative. Examples of

abuses include tying, excessive and predatory
pricing, refusals to supply, and extension of market power to another market.
Merger Control

Merger control is the newest addition to the Community's competition policy. Regulation 4064/89
came into force in September 1990, and since then
a body of case law and precedent has been built up
by the Comrnission. The arrival of the merger regulation has filled the last great gap in the Community's competition policy.
The administration of the regulation has been
a success. The Community is in a transitional
phase from national markets to a single, integrated
market, and since the system established by the
regulation calls for notifications on the basis of
turnover thresholds rather than market power, it is
not surprising that most mergers reported to the
Comrnission have been approved. Between September 21, 1990, when the merger regulation entered into force, and June 30, 1996, the Comrnission received 477 notifications, of which 16 were
later withdrawn. The second phase of detailed investigation was opened in 26 cases. Fourteen of
these were approved subject to conditions, and 5
were prohibited.
Public Authorities

The issues of competition policy discussed so far

relate to the activities of companies. There can be
no doubt, however, that public authorities also
have a major impact on competitive conditions in
the modern European economy. This is not a discovery of the 1980s. The Treaty of Rome provided
from the outset a number of competition mIes addressed to member states.
Article 90(1) provides that "In the case of
public undertakings and undertakings to which
Member States grant special or exclusive rights,
Member States shall neither enact nor maintain in
force any measure contrary to the mIes contained
in this Treaty, in particular to those mIes provided
for in Article 7 [now Article 6] and Articles 85 to
94." Article 6 prohibits discrimination on grounds
of nationality within the scope of the EC treaty.
Articles 85 to 94 contain the Community's competition mIes. Article 90(2) provides further that
the treaty, and in particular its competition mIes,
applies to undertakings entrusted with the operation of services of general public interest or hav-

94

Competition Policy

ing the character of a revenue-producing monopoly, in so far as the application of such rules does
not obstruct the performance in law or in fact of
the tasks assigned to them. Moreover, the development of trade must not be affected to such an extent as would be contrary to the interests of the
Community. Finally, Artic1e 90(3) provides that
the Commission shall ensure the application of
Artic1e 90 and shall, where necessary, address appropriate directives or decisions to member states.

StateAid
The Community's competition policy would be
incomplete without provisions on state aid. All the
efforts in the world to ensure that companies do
not distort competition would be to no avail if
public authorities or entities under their control in
the member states were allowed to seek to outspend each other in offering subsidies to attract investment or favor a company or group of companies in their respective territories. A subsidy spiral
wastes resources, and competition in the Community should be between companies vying for customers, not between the finance ministers and taxpayers of each member state. Furthermore, the
Community's goals of economic and social cohesion and convergence between national economies
and living standards would be greatly undermined
if the richer nations of the Community were able
to use their greater wealth to give their companies
unfair advantages over the others.
The Commission's state aid policy, built on
the rules set out in Artic1es 92 and 93 of the EC
treaty, distinguishes between subsidies that further
a legitimate policy goal (e.g., regional development, environmental protection, promotion of
small and medium-sized companies, research and
development) and those that distort competition
between member states without any redeeming
features. The notion of state aid inc1udes sub sidies, tax advantages, and investments from the
public purse on nonmarket conditions.

Internationallssues
In the international arena, the Commission seeks
to ensure that the EU's trading partners follow the
same basic roles. Thus, competition roles are at
the heart of the European Economic Area agreement and are to be found in many other agreements conc1uded by the Community. An example
is a 1995 Community agreement with the U.S.

govemment that provides for cooperation between

the Commission and the U.S. Justice Department
and Federal Trade Commission. A network of
agreements containing competition provisions
similar to those of the EC treaty has been conc1uded with the countries of Central and Eastern
Europe and the Mediterranean basin. The GATT
contains new roles on subsidies, and the World
Trade Organization is expected to take up trade
and competition issues soon, on the basis of an
initiative taken by the EU.

Assessment
Competition policy is part of the effort to meet the
challenge of creating a single market and achieving the Community's goals. The various aspects of
competition policy discussed above form one policy designed to open markets and to give companies opportunities to compete with each other. European consumers benefit from this rivalry, and the
competitiveness of European industry is enhanced.
The Commission has overall responsibility
for the development of the Community's competition policy and plays the primary role in enforcing
its competition law. Enforcement activities are
carried out in compliance with a complex set of
roles of procedure designed to provide for efficient prosecution and respect for the rights of the
defense (due process). The Court of First Instance
and the European Court of Justice (ECJ) play key
roles in hearing appeals against Commission decisions. The courts of the member states also enforce many of the competition roles, and their references to the ECJ for a preliminary roling under
Artic1e 177 of the EC treaty also give rise to an
important body of case law. The Community's legal system contains many terms of art and a certain amount of less formal insider's jargon: it is always important to remember that Community
English is a legallanguage in its own right (as are
other officiallanguages). For example, the words
undertaking or agreement in Artic1e 85 cannot be
understood by reference to a dictionary or their
meaning in any other legal system that uses the
English language.
The Community's competition policy is different from similar domestic systems because it seeks
to integrate the markets of the member states into a
single market as weIl as to pursue the usual concerns of consumer welfare and industrial competitiveness. The Community system today is charac-

Compulsory Expenditure

terized by centralization in the hands of the Commission and extensive application of Article 85(1),
leading to widespread recourse to the exemption
mechanism under Article 85(3), which only the
Commission can deploy in individual cases. This
state of affairs is criticized in some quarters, and
there are calls for the introduction of more economic analysis and a "rule of reason" approach in
Article 85(1) and for decentralization of enforcement to the national authorities. However, the treaty
clearly provides for a two-stage analysis whereby
restrictions of competition are identified under Article 85(1) and allowed only if the tests in Article
85(3) are met, and it is still the case that the often
Europe-wide analyses called for in even apparently
simple competition cases are best carried out by a
European body with the necessary jurisdictional
and fact-finding powers. Root and branch reform is
therefore unlikely, although modernization of many
features of the system is certainly under way.
The merger control system is young and generally judged a success, although the distinction
between concentrative and cooperative joint ventures (the former subject to the merger regulation,
the latter to Article 85) has proved difficult. The
Commission has proposed a legislative amendment that will resolve much of this difficulty by
bringing full-function joint ventures within the
procedures of the merger regulation and applying
the dominance test to the structural core of the
joint venture and Article 85's test to the effects of
the joint venture on independent activities remaining outside it.
The state aid rules are gradually being codified, and their procedural aspects are undergoing a
perhaps overdue process of clarification at the
hands of the Court of First Instance. This is an
area where legislation is probably needed to lay
down a procedural regulation and set up a system
of block approvals building on the less formal
guidelines, frameworks, and notices issued by the
Commission over the years. However, the fact that
the member states, wh ich are the key parties in
state aid procedures, are also the legislators in the
Council has made the Commission traditionally
reluctant to venture down the legislative path.
The Commission has been able to deal effectively with the Article 90 aspects of state intervention in the economy and the drawing of the delicate line between the exceptions to competition
principles that are needed in order to provide pub-

95

lic services of general economic interest and the

exceptions that embody se1fish promotion of national monopolies and other champions-for example, in the successive stages of telecommunications liberalization. This success is because the
treaty gave the Commission powers to issue decisions and directives in individual cases or generally by virtue of Article 90(3).
Challenges for the future include the ongoing
efforts to modemize and explain various features
of the Community's competition policy. For exampIe, several of the block exemption regulations refeITed to previously expire soon. Green papers for
discussion are being or have been issued on vertical restraints and horizontal cooperation agreements; the merger control regulation is being revised after a green paper exercise. Doubtless other
initiatives will be designed to complete and refine
competition policy for the twenty-first century.
See also COMMON MARKET.
Bibliography
Commission. 1994. Competition Law in the European
Communities. Vol. IA, Rules Applicable to Undertakings. Luxembourg: Office for Official Publications of tbe European Comrnunities.
Commission. Report on Competition Policy. Luxembourg: Office for Official Publications of the European Comrnunities, published annually.

-Jonathan Faull

Competltlveness Advlsory
Group (CAG)
Commission president Jacques Santer established
the Competitiveness Advisory Group (CAG) in
1995 to advise the European Council on competitive issues before each summit. The group was
formed at the prompting of the European Round
Table of Industrialists (ERT), a high-level industrialists' lobby, and includes several ERT members, academics, former political leaders, and
trade unionists.

Compulsory Expendlture
Compulsory expenditure is one of two categories
of EU expenditure (the other is noncompulsory
expenditure). The distinction between the two is
based on the treaties: compulsory expenditure results necessarily from treaty commitments or from

96

Concentric Circles

acts adopted in accordance with with the treaties.

For example, the Common Agricultural Policy
(CAP) is a treaty commitment, and spending on
the CAP (which accounts for more than half of
EU spending) is a compulsory expenditure.
See also BUDGET.

Concentrlc Circles
"Concentric circ1es" describes a form of differentiated integration in which countries form sets of
circ1es based on their level of participation in a
range of intergovernmental and/or supranational
activities. The circ1es center on a "core group" of
like-minded states that are committed to the highest degree of integration. A Europe of concentric
circ1es could form around France, Germany, and a
handful of other "core countries," with the next
circ1e comprising the other EU member states, and
an outer circ1e made up of the associated Central
and Eastern European states. Jacques Delors,
Commission president at the time of revolutionary
change in Central and Eastern Europe, proposed a
model of concentric circ1es as a means of organizing pan-European integration.
See also DIFFERENTIATED INTEGRATION.

Conciliation Committee
As part of the extremely complex co-decision procedure (Artic1e 189b procedure), a conciliation
committee, consisting of an equal number of representatives of the Council and the European Parliament (EP), can be convened if, at second reading
stage of the procedure, the positions of the Council
(usually acting by qualified majority vote) and the
EP (acting by a majority of its members) diverge.
If the committee agrees on a joint text, both the
Council and the EP must give their approval for it
to be adopted. If the committee cannot agree on a
joint text, the Council mayadopt it unilaterally, but
the EP, acting by a majority of its members, has the
power to veto the adoption.
See also DECISIONMAKING PROCEDURES.

Conference des organes

speclalises dans les affalres
communautalres (COSAC)
See

CONFERENCE OF EUROPEAN AFFAIRS COMMIT-

TEES.

Conference of European Affalrs

Commlttees (CEAC)
In an effort to irnprove interparliamentary cooperation in the context of a widening democratic deficit,
the European Parliament (EP) and national parliaments set up a Conference ofPresidents and Speakers of the Parliaments of the EU, which meets once
every six months. Going a step further, in 1989 the
presidents and speakers established a Conference of
European Affairs Committees (CEAC) of national
parliaments and the EP, also known by its French
acronym COSAC (Conference des organes spcialises dans les affaires communautaires). CEAC
meets once every six months, in the country holding the Council presidency. In 1991 CEAC adopted
specific mIes of procedure covering the duration of
meetings, their composition and organization, and
decisionmaking (unanimity by those present).
CEAC meetings are important political events that
are usually addressed by the prime minister and foreign minister of the country holding the Council
presidency and by commissioner!S. Largely because
of significant differences in national parliaments
over the importance and role of EU affairs committees in the overall parliamentary process and regarding the powers of these committees in relation
to those of specialist standing committees, CEAC's
potential is limited. Nor is CEAC's composition
representative, as most of the delegations do not
have a mandate from their respective assemblies.
Nevertheless several parliaments and governments
want to upgrade CEAC, especially in relation to the
principle of subsidiarity and the need to involve
parliaments (at the national or European level) in
the work ofthe EU's second and third pillars.
See also NATIONAL PARLIAMENTS.

Conference of Parllaments of
the European Communlty
See ASSIZES.

Conference of Presidents and

Speakers of the Parllaments
of the EU
In an effort to improve interparliamentary cooperation in the context of a widening democratic deficit,
the European Parliament (EP) and national parliaments set up a Conference ofPresidents and Speakers of the Parliaments of the EU, which meets once
every six months. But the conference is handi-

Constructive Abstention
capped in two ways. First, its potential is limited
because some presidents and speakers are not competent either to speak on political issues in an international arena or on behalf of their parliament. Second, although the presidents and speakers attach
great importance to interparliamentary control of
EU affairs, they cannot devote themselves to it as
much as they would like, owing to their other
commitrnents. Accordingly, in 1989 the presidents
and speakers set up another body, the Conference
of European Affairs Committees (CEAC) of national parliaments and the Ep, to pursue more vigorously interparliamentary involvement in the EU.
See also NATIONAL PARLIAMENTS.

Conference on Securlty and

Cooperatlon In Europe
See

RGANIZATION FOR SECURITY AND COOPERA-

TlON IN EUROPE.

Conference on Securlty
and Cooperatlon In the
Medlterranean (CSCM)
In 1990, Italy (then in the Council presidency)
proposed a Conference on Security and Cooperation in the Mediterranean (CSCM), along the lines
of the Conference on Security and Cooperation in
Europe (CSCE), to promote stability and confidence building in the Mediterranean region. The
proposal did not survive Italy's presidency but
contributed to the momentum that culminated in
the Euro-Mediterranean Partnership, launched by
the EU and the so-called MED 12 (southem
Mediterranean countries) at a conference m
Barcelona on November 28, 1995.

Confldence Pact on
Employment
In a speech to the European Parliament on January
31, 1996, Commission president Jacques Santer
proposed a Confidence Pact on Employment
among employers, trade unions, and govemments
to boost employment in the EU by irnproving the
single market, curbing state aid, strengthening education and training, and promoting small businesses. During the next three months, Santer toured
EU capitals, talking to employers and trade unions
to win their support, and held a roundtable conference in Bmssels in April with more than seventy-

97

five representatives of employers' and trade union

organizations. The confidence pact was mostly a
repackaging of existing macroeconomic strategy,
plus long-promised plans to complete the single
market. As part of his jobs initiative, Santer also
tried to persuade member states to allow surplus
EU funds to be diverted into the proposed TransEuropean Networks (TENs), multi-billion-dollar
road, rail, and telecommunication projects that
would become a symbol of EU public investment
as weIl as a means of strengthening communications links inside the single market. But national
govemments, led by Britain and Germany, refused
to back Santer's expensive TENs initiative at the
June 1996 Florence summit. Despite his apparent
abandonment of the TENs in late 1996, Santer continued to fight for his original action plan on employment, although employers and trade unions
were skeptical of the pact's usefulness. Santer's inability to secure TENs funding and engender enthusiasm for the confidence pact signaled a political
setback for the Commission president.

Congress of Europe
Several hundred influential Europeans met in the
Congress of Europe, in The Hague in May 1948,
to plan a strategy for European unity. The Council
of Europe emerged out of their deliberations.
See also COUNCIL OF EUROPE.

Consensus
Some decisions in the EU-especially those relating to the Common Foreign and Security Policy
and Cooperation on Justice and Horne Affairsrequire unanimity, or a consensus by all member
states. Although there has been a trend toward voting in the Council of Ministers in order to enact
legislation (institutional changes in the Single European Act and the Treaty on European Union
were definite moves in that direction), the Council
still likes, if possible, to reach a consensus. No
member state wants to be outvoted, and ministers
generally prefer to play by the old mIes, treating
the Council as a club rather than a legislature.
See also DECISIONMAKING PROCEDURES.

Constructlve Abstentlon
Constructive abstention is a proposed strategy by
means of which EU member states that are unwill-

98

Consultation

ing to support a Common Foreign and Security

Policy (CFSP) initiative can register their opposition to the proposed initiative while refraining
from voting against it, thereby allowing other
member states to proceed. As the EU increases in
size and diversity, active or constructive abstention may be a way for the intergovernmental
CFSP to get off the ground and not be hampered
by the misgivings of one or more member states.

Consultatlon
This is the oldest and simplest desisionmaking
procedure in the EU. It works as follows: the
Comrnission makes aproposal; the Council is the
sole decisionrnaker but must consult the European
Parliament (EP) and cannot act-as was made
clear in the 1980 Isoglucose case ruling by the European Court of Iustice-before the EP has issued
its opinion on the proposal. However, the EP cannot use its right to be consulted and to issue an
opinion in such a way as to exercise a veto, as it is
obliged to issue its opinion within a reasonable
time. Depending on the treaty article upon which
the proposal is based, the Council takes its decisions either unanimously or by qualitied majority
vote.
See also DECISIONMAKING PROCEDURES;
ISOGLucoSE CASE.

Consumer Pollcy

Consumer policy developed slowly and late in the

EU's history. The Treaty of Rome did not mention
it specifically, and the first consumer policy unit in
the Comrnission was established only in 1968 (in
the competition policy directorate-general). Tentative steps in the 1970s included the establishment
of a Consumer Consultative Committee (CCC)
made up of members of the four organizations
representing consumer interests at the European
level: the European Bureau of Consumers' Unions
(BEUC), the Comrnittee of Farnily Organizations
in the Community (COFACE), the European
Community of Consumer Cooperatives (EUROCOOP), and the European Trade Union Confederation (ETUC). Independent experts were also included in the CCc. In 1975 the Commission
devised with the CCC a program for consumer
protection and information, which was updated in
1981. The following year, the first Council of
Ministers devoted exclusively to consumer affairs

discussed directives on misleading advertising,

dOOfstep sales, and liability for defective products.
Inevitably, the launch of the single market
program focused attention on consumer policy.
Indeed, Article l00a of the Single European Act,
which provided for qualified majority voting on
single market legislation, stipulated that Commission proposals "concerning health, safety, and
environmental protection and consumer protection, will take as a base a high level of protection." In 1989, at the height of the single market
program, the EC launched an Independent Consumer Policy Service dealing with issues such as
consumer representation, product safety, and access to legal redress and with the integration of
consumer protection policies with other Community policies. A succession of Commission action
plans followed.
In keeping with the progressive development
of a European-Ievel consumer policy, the Treaty
on European Union (TEU) contained a new tide
(Article 129a) on consumer protection. This stipulated that "the Community shall contribute to the
attainrnent of a high level of consumer protection
through: (a) measures adopted pursuant to Article
l00a in the context of completion of the internal
market; (b) specific action which supports and
supplements policies pursued by the Member
States to protect the health, safety, and economic
interests of consumers and to provide adequate information to consumers."
Member states nevertheless were reluctant to
hand over responsibility to Brussels for consumer
protection, and the Comrnission, reeling from the
political impact of the TEU ratification crisis, was
reluctant to press the point. By the mid-1990s consumer groups regularly complained that the EU
was emphasizing competitiveness and subsidiarity
at the expense of consumer protection. The upgrading of the CCC into a Consumer Comrnittee
in 1994, ostensibly to promote a more effective dialogue between EU officials and consumer groups
and to ensure that consumers' views were taken
into account in the formulation of EU policies,
could not disguise the fact that consumer policy
was low on the EU's agenda.
Yet interest in consumer policy at the European level surged in 1996, during the bovine
spongiform encephalopathy (BSE) crisis, triggered by a British announcement of a possible
link between BSE (popularly known as mad cow
disease) and Creutzfeldt-Iakob disease, a human

Convergence Criteria
brain condition. Public reaction to the crisis and
criticism of the Commission's handling of it led to
a renewed emphasis in the EU on consumer policy. This, in turn, led to a showdown between the
Commission and the European Parliament on the
one hand, and the Council on the other, over parliamentary involvement in agriculturallegislation.
The battleground was a Commission proposal in
March 1997 that by the year 2000 beef would be
labeled with its country of origin. By introducing
the proposal under Artiele 100a, the Commission
sought to inelude the EP in the legislative process
in order to ensure that consumers' interests were
better represented. However, the Council considered the proposal under Artiele 43, the traditional
route for agricultural legislation, which exeludes
parliamentary scrutiny. This seemingly arcane
procedural dispute was symptomatic not only of
chronic tension between the EP and the Council
over EU decisionmaking but also of the growing
importance of consumer policy in the EU, which
received a further boost when the Amsterdam
Treaty amended Artiele 129a to give the EU
greater involvement in consumer protection.

Contact Group
The so-called contact group consists of senior
diplomats from Britain, France, Germany, Russia,
and the United States, who coordinate policy on
Bosnia and the other former Yugoslav republics.
The contact group was instrumental in brokering a
cease-fire in Bosnia in 1995 and in negotiating the
Dayton Peace Accords. The existence and relative
success of the contact group has raised concems
among tPose EU member states not represented in
it about whether Britain, France, and Germany are
pursuing a de facta Common Foreign and Security
Policy on their own.
See also COMMON FOREIGN AND SECURITY
POLICY; YUGOSLAVIA.

Convergence
Convergence refers to the approximation of levels
of economic performance in the EU, ideally toward a higher rather than a lower common denominator. Most EU policies promote convergence, and cohesion policy specifically aims to
elose the economic gap between the EU's rich
north and poor south. The policy of Economic
and Monertary Union ineludes nominal conver-

99

gence criteria to ensure that only those member

states that meet certain standards of economic
performance will be able to launch a single currency, thereby ensuring the new currency's stability and credibility.
See also COHESION POLICY; ECONOMIC AND
MONETARY UNION: TOWARD A SINGLE CURRENCY.

Convergence Crlterla
The Treaty on European Union (TEU) set out a
number of criteria for member states wishing to
participate in the final stage (Stage 3) of Economic and Monetary Union (EMU)-launch of
the single currency. The criteria, which set a standard for nominal convergence, are intended to ensure the single currency's stability and credibility.
The criteria are: (1) price stability: an average inflation rate not exceeding by more than 1.5 percent that of the three best-performing member
states; (2) budgetary discipline: a budget deficit of
less than 3 percent of GDP and a public debt ratio
not exceeding 60 percent of GDP; (3) currency
stability: respect for normal fluctuation margins of
the Exchange Rate Mechanism (ERM) "without
severe tensions" for at least two years, with no devaluations; and (4) interest rate convergence: an
average nominal long-term interest rate not exceeding by more than 2 percent that of the three
best-perforrning member states.
Although the convergence criteria appear to
be stringent, the TEU gives the European Council
some discretion as it decides, by July 1, 1998,
which member states will participate in Stage 3.
For instance, the exchange rate criterion does not
preelude realignments (in the event, a widening of
the ERM margins to 15 percent following the currency crises of 1992 and 1993 makes this criterion
meaningless), and the budget criterion is hedged
with qualifications. The deficit may exceed 3 percent of GDP if "either the ratio has deelined substantially and continuously and reached a level
that comes elose" to the reference value or "the
excess over the reference value is only exceptional
and temporary." Similarly, govemment debt may
exceed 60 percent of GDP if "the ratio is sufficiently diminishing and approaching the reference
value at a satisfactory pace." In addition to the
convergence criteria, the European Council will
consider other indicators of economic performance, such as the balance of payments and unit
labor costs.

100

Cooperation Procedure

See also ECONOMIC AND MONETARY UNION:

TOWARD A SINGLE CURRENCY.

Core Group
See DIFFERENTIATED INTEGRATION; HARn CORE.

Cooperatlon Procedure

COREPER

One of four major decisionmaking procedures in the EU, the cooperation procedure (Artic1e 189c procedure) was inIroduced in the Single
European Act (1986) in order to give the European
Par1iament (EP) a greater legislative role. At the
first reading stage, the EP issues its opinion and
then the Council establishes a common position.
At the second reading stage, if the EP rejects the
common position by a majority of its members
(currently 314), the Council can adopt the legislation only by acting unanimously. Sirnilarly, if the
Comrnission accepts amendments approved by the
EP by a majority of its members, the Council must
act unanimously to reject or change them. As under the simpler consultation procedure, the Council remains the sole final decisionmaker. Under
the terms of the Amsterdam Treaty, the cooperation procedure was virtually abolished, and most
of the areas subject to it were made subject to the
co-decision procedure.
See also DECISIONMAKING PROCEDURES.

See COMMITTEE OF PERMANENT REPRESENTATIVES.

Coordlnatlng Information on
the Environment (CORINE)
Coordinating Information on the Environment
(CORINE) was an experimental project (19851990) to deterrnine the need and practice for collecting, coordinating, and ensuring the consistency
of information on the state of the environment and
natural resources for the EC. CORINE was the
forerunner of the European Environment Agency.
See also ENVIRONMENTAL POLICY; EUROPEAN
ENVIRONMENT AGENCY.

Copenhagen Report
In 1973 EC foreign ministers adopted the Copenhagen Report on ways to sIrengthen the recently
launched European Political Cooperation (a procedure to coordinate member states' foreign policies).
See also EUROPEAN POLmCAL COOPERATION.

COR
See COMMITfEE OF THE REGIONS.

COREU
COREU is a secure communications system linking the EU member states' foreign rninistries to facilitate the conduct of the Common Foreign and
Security Policy and, before that, of European Political Cooperation.
See also COMMON FOREIGN AND SECURITY
POLICY; EUROPEAN POLmCAL COOPERATION.

CORINE
See COORDINATING INFORMATION ON THE ENVIRONMENT.

Correspondents
See GROUP OF CORRESPONDENTS.

COSAC
See CONFERENCE OF EUROPEAN AFFAIRS COMMITTEES.

COST
See EUROPEAN COOPERATION IN THE HELD OF SCIENTIFIC AND TECHNOLOGICAL RESEARCH.

Coudenhove-Kalergl, Count
Rlchard Nlcolaus (1894-1972)
The colorful, cosmopolitan Count CoudenhoveKalergi was an indefatigable champion of European integration in the interwar years (1920s and
1930s). Proud of his internationalism-the
Coudenhoves were Flernish nobles, the Kalergis
were Greek, and his mother was Japanese-in
1923 Coudenhove-Kalergi wrote Pan-Europa, an
influencial political tract advocating European
unification (and prophetically calling for a
Franco-German coal and steel community).
Coudenhove-Kalergi then launched apressure
group of the same name, with chapters in many

Council of Europe

European countries. Coudenhove-Kalergi spent

World War 11 in the United States, mostly teaching at New York University. He returned to Europe after the war but was not in the mainstream
of the European movement. Instead he served as
secretary-general of the European Parliamentary
Union and later campaigned to turn the European
Economic Community into a political organization.
See also EUROPEAN MOVEMENT.

Councll for Mutual Economlc

Asslstance (CMEA; COMECON)
The Council for Mutual Economic Assistance is
better known as COMECON. It was established
by the USSR in 1949 to impose economic collaboration on the countries of the Soviet bloc. For
ideological reasons, the Soviets refused to recognize the EC and prevented their Eastern European
satellites from negotiating badly needed trade accords with Brussels. Economic necessity finally
forced Moscow to acknowledge the EC's existence in the late 1970s and to seek abilateral
agreement between the EC and COMECON.
However, the EC regarded COMECON as an unworthy interlocutor, dec1ining to deal with it unless Brusse1s could also negotiate bilateral agreements with the Eastern European countries
themselves. Relations between the EC and the Soviet Union improved dramatically in 1984 when
Mikhail Gorbachev came to power in Moscow.
Gorbachev's obsession with economic reform
throughout the Soviet bloc inevitably led him to
make early overtures toward Brussels. By 1986
Willy de Clercq, the external affairs commissioner, was exploring the possibility of an ECCOMECON dec1aration and, under its auspices,
bilateral trade agreements with individual Eastern
European countries.
1\\'0 years later, on June 25, 1988, Commission and COMECON officials signed a Joint Declaration in Luxembourg, opening the way for a
rapid conc1usion of the more desirable and practical bilateral country accords. By October 1990,
the EC had signed Trade and Cooperation Agreements (TCAs) with all COMECON's European
members. COMECON itself-an unloved relic of
the Cold War-was dissolved in 1991.
See also CENTRAL AND EASTERN EUROPEAN
STATES.

101

Councll of Baltlc Sea States

See

BALTIC COUNCIL.

Councll of Economlc and

Flnance Ministers (ECOFIN)
Although legally and institutionally there is only
one Council of Ministers, in reality the Council
consists of meetings of ministers having responsibility within the EU's member states for the range
of policy issues within the EU's competence.
Thus, whenever they meet to legislate for the EU,
agricultural ministers, environment ministers,
trade ministers, and so on constitute the Council
of Ministers. Economic and finance ministers are
highly influential at both the national and European levels, especially with the development of
Economic and Monetary Union (EMU). When
they meet as the Council of Ministers, economic
and finance ministers form wh at is called the
Council of Economic and Finance Ministers, or
ECOFIN.

Councll of Europe
The Council of Europe emerged out of the deliberations of several hundred influential Europeans who
met in the Congress of Europe, in The Hague in
May 1948. The purpose ofthe congress was to plan
a strategy for European unity. However, a sharp difference of opinion between "unionists" and "federalists" made agreement difficult to reach. The former, personified by Winston Churchill, advocated
intergovernmental cooperation; the latter, personified by Altiero Spinelli, espoused supranationalism.
Both sides agreed on the desirability of European
integration and on the need to establish an organization with a parliamentary body. For the "unionists" that body would be mere1y a consultative assembly, bound to defer to an intergovernmental
ministerial committee. For the "federalists," in contrast, the parliamentary body would be a constituent
assembly charged with drafting a constitution for
the United States of Europe.
What emerged from the acrimonious Hague
congress and from follow-up negotiations in late
1948 and early 1949 had the appearance of a compromise but was actually a capitulation to the minimalist "unionist" position. The ensuing Council
of Europe was a far cry from what the federalists
had initially wanted. Although pledged "to

102

Council of Ministers

achieve a c10ser union between its members in order to protect and promote the ideals and principIes which constitute their cornrnon heritage and
to further their economic and social progress," the
Council of Europe did litde more than exchange
ideas and information on social, legal, and cultural
matters. Only in one area, that of human rights,
did the Council of Europe really distinguish itself.
The Council's Court of Human Rights, often confused with the European Court of Justice, became
an irnportant means of protecting and promoting
civilliberties throughout Europe.
In addition to its role in the early history of
European integration, the Council of Europe influenced the EC's development in at least two unexpected ways. First, the decision of the Council of
Europe's founding members to locate its assembly
in Strasbourg convinced the EC's founding members to locate the EC's parliament there also. Second, the Council of Europe's assembly socialized
an entire generation of European politicians, particularly British parliamentarians who had had litde exposure during the war to the intellectual ferment of the resistance movement. This was
especially true of British Labour politicians, who
were traditionally hostile to the Ee.
The Council of Europe enjoyed an unexpected resurgence after the end of the Cold War,
when its membership grew to inc1ude almost
every European country. Russia's membership in
1996 was controversial because Russia was engaged in a brutal war with Chechnya at the time; it
seemed hypocritical for the council, with its commitrnent to human rights, to adrnit a country that
was carrying out large-scale human rights abuses.
But the political imperative of Russian membership triumphed. Indeed, the decision to adrnit Russia demonstrates the council's new role: to bring
the countries of Western, Central, and Eastern Europe together in a single organization that, however powerless, can at least help to develop a sense
of cornrnon identity and interest.

Councll of Ministers
The Council of Ministers is one of the five official
institutions of the EU. Its tasks are listed in Artic1e
145, and its composition is given in Artic1e 146,
first paragraph, as amended by the Treaty on European Union (TEU). The EU proceeds by dialogue between the Council and two of the other
institutions-the Cornrnission and the European

Parliament (EP)-accompanying or following debate among its own member states. By virtue of
the Council's power to take decisions (Artic1e
145, second indent), it is cornrnonly described as a
legislature, a function partly shared with the EP
under treaty artic1es that require co-decision (Artic1e 189b). In addition to the laws that it adopts or
co-decides, the Council takes other types of decision in the external economic relations of the EC
and adopts cornrnon positions and joint actions in
the fields of the Cornrnon Foreign and Security
Policy and Cooperation on Justice and Horne Mfairs. Simply put, "in the European Economic
Cornrnunity and in EURATOM ... any measure
of general application or of a certain level of importance must be enacted by the Council" (Noel,
1991, p. 20).
The members of the Council represent the
EU's member states. As the British government
describes it, "the bedrock of the European Union
is the democratic nation state. The Rome Treaty of
1957 established the Council as the ultimate focus
of Cornrnunity decision-making on all major issues" (White Paper, 1996, p. 1). Such an assertion
is not innovative or partisan in a historical perspective. Since the 1960s "c1inging to national
sovereignty was not ... dictated solely by rational
considerations but was also the expression of a
deep-rooted, almost preconceived conviction that
the nation state still provides the conditions for ...
participation by the individual in the decisionmaking process and that in the final analysis values and interests are viable only in concrete human relations as found in the nation state in
contrast with all international and supranational
organizations" (von der Groeben, 1987, p. 254).
The TEU recognized the federal structure of
some of its member states by stipulating that their
representatives who sit on the Council must be of
"ministerial level." Although they need not necessarily be members of the central governrnent, the
TEU required that they should be "authorized to
commit the government of that member state."
How a local minister cornrnits the federation is a
matter for the member state concerned, not for the
EU, to resolve.
On November 8, 1993, the Council decided
to call itself the Council of the European Union.
The Council' s new designation appears to have
been inspired by the single institutional framework created by Artic1e C of the TEU, which implied that the same institutions would be present

Council of Ministers

in the different spheres of competence of the EU.

Because, strictly speaking, the EU pos ses ses no
institutions of its own, when the Councillegislates
or adopts other decisions within the competence
of the EC its legal qualification is as an institution
of the Comrnunity. The still widely used title
Council of Ministers is a solecism; it is a relic of
the treaty establishing the European Coal and
Steel Comrnunity (ECSC), which textually refers
once to a Special Council of Ministers (Article 7,
third indent).
Balance of Power
In the dawn of postwar European integration, the

significance of the national governments of the

member states was downplayed. The ECSC Treaty
was centered upon the High Authority, whose first
president, Jean Monnet, regarded govemments as
minor players in the Comrnunity and disdained to
deal with any national representatives other than
ministers (von der Groeben, 1987, p. 86). At the
limit, his formula allowed for govemments and the
High Authority to hold joint meetings when there
were problems that might spill over into the responsibility of govemments and that were not expressly entrusted by treaty to the High Authority.
Yet this understanding of the role of the supranational authority (as the original version of Article 9
of the ECSC treaty called it) was an underestimate
of the powers that the six member states were resolved to retain.
Indeed, the history of integration is of the progressive shift in the center of gravity toward the
representatives of the states. This tendency, which
can be traced both in texts and in action, reached
its high point in the TEU. There the European
Council, composed of the political masters of
Council members, is given responsibility for providing the EU with "the necessary impetus for its
development," and for defining "the general political guidelines thereof' (Article D, paragraph 1).
The earlier doctrine that characterized the Commission as the "motor of European integration" is
displaced. Accordingly, "the decision-making
process evolving in the Comrnunity gives a key
role to govemments" (Sbragia, 1992, p. 289).
The role of member states in the Council
puts a question mark on the driving force of integration. "One school of thought . . . sees the
Council in its present form as a major obstacle to
any progress towards some kind of federal system. . . . An alternative school perceives the

103

Council as the major body representing and defending legitimate national interests" (Keohane
and Hoffman, 1991, p. 138). "The Council of
Ministers remains the locus of what to Americans
seems parochialism in the EC ... its interactions
depend to a great extent upon diplomacy and bargaining arnong representatives of national interests rather than the more collegial interactions
that might be expected within an organization
pushing towards full economic integration"
(Sbragia, 1992, pp. 78, 81). The tension is systemic: "Conflicts of aim arise when the Comrnunity's interests appear to be or are inconsistent
with national interests. These conflicts are unavoidable in a Comrnunity in the making; the fate
of the Community depends upon whether they
can be resolved" (von der Groeben, 1987, p. 32).
As long as there are national interests, they never
can be resolved. Hence the charge of incapacity:
"The foreign ministers of the EU are pastmasters
in the strategy of not deciding. The recipe for failure is simple and weil tried. Take a hot subject,
studiously ignore it briefly, debate it until the
temperature is agreeably tepid. If it still has any
semblance of topicality and has not already been
overtaken by events, either send it to a 'high level
expert group' or by repeated postponements
soften it up until there is scarcely anything left"
(Die Presse, Vienna, March 13, 1996).
Democratization
Although the Comrnission (which subsumed the
High Authority) is not a democratic organ, it is the
embodiment of a pan-European interest, and its
independence of the govemments that appoint its
members is entrenched in the treaty (Article 157,
paragraph 2). The Council's democratic credentials reside in the political status of its members:
''The Council also helps to ensure respect for the
democratic functioning of the system, insofar as
each of its members is politically responsible to
the national parliarnent before which he answers
for the positions adopted at Union level" (Council,
1995, p. 6). As one of Margaret Thatcher's foreign
secretaries observed, she "expressed the balance
candidly and weil. Members of the European Parliarnent, she said, are democratic representatives.
So are we" (Howe, 1994, p. 455).
The Council's "indirect democratic accountability" (Dashwood, 1996, pp. 75, Ill) is a political reality but is overshadowed by the democratic
legitimacy asserted by the EP, elected by direct,

104

Council of Ministers

secret, universal ballot since 1979. Tbe meager

"advisory and supervisory" responsibility assigned even to an indirectly elected EP in Article
137 of the original EC treaty, when contrasted
with the decisionmaking power of the Council,
evoked the expression "democratic deficit" to describe a genetic weakness of the Council and of
the Community. Tbe (nominated) Parliament had
acquired budgetary authority in the treaty reforrns
of 1970 and 1975 when the acquisition of its "own
resources" of revenue had made the Community
independent of the voting of supply by parliaments of the member states. Tbe objective of the
elected parliamentarians was to acquire the legislative power for which parliamentary assemblies
are usually known. Tbe member states, who had
willed the direct elections, were under an obligation to respond. Their first contribution was the
cooperation procedure of Article 7 of the Single
European Act (SEA), along with an assent procedure for the admission of new member states (Article 237) and for the conclusion of association
agreements (Article 238). Each new procedure
gave the EP a bigger say in decisions. It could be
overruled in the cooperation procedure; in the assent procedure it could only block, not amend.
A second peace offering from national governments came with the co-decision procedure of
the TEU, which empowered the EP to demand
amendments to provisional Council decisions
("common positions") under pain of rejecting the
proposed measure if not satisfied with the Council's response. Power sharing has not reached its
limit. Indeed, it was an important item at the
1996-1997 intergovernmental conference (lGC),
which effectively abolished the cooperation procedure and correspondingly extended the scope of
co-decision in the Amsterdam Treaty.
Qualified Majority Voting

''Tbe Community and subsequently the Union has

been poised between federalism and intergovernmentalism, supranationalism and cooperation between different nationalities: two different concepts of Europe known by a variety of different
names [that] have been vying with each other
since the earliest days of the Community" (Tugendhat, 1986, p. 71). To confer additional power
on the Parliament is one response to the first
forces; another is acceptance of a principle of majority rule in the Council itself.

In the beginnings of the European Economic

Community, the six members chose universal unanimity, subject to moving to majority voting on
selected subjects in a more mature phase of their
"destiny henceforward shared." In 1965, when this
phase was due to begin, French president Charles
de Gaulle took issue with aseries of matters that
the Council and Commission were not handling to
his satisfaction, and France boycotted Council
meetings. Tbe "empty chair crisis" of 1965 ended
with the Luxembourg Compromise of January
1966, a statement that continuing disagreement
would not prevent the Community from functioning. Tbereafter, in matters important or not, the
Six and successively the Nine and the Ten, with
rare and striking exceptions, pursued discussion
until they reached agreement or gave up if agreement eluded them. Tbe member states preferred
decisions that were accepted without reservation
and that averted the possibility of more empty
chairs. Further and more radically, "the conventional political wisdom in most [member states]
urges governments to get broad agreement on major political acts even if the constitutional rules
might allow for a narrower margin of majority"
(Keohane and Hoffmann, 1991, p. 149).
Although unanimity provided asolid political
foundation for Community acts, it came under [ITe
for delaying or inhibiting progress and preventing
the adoption of needed policies. Tbe member
states' delayed response, after much internal controversy, was a provision in the SEA that made it
possible for nonfiscal measures in the single market program to be passed by a qualified majority
(Article 100). Despite this gesture in favor of
greater efficiency and democracy, member states
continued to make sustained attempts to find positions that all could accept. True, their awareness
that an individual's excessive opposition might finally be overborne may itself have helped them to
conclude their discussions. But recourse to voting
raised questions about whether the rules were fair.
Tbe weighted votes given to member states were
biased in favor of the smaller countries. Successive enlargements increased the number of overweighted voters, prompting efforts at the 19961997 IGC to give the four larger member states
(Britain, France, Germany, and Italy) more clout.
This became a major sticking point at the Amsterdam Summit on June 16 and 17, 1997. In the
event, the Amsterdam Treaty maintained the status

Council of Ministers

quo, but in a legally binding protocol on enlargement, the treaty links increasing the number of
votes for larger member states to agreement by
them to give up their second commissioner.
Intergovernmentalism

As long as it preferred unanimity, the Council

bore little resemblance to a transnational entity
pursuing an ever closer union. Indeed, it behaved
more like a "diplomaticconference than ... a normallegislature" (Federal Trust, 1995, p. 3). When
national governments decided, in the negotiations
that produced the TEU, to recognize that European integration had moved into fields of noneconomic policymaking, they reserved foreign and internal security policies exclusively to the
intergovernmental mode. Thus, the Common Foreign and Security Policy and Cooperation on Justice and Horne Affairs, although in the charge of
the Council by virtue of the single institutional
structure, are divorced from the Community and
its methods. The role of the Council as decisionmaker is unchanged, but the participation of other
institutions is either attenuated or absent. In effect,
unanimity rules. As elsewhere in the Union's
spheres, the Council is blarned for inanition. The
Council maintained in 1995, in its preparations for
the impending round of treaty reform, that in the
running-in period of the TEU it was too early to
make assessments (Council, 1995, p. 13). The
Commission and the EP were in no doubt that intergovernmentalism must go.
Transparency and Effidency

A constant criticism of the Council in all its manifestations is that it is opaque where public acceptance demands greater transparency. The Council
deliberates in private and does not reveal the tenor
of its debates or the reasons for adopting its positions. By contrast, the Commission publishes all
its proposals and numerous explanations and consultation papers, and the EP has its public gallery.
The arrival of Sweden as a member state reinforced the pressure, in which Denmark was
prominent, for the Council to open itse1f to public
scrutiny. It responded by televising some of its
sessions on a closed circuit, by naming member
states outvoted in deliberations, and by improving
public access to its records (Westlake, 1995, pp.
144-162). But some of its members remained apprehensive that greater transparency and improved

1 05

efficiency did not always go together. A public

session of the Council, with speakers addressing
wider audiences, would change the character of
the insider and encrypted dealings of closed sessions. Serious negotiation, which perforce includes game play and requires margins for bargaining, would risk being switched to rooms and
corners off camera, with intentionally even less
transparency (White Paper, 1996, p. 25). Clearly,
"debates about democratizing the Council or rendering its work more transparent cannot be dissociated from the equally important debate about the
Council's efficiency" (Westlake, 1995, p. 163).
Bureaucratization

With its democratic credentials challenged and its

secrecies attacked, the Council is also seen as having been captured by bureaucracy. British govemment ministers were quick to make the point. As
one of them observed. "It makes [not] the slightest
difference to the conclusions of a meeting what
ministers say at it. Everything is decided, is horsetraded off at COREPER, the Council [sie] of Permanent Representatives" (Clark, 1993, p. 39). Another complained that "ministers are too busy to
spend more than 5 to 10 percent of their time on
the Council's affairs .... They fly in, read out their
speech, listen wearily to eleven other speeches,
then frequently find that it is too late to come to a
conclusion and take the next plane horne. . . .
Much of the power lies with a myriad of bodies
staffed by civil servants of the member states"
(Heseltine, 1989, pp. 1,25).
The Committee of Permanent Representatives
(COREPER) meets weekly in two formations: (l)
the member states' permanent representatives (ambassadors) and (2) their deputies. Its function is to
seek out in the heaps of paperwork that will reach
the Council the "A" points on which agreement
can be recorded and the other points that ministerial representatives must debate and if possible setde. 'The functioning of the Council of Ministers as
a whole rests in large measure on the ability of it to
act as a clearing house for those measures needing
further detailed consideration and those ready for
immediate ministerial attention" (Edwards and
Wallace, 1977, p. 11). COREPER can be depicted
as a bevy of grayeminences, manipulating the
Council but escaping control under the implausible
fiction that, having no power, it is not accountable
for its use. Or it can be described as a gathering of

1 06

Council of the European Union

practitioners acting on the instructions they receive

from their horne authorities and listening with professional care to what their colleagues say. With
more time at their disposal than ministers can ever
have and more opportunity for social and business
contacts outside the meeting room, they can explore common ground and seek to extend it. "The
theory is that experienced diplomats operating bebind the scenes and without the glare of publicity
can deal more smoothly with contentious and difficult points than their political masters" (Tugendhat, 1986, p. 89).

A Vast Enterprise
The Council itself is a "vast and complex hierarchy of separate bodies" (Edwards and Wallace,
1977, p. 4). It meets in more than twenty different
formations according to subject matter. Every
working week one or more councils meet for upward of three days. Preparations account for three
more days. The Council's reproduction service issues more than 100,000 documents annually. Even
the dispassionate language of the Council itself
shows the strain: "Recent experience of the functioning of the Council confirms that the continuing efficiency and consistency of its activities also
depend upon curbing more effectively the growing
number of meetings and effectively coordinating
its various formations" (Council, 1995, p. 7). The
catchword of the Santer Commission, "do less to
do better," has special resonance for the Council.
The Council may not "meet ideal standards of effectiveness, efficiency and legitirnacy, but neither
do national govemments" (Keohane and Hoffmann, 1991, p. 151). Whatever else may be said,
there can be no real doubt that the Council remains the power base of the EU. This situation
will not change significantly in the foreseeable future; thereafter further waves of enlargement can
only give additional salience to the promotion of
national interest within the EU.
See also BUDGET; COMMITTEE OF PERMANENT
REPRESENTATIVES; DECISIONMAKING PROCEDURES;

1; APPENDIX 7;
8; APPENDIX 9; APPENDIX 10.

DEMOCRATIC DEFICIT; ApPENDIX

APPENDIX

Bibliography
Clark, Alan. 1993. Diaries. London: Weidenfeld and
Nicolson.
Council. 1995. Report ofthe Council of Ministers on the
Functioning of the Treaty on European Union. London: Her Majesty's Stationery Office.

Dashwood, Alan. 1996. Reviewing Maastricht: Issues

for the 1996 IGC. London: Sweet and Maxwell.
Edwards, Geoffrey, and Helen Wallace. 1977. The

Council of Ministers of the European Community

and the President in Office. London: Federal Trust.
Federal Trust. 1995. Building the Union. London: Fed-

eral Trust.
Hayes-Renshaw, Fiona, and Helen Wallace. 1997. The
Council of Ministers. New York: St. Martin's.
Heseltine, Michael. 1989. The Challege of Europe: Can
Britain Win? London: Weidenfeld and Nicolson.
Howe, Geoffrey. 1994. Conflict of Loyalty. London:
Macmillan.
Keohane, Robert, and Stanley Hoffmann, eds. 1991. The
New European Community. Boulder: Westview.
NoeI, Emile. 1991. Working Together: The Institutions
of the European Community. Luxembourg: Office
for Official Publications of the European Communities.
Sbragia, Alberta. 1992. Euro-Politics. Washington:
Brookings.
Tugendhat, Christopher. 1986. Making Sense of Europe.
London: Viking.
von der Groeben, Hans. 1987. The European Community: The Formative Years. Luxembourg: Office for
Official Publications of the European Communities.
Westlake, Martin. 1995. The Council of the European
Union. Harlow: Cartermill.
White Paper. 1996. A Partnership of Nations. London:
Her Majesty's Stationery Office.

-Sir William Nicoll

Councll of the European Union

See

COUNCIL OF MINISTERS.

Councll Secretarlat
The secretariat of the Council of Ministers is a
professional civil service-part of the Eurocracy
recruited in the member states and employed in
Brussels to serve the EU's institutions. With a staff
of approximately 2,300 people, including about
300 A grade officials, the Council secretariat assists the Council by helping to draft the sixmonthly legislative program, providing legal advice, briefing govemment ministers on current EU
issues, preparing the agenda for Council meetings,
and drafting the meetings' minutes. Nearly twothirds of the Council staff are translators and interpreters. Like the Commission, the Council secretariat is divided into directorates-general, although
along far different lines. A legal service represents
the Council before the Court of Justice, ensures

Court of Auditors

that all texts adopted are compatible, and advises

the Council at all levels.
The Council secretariat describes itself as
"entirely at the service of the Presidency, supporting it in its efforts to find compromise solutions,
coordinate work or arrive at an overall view." Indeed, the presidency is the presidency plus the
Council secretariat. What is involved, rather than
merely elose cooperation, is a form of common
action or symbiosis in regard to preparing and carrying out the presidency program. A member of
the secretariat always accompanies the presidency,
at ministerial or official level, unless a particular
bilateral issue is being discussed. Small countries
in the presidency, more than large countries, depend heavily on the Council secretariat for support
and guidance.
The Amsterdam Treaty introduced an important change that not only affects the organization
of the Council secretariat but also has potentially
negative consequences for the secretariat itself.
Under the treaty's Common Foreign and Security
Policy (CFSP) provisions, the Council secretary
general will become the CFSP High Representative, and a deputy secretary-general will ron the
secretariat. Not only will the secretary-general
therefore be aministerial rather than a senior official type, but the innovation also suggests that one
part of the secretariat will acquire a policy-formulating function, which is the diametrical opposite
of what the Council secretariat has been-and arguably should be-about.
See also COUNCIL OF MINISTERS; APPENDIX 9.

Court of Auditors
Despite its title, the Court of Auditors has no judicial powers or functions. The audit reports that are
its most publiely visible product are essentially
consultative in character. The Court is commonly
described as the EU's external auditor. In reality it
is one element in the patchwork of (frequently
overlapping) institutional and national control authorities that together constitute the EU taxpayers'
defenses against waste, mismanagement, and
fraud.
The Court was established by the Brossels
treaty of July 22, 1975, and began operations in
October 1977. It was promoted to full instituti on al status by the Treaty on European Union
(TEU). The Court replaced the Audit Board, a
parttime body that was endowed with modest re-

107

sources and enjoyed neither the status nor the independence of its successor (though by common
consent it did useful work).
The initial impetus for creating the Court
came from certain quarters in the European Parliament (EP), where it was argued that a strong, independent audit body was the logical corollary of
the transfer of certain budgetary powers from the
Council of Ministers to the EP and the transition
in Community finances from national contributions to the supposedly autonomous regime of
own resources. Britain and Germany were the
keenest supporters of the Court's creation among
the member states.
Appointments to the Court are made by the
Council for aperiod of six years (renewable).
Candidates for appointment (and reappointment)
are vetted by the EP. Parliament's opinion is not
binding on the Council. Parliament's adverse
opinion led to the withdrawal of one candidate in
1989, but the Council ignored the EP's recommendation against another candidate in 1989 and
two in 1994. The Court elects its own president
for aperiod of three years (renewable) and establishes its own roles of procedure. The decision to
fix Court members' remuneration only fractionally below that of comrnissioners came from the
Council, seemingly in the belief that a high level
of salaries would help to ensure a serious hearing
for Court findings. The members of the Court (one
per member state) are supported by a staff of some
five hundred, rather more than half of whom are
employed directly on audit work, some sixty of
the remainder being translators.
The 1975 treaty defined the scope of the
Court's core audit work as "the accounts of all
revenue and expenditure of the Community." The
Court was required to examine "whether all revenue has been received and all expenditure incurred in a lawful manner and whether the financial management has been sound." These
provisions were inherited almost verbatim from
the Audit Board. The Court's rights of access to
records and on the spot audit were slightly more
explicit than the corresponding powers of its predecessor; and it was required to work with and
through national audit bodies when auditing in
member states, whose administrations collect almost all the revenue and implement 50 percent of
the expenditure of the Community budget.
According to the treaty, members of the
Court "shall be chosen from among persons who

108

Court of Auditors

belong or have belonged in their respective countries to external audit bodies or who are especially
qualified for this office. Their independence must
be beyond doubt." Since different Community
countries had and have different conceptions of
the proper role of a public auditor, this formula
sheds little light on the nature of the Court's intended task. It was partly in response to the perceived lack of consensus about its role and operating methods that in its 1980 Annual Report the
Court nailed its colors to the mast of the systemsbased approach to audit.
From the outset the Court decided to structure itself on Commission lines, with each member assuming responsibility for a defined share
(known as a sector) of the audit work and the
available audit staff. Most sectors concentrate on
specific areas of the Community budget: for example, regional measures, agricultural measures
(divided between four sectors), development aid,
running costs of the institutions, and so on. Two
members exercise Courtwide responsibilities. One
coordinates work on the annual report and specializes in audit standards and working methods; the
other coordinates the post-TED work on the Statement of Assurance (see below). The president
looks after external relations and the Court's secretariat and legal services.
All sectors are supposed to be of equal interest and importance. A member who is dissatisfied
with his allotted sector can seek his colleagues'
agreement to aredistribution of sectoral responsibilities in his favor, either by a change of sector or
by an extension of the responsibilities of his existing sec tor. Bargaining about sec tors (and staff
movements and promotions) is one of the normal
preludes to a presidential election, and a change of
president is usually followed by a fairly general
reshuffling of portfolios.
As head of a sector, a member of the court
has de facto a considerable measure of autonomy
as regards the prioritizing, planning, and direction
of the audit work carried out by the allotted audit
staff. Collegiate constraints begin to bite more seriously at the stage when a member exposes the
results of an audit enquiry to colleagues' view in
the form of a draft audit report destined (normally) for publication in the Official Journal.
The Court publishes an annual report on each
year's budget in November of the following year.
The annual report-a substantial volume of rather

uneven quality and usefulness-is a compilation

of chapters contributed by the Court's different
sectors and ranging selectively over the whole
budget (and some associated financial operations).
The Court also produces separate studies of specific financial issues and budgetary measures.
These special reports, as they are known, are not
limited to a particular year's operations or accounts or to a predetermined publication date.
Both types of report combine value for moneytype analyses with comments on specific problems of regularity and legality.
Court reports are presented to both Council
and the EP. Within the EP, their initial processing
is the prerogative of the Budgetary Control Committee, with which the Court has developed a
elose, if not always harmonious, working relationship. The Court's annual and special reports are
compulsory reading initially for the Council and
thereafter more importantly for the EP during the
run-up to the latter's annual decision to grant (or
postpone or even refuse) discharge to the Commission under Artiele 206 of the treaty. Parliament
can draw on the annual report to inelude comments and suggestions for remedial steps in the
decision granting discharge. These comments are
in principle binding on the Commission. Although
it is rare, though not unknown, for the Parliament
not to take any follow-up action on an annual or
special report, serious follow-up action by the
Council is the exception rather than the rule.
The published texts of most Court reports inelude the Commission's replies to the auditors' observations. Adoption by the Court of the draft of an
audit report is followed by an exchange of texts
with the Commission. A process of face-to-face
bargaining over the two texts then ensues: the
Commission seeking to convince the Court that the
sharpest of its criticisms are unjustified and should
be withdrawn or attenuated; the Court aiming to
eliminate from the Commission's reply all disagreements that might cast doubt on the accuracy
or wisdom of the auditors' conelusions. The Commission will often be prepared to trade bilateral
promises of remedial action for modifications to
the Court's text. This makes the process (known as
procedure contradictoire) unusually productive, a
fact not always apparent from the published text.
The tendency of the procedure contradictoire
to obscure the real impact of Court reports is enhanced by a time constraint. To plan, execute, and

Crocodile Club
complete an audit enquiry in a multilingual, multicultural environment is an imrnensely time-consuming operation. A gestation period of three
years from start to finish (i.e., publication) is not
exceptional for an important special report. Commission replies in such cases are apt to dismiss the
Court's findings as overtaken by events: in other
words, sufficient time has elapsed since the Commission became aware of the auditors' activity for
remedial measures to be put in place.
The Court itself has frequently argued (for example, in the introduction to its 1993 Annual Report) that the major brake on its effectiveness is the
lack of political will on the part of the Commission
and other institutions to act on its recomrnendations. But the Court must bear some of the responsibility for the failure of its reports to carry convicti on with the other institutions. As the best
examples of the Court's own work have demonstrated, auditors' findings, if they are sufficiently
cogent and relevant to policy, can compel an immediate and constructive response from the Commission and the other institutions. The variable quality
ofthe Court's output was noted in a 1987 report by
the Select Committee on the European Comrnunities of the British House of Lords, which perceptively urged the Court to bring all its work up to the
standard of the best (Court of Auditors, 1987).
The 1975 treaty was never interpreted by the
Court as requiring it to give an overall opinion on
the accounts. This was not an oversight: the pos sibility was occasionaBy considered and rejected,
with the result that the reader of its reports was
given no assurance that the Court had fulfilled its
treaty obligation to examine "the accounts of aB
revenue and expenditure." The TEU now requires
the Court to "provide the European Parliament
and the Council with a statement of assurance as
to the reliability of the accounts and the legality
and regularity of the underlying transactions." The
first such statement of ass uran ce, in relation to the
1994 accounts, was published in November 1995.
The Court found too many errors in the transactions underlying the payments in the accounts to
be able to give a positive assurance as to their legality/regularity. It would be premature to try to
assess the impact of this potentially important provision of the TEU on the basis of its first (explicitly experimental) application.
The Court publishes a list of aB its reports
over the preceding five years with each annual re-

1 09

port. A well-researched, independent assessment

of the Court has recently been published, which
offers a particularly useful conspectus of the institutional context of the Court's work (Harden,
White, and Donnelly, 1995).
See also BUDGET; EUROPEAN PARLIAMENT;
APPENDIX 1.

Bibliography
Court of Auditors. 1987. Sixth Report, 1986-1987. Luxembourg: Office for Official Publications of the European Communities.
Harden, lan, Fidelma White, and Katy Donnelly. 1995.
''The Court of Auditors and Financial Control and
Accountability in the European Community." European Public Law 1, no. 4.

-c. J. Carey
Court of First Instance
The most important institutional change in the organization and functioning of the European legal
system since the establishment of the European
Court of Justice (ECJ) was the creation of a Court
of First Instance in 1989. The ECJ had suggested
the establishment of a lower European tribunal in
the late 1970s to relieve the Court of some of its
caseload, especially European Coal and Steel
Comrnunity cases and personnel disputes. It took
a number of years for member states to agree to a
Court of First Instance, but by the late 1980s there
was a consensus that the ECJ was overburdened.
Thus the Court of First Instance was inaugurated
in 1989; like the ECJ, it is composed of a judge
from each member state. Its jurisdiction was extended in 1993 and 1994 so that now the Court of
First Instance hears virtually all cases brought by
private individuals, with the important exception
of cases referred by national courts under the preliminary ruling procedure.
See also EUROPEAN COURT OF JUSTICE.

Court of Justlce
See EUROPEAN COURT OF JUSTICE.

Crocodlle Club
In July 1980 Altiero Spinelli, the veteran Eurofederalist, gathered together a small number of likeminded members of the European Parliament

110

CSCE

(EP), representing a wide spectrum of political

opinion, in the Crocodile Restaurant in Strasbourg. By the end of the year the so-called Crocodile Club, an otherwise heterogeneous collection
of parliamentarians, had decided to draft a new
treaty to replace the original treaties and to launch
a new EU to replace the existing EC. This was the
origin of the EP's influential Committee on Institutional Affairs, which wrote the Draft Treaty Establishing the European Union, adopted by the EP
in February 1984.

CSCE
See ORGANIZATION FOR SECURITY AND COOPERATION IN EUROPE.

CSCM
See CONFERENCE ON SECURITY AND COOPERATION
IN THE MEDITERRANEAN.

CSFs
See COMMUNITY SUPPORT FRAMEWORKS.

CTMO

Community action." The report of the Committee

on a People's Europe (Adonnino Committee) approved by the European Council in Milan on June
28 and 29, 1985, called for action in the areas of
culture and communication. The Commission,
backed up by the European Parliament (EP),
maintained a small program of support to cultural
projects. Community cuIture ministers began
meeting regularly after November 1983 and
worked by means of resolutions, with limited
amounts of finance being made available from the
Community budget. In the 1980s an ever greater
number of matters having substantial cultural implications were dealt with in the Council under
various economic headings, without particular
heed to their cultural nature.
However, member state groupings of three
kinds were reluctant to allow any substantial
Community cultural action: (1) those unwilling to
cede any Community competence in culture either
because they feIt that Community action should
remain strictly economic or because of their belief
in maximum decentralization of cultural action,
(2) those that were net payers to the Community
budget and accordingly scrutinized all budget appropriations with a view to keeping them to a bare
minimum, and (3) those having a "hands-off' and
market-oriented approach to culture.

See COMMUNITY TRADEMARK OFFICE.

CTRs
See COMMON TECHNICAL REGULATIONS.

Cultural Policy
The Treaty on European Union (TEU), which entered into force on November 1, 1993, gave the
EC a new competence in the cultural field. Nearly
forty years earlier the signatories to the Treaty of
Rome had stated in the preamble that they were
"determined to lay the foundations of an ever
c10ser union among the peoples of Europe," and it
was for many a natural consequence that efforts
for deeper cultural understanding should form part
of Community action.
Yet establishing a cultural dimension proved
an uphill struggle. The Solemn Dec1aration on European Union signed by the ten heads of state or
govemment in Stuttgart on June 19, 1983, contained a section calling for cooperation in various
cultural sectors "with a view to complementing

Article 128 of the Treatyon European Union

The new Artic1e 128 of the TEU contains a balance
struck between member states that wanted culture
mentioned in the treaty in order to allow wider
Community action and those that wanted it mentioned in order to set down limits beyond which it
should not go. Paragraphs 1 and 2 of Artic1e 128
allow the EU to take wide-ranging, coherent action
in the cultural sector. Paragraph 4, stating that "the
Community shall take cultural aspects into account
in its action under other provisions of this Treaty,"
enables the cultural sector to act as a watchdog on
economic decisions affecting it.
On the other hand, Artic1e 128 recognizes
that the major responsibility for European cultural
co operation lies with the member states. It is a
model application of subsidiarity: rather than a
Community cultural policy there is Community
encouragement of action among member states,
which may inc1ude supporting and supplementing
their action "if necessary"; any harmonization of
the laws and regulations of member states is exc1uded; and a lengthy decisionmaking procedure

Cultural Policy

(co-decision) is involved. The final factor making

decisionmaking very difficult is that the Council
has to act by unanimous vote (instead of weighted
majority voting, prescribed for most Community
decisions), although this has been changed in the
Amsterdam Treaty.
The Commission, particularly under pressure
from the EP, which is very much in favor of cultural action, aimed to have cohesive and wellfunded programs in place quickly after the entry
into force of the TEU. However, with all these
constraints, it is not surprising that the adoption of
Community cultural programs based on Article
128 is behind schedule. It is nevertheless possible,
given that Commission proposals build on existing types of cultural activities carried on in an ad
hoc way, to sketch out the general lines of Community cultural action concerning cooperation on
creative projects and cultural networking (the
KALEIDOSCOPE program); books and reading,
including translation (the proposed ARIANE program); and protection of the cultural heritage (the
proposed RAPHAEL program). Another Community initiative with a strong cultural content is the
MEDIA 11 program of support to the European
film and television program industry.
KALEIDOSCOPE (general cultural events).

Building on Commission general support for cultural events over many years, the KALEIDOSCOPE program was signed by the presidents of the
EP and Council on March 29, 1996. It aims to encourage multilateral cooperation (participation from
at least three member states) on creative projects or
cultural events as weIl as improvement of skills of
young creative or performing artists and other cultural operators. Most of these activities will be on a
relatively small scale, with the Community's contribution (up to 50 percent of the total) having an upper limit of ECU 50,000. Some larger-scale projects
will also be covered, including a number of preexisting large projects, such as the European Community Youth Orchestra. The European City of Culture,
perhaps the best-known Community cultural action,
and the European Cultural Month events are temporarily covered by KALEIDOSCOPE; the Commission has been invited to present a proposal for a
Community decision covering the events separately
after the year 2000.
ARIANE (books and reading). Many EU
measures in favor of books and reading are initiated in fields outside culture: stimulation of reading as part of educational activity, value added tax

111

on books within overall tax decisions, copyright in

the internal market area, the fixed book price under competition policy, and so on. This makes a
coherent and satisfying cultural program for
books and reading difficult to achieve. Actions
carried out so far on an ad hoc basis include a pilot
scheme for granting financial support for translation of literary works into other languages of the
EU, support for networking among colleges for
literary translators, and the ARISTEION European literary and translation prizes.
In the ARIANE program, presented by the
Commission in October 1994, the first and largest
action concerns support for translation of literary
works, translation of plays for production in other
EU languages, and translation of works of reference. The main aim is to widen the circulation of
works first published in a lesser-used official language of the EU or one of the regional languages
of a member state, through the translation of these
into other EU languages.
Other actions provide for assistance to projects to be carried out through networking of the
various groups involved (authors, booksellers, librarians, and those otherwise promoting books
and reading); measures for the improvement of
skills, including joint activities by colleges for literary translators existing in most member states;
and the ARISTEION prizes, one for contemporary
European literary work and the other for literary
translation.
RAPHAEL (protection of cultural heritage).
Cultural heritage is an obvious area for European
cooperation, and the need for "conservation and
safeguarding of cuItural heritage of European significance" figures prominently in Artic1e 128. For
several years the Commission assisted two or
three conservation projects per member state in an
annual operation that each year was based on a
specific theme-buildings for public entertainment, buildings devoted to religious purposes, and
heritage gardens have been recent themes. Support has also been given for a few particularly important conservation projects, including some cultural and historic buildings damaged by fire.
Many useful lessons were learned in the
course of conservation projects developed through
the Commission scheme. It was nevertheless feit,
after discussions with specialists in the sector, that
a more targeted approach could bring greater European value: common conservation problems
needing a breakthrough should be pinpointed, and

11 2

Cultural Policy

on suitable ones multinational teams should pool

experience and work together to find solutions;
the results of the operations should be widely disseminated.
This approach forms the core of the
RAPHAEL program, presented by the Commission in April 1995. The program provides support
to (1) a limited number of "European heritage laboratories," relating to works, monuments, or cities
of exceptional historic, architectural, or artistic
importance (projects, submitted by the member
states, should bring in a multidisciplinary European team of specialists); and (2) a much larger
number of conservation projects (with maximum
Community support of ECU 150,000, representing not more than half the cost), in connection
with common conservation themes. The projects
should be submitted by the owners of the property
concerned, who would be expected to ensure that
experience acquired in the management andJor
preservation problems involved is adequately disseminated.
Support will be given to cooperation on such
subjects as innovation and new technologies as
well as on mobility and training of professionals.
In another action, questions of public access to the
cultural heritage will be addressed. Finally, the
program will provide a focal point for joint action
by museums and archives of the member states.
MEDIA 11 (support for the film and television
program industry). The MEDIA 11 pro gram,

adopted in December 1995, provides support designed to strengthen the European film and television program industry over the 1996-2000 period.
It addresses economic shortcomings of the industry, which is characterized by fragmentation into
national markets, with most producers being too
small to compete in European and world markets,
and by severe weaknesses in the cinema distribution and television circulation of European films as
well as by an extremely unhealthy financial base.
As a complement to the MEDIA 11 program,
mention should be made of a Commission proposal, dated November 30, 1995, for a European
audiovisual guarantee fund, designed to intensify
the flow of capital into European film and television production. Films and television programs
being not only economic services but also emanations of culture, any strengthening of the European industry will also promote culture in Europe,
whether through large-scale flagship productions
or through productions that lead to wider under-

standing among the diverse cultures present in Europe.

Promotion of Statistics on Culture
In the cultural area, as in any other field of EU en-

deavor, co operation can be achieved more

smoothly if people proceed from similar assumptions, based on comparable data. Two meetings of
heads of statistical offices and national cultural
administrations took place in 1995, and in a resolution adopted in November 1995, the Council
agreed "to continue work on establishing comparable statistical indicators and the possible alignment of cultural statistics." The resolution associated the work on statistics with European activity
and exchange of experience on the economic aspects and job-creating role of culture.
Cultural Aspects of Action Under Other
Provisions of the Treaty

In the 1980s some Community actions had been

based on economic considerations, leaving little
room for taking cultural aspects into account. At
an audiovisual conference in October 1989, however, Commission president Jacques Delors committed the Comrnission for the first time to the
view that "culture is not merchandise like other
commodities, and it should not be treated as
such." Artic1e 128 takes this question further in
paragraph 4: "The Community shall take cultural
aspects into account in its action under other provisions of this treaty." Although it may be difficult
to prove that culture has or has not been taken into
account, the paragraph is a strong moral weapon
for action in favor of culture. The problem is how
to come to grips with policies in the stage of formation early enough to influence them in a cultural direction. Following requests by the Council,
the Commission presented a wide-ranging report
on the subject in May 1996.
One cultural matter that is exc1uded from the
treaty is restrictions on imports or exports justified
on grounds of the protection of national treasures
possessing artistic, historic, or archaeological
value. The dismantling of internal economic frontiers through completion of the single market required a system to be built so that member states
could retain their national treasures that otherwise
might circulate freely within the Community (no
state was ready for a concept of "European treasures"). This system was established through a directive on "the return of cultural objects unlaw-

Cyprus
fully removed from the territory of a member
state." It was accompanied by a regulation on "the
export of cultural goods."
Conclusion
The cultural programs described above do their
best to fulfill the double requirement of Article
128-respecting the national and regional diversity of the cultures of the member states and at the
same time bringing the common cultural heritage
to the fore. If anything, greater weight has been
given to cultural diversity. This is no bad thing, as
most would acknowledge that the richness of Europe's culture lies in its diversity, and this approach can help bring EU action closer to the peopIes.
The financial allocations being made for the
cultural programs are extremely modest, and only
a small proportion of requests for aid can be
granted. However, the cultural programs are important, because they have a symbolic significance
and can provide a catalyst of taking full account of
cultural elements in Community actions under
provisions of the treaty other than Article 128. Indeed, the Amsterdam Treaty states that "the Community shall take cultural aspects into account in
its action under other (treaty) provisions .. . in particular in order to respect and promote the diversity of its cultures." Moreover, cultural programs
act as aspringboard for EU cultural cooperation
with third countries, particularly important in the
context of the accession of Central and East European states as weIl as Cyprus to the EU.
See also AUDIOVlSUAL POLICY.
-Alan Forrest

Customs 2000 Program

To ensure the proper functioning of the single
market, in January 1996 the EU launched Customs 2000, a program (due to end on December
31, 1999) to help EU businesses and citizens apply customs regulations evenly throughout the
EU, thereby avoiding distortion in the market and
combating fraud.

Customs Union
A customs union is formed when two or more
countries trade freely among themselves, establish
a common external tariff as weIl as other trade

113

regulations, and conduct a common trade policy.

The EC became a customs union in 1968. Belgium, the Netherlands, and Luxembourg, three of
the EC's original member states, formed a customs union (Benelux) in 1948.
See also COMMON EXTERNAL TARIFF; COMMONMARKET.

Cyprus
Historically, relations between Cyprus and the EU
have been affected by a number of related issues:
the entry of Britain (1973) and then of Greece
(1981) into the EC; the EC's Mediterranean policy;
and the conflict between Greece and Turkey. Each
of these issues remains relevant in the late 1990s,
but as the EU contemplates the admission of
Cyprus, the overriding problem is the division of
the island since 1974. It is unclear whether the EU
believes that Cypriot entry can only occur after a
political settlement has been reached between the
Greek and Turkish communities on the island. It is
also unclear whether Cypriot entry presupposes the
promise of closer ties between the EU and Turkey.
Yet, the EU committed itself to opening entry negotiations with the Greek Cypriot government in
Nicosia six months after the end of the intergovernmental conference (IGC) in 1997. Cypriot entry
raises the wider question, related to the IGC, of
how the EU's institutions might adapt to accommodate such microstates, given that the EU also
considered a parallel application from Malta. Ultimately, although there are major political problems
in the path of Cypriot entry, the strength of the domestic economy means that at least few econornic
difficulties would be posed by accession.
Cyprus became independent from Britain in
1960, after a bitter decolonization struggle. Cyprus
had been under British control since 1878; before
then it was part of the Ottoman Empire. Cypriot
sovereignty was to be guaranteed by Britain,
Greece, and Turkey under a treaty that preduded
either the union of Cyprus with any other state or
the partition of the island. Subsequent developments have questioned these commitments: in response to a coup against the Makarios government
in Cyprus, engineered by the colonels' dictatorship
in Athens, Turkey invaded and partitioned the island in 1974. Britain refused to intervene.1t is dear
that London now rules out any intervention that is
not supported by both the Greek and Turkish communities on the island.

114

Cyprus

Cyprus has been partitioned since the Turkish

invasion and has sustained many personal
tragedies. A so-called Green Line separates the
two communities, policed by UN forces. Nicosia
is Europe's last divided capital. The ethnic composition of the island is estimated to be 78 percent
Greek and 18 percent Turkish. However, some 37
percent ofthe island's territory is controlled by the
Turkish zone, and approximately 100,000 Turkish
immigrants have settled there since 1974.
The island is one of the most heavily militarized areas in the world. Some 30,000 to 35,000
Turkish troops outnumber their opponents by
more than three to one. In 1983, the Turkish zone
declared itself the Turkish Republic of Northern
Cyprus (TRNC). However, only Turkey recognizes this regime, whose establishment remains a
barrier to resolving the island's conflict. Since
1974, the "Cyprus question" has constantly come
before the UN and its Security Council. Indeed,
Security Council resolution 774/92 of April 1992
sets out principles for a possible resolution of the
conflict.
A year before the invasion, the EC concluded
an association agreement with Cyprus. This provided for a customs union in two stages. The fIrst
entailed a phased reduction of tariffs on industrial
goods and agricultural products. This had been
due to happen in June 1977, but the arrangement
was extended until the end of 1987. The second
stage of the agreement therefore began on January
1, 1988, and involved two phases. The first phase
(1988-1997) provided for the reduction of customs duties and quantitative restrictions by
Cyprus on most industrial goods and on fortythree agricultural products, the adoption by
Cyprus of the EU's common customs tariff, and
the harmonization by Cyprus of policies concerning competition policy and related laws. The second phase (1997-2000) is intended to complete
the customs union. Already, customs union
arrangements cover nearly 90 percent of all
Cyprus-EU trade, and the government has reduced
its duties on EU imports by over 60 percent compared to the situation twenty years ago.
EU market access is very important for
Cyprus, as well over half the island's exports go to
the EU. It was against this background that
Cyprus applied on July 4, 1990, for EU membership. Although recognizing that EU membership
would benefIt the island as a whole, the Turkish

Cypriot authorities strongly disputed the right of

the government in Nicosia to negotiate on their
behalf. The Commission's opinion on Cyprus's
application, published on June 30, 1993, found
"no insurmountable problems" in the economic
sphere but commented that entry "implies a peaceful, balanced, and lasting settlement of the Cyprus
question." In March 1995 the EU linked the conclusion of an EU-Turkey customs union with a
commitment to begin negotiations with Cyprus six
months after the end of the 1996-1997 IGC. No
date was set for their corripletion, however, nor for
eventual Cypriot entry.
It is unclear whether Turkey and the Turkish
Cypriots must be satisfIed before Cyprus enters the
EU. In March 1996, Hans van den Broek, the commissioner for external political relations, told the
joint EU-Cyprus parliamentary committee that
Cyprus might join without there being a settlement.
The Cypriot government had sought to reject any
such link and to decouple the issue of EU membership from the Greek-Turkish dispute. Although national governments have given complementary
public undertakings, private1y most of them accept
that it would be "monumental folly," as the Financial Times of March 4, 1996, put it, to admit Cyprus
to the EU without a peace settlement.
Without a settlement on the island, Cypriot
integration into the EU would be highly problematic. It would be difficult to apply the single market pro gram, as the free movement of persons is
now impossible in Cyprus. The European Parliament would likely not give its assent, as it has repeatedly called upon the TRNC to provide information on those Greek Cypriots who disappeared
in 1974 and to improve its human rights record,
not least with respect to the Greek enclave in the
Karpas peninsula. Cypriot participation in the
Common Foreign and Security Policy is also
highly unlikely in the absence of a peace settlement. The Cypriot government talked in March
1995 of possibly joining the Western European
Union (WEU). Yet EU member states are likely to
insist that Cypriot membership in the WEU come
only after a peace deal.
Paradoxically, Cyprus has a good chance of
meeting the convergence criteria for Economic
and Monetary Union (EMU). In April 1995 the
government announced that it met all the criteria,
except inflation, which it expected to meet by the
end of 1997. Such claims, however, disguise the

Czech Republic

need for Cyprus to liberalize its economy. The

Cypriot currency has been protected by capital
controls and also by the legal control of interest
rates. The Central Bank of Cyprus would also
have to be made independent. Nevertheless, the
economic fundamentals are relatively strong in
Cyprus, and the transition to EMU would be less
painful than for many existing EU member states.
Clearly, much depends on the prospects for
peace. In 1996 and 1997, both the United States
and EU launched initiatives to broker a peace deal.
The Greek Cypriot govemment, in whose interest
a settlement is obvious, made a number of offers
to resolve maUers, and in early 1996 the Italian
presidency considered appointing an EU coordinator for aresolution of the Cypriot conflict.
Nothing came of these efforts, however.
The Barcelona Declaration ofNovember 1995
envisioned a new relationship between the EU and
the Mediterranean states, including Cyprus, involving a free trade area and cooperation across a range
of economic sectors. It also sought political and security cooperation. The risk for Cyprus is that,
without a settlement on the island, it could be overtaken by other applicants and left in the wider set of
Mediterranean arrangements. In March 1995,
Turkey's foreign minister threatened to integrate
northem Cyprus into Turkey if there was not a
peace deal before Cypriot entry into the EU. Rather
than calling Turkey's bluff and reminding Ankara
of the economic benefits of its own ties to the EU,
Brussels is likely to tread warily.
Cypriot accession would oblige the EU to
adapt its institutions to the representation of a microstate. Yet, once allowed to enter, Cyprus could
prove a reliable and effective partner, both economically and politically (Cyprus supports Eurofederalism). Before Cyprus can become a full EU member
state, however, bold peace initiatives are essential.
See also MEDITERRANEAN POLICY; TABLE 6.

11 5

Bibliography
Theophylactou, Demetrios A. 1995. Security, Identity,
and Nation Building: Cyprus and the EU in Cornparative Perspective. Aldershot: Ashgate Publishing.

-Kevin Featherstone

Czech Republlc
The Czech Republic is on a fast track to EU membership, having rapidly modernized its economy
and consolidated its democracy since the revolution in 1989. Czech prospects of joining the EU
were indirectly boosted by the disintegration of
Czechoslovakia in December 1992, when poorer
and politically unstable Slovakia went its own
way. The sundering of Czechoslovakia required a
renegotiation of the EU's Europe Agreement with
that country and its replacement by separate
agreements with the Czech Republic and Slovakia
on October 4, 1993, which entered into force on
February 1, 1995, for an unlimited period. Czech
prime minister Vaclav Klaus formally presented
his country's application for EU membership to
Council president Lamberto Dini in Rome on January 3, 1996, with the understanding that accession negotiations would begin six months after the
end of the 1996-1997 intergovemmental conference. Despite its rapid transformation, the Czech
Republic still has a long way to go in terms of
adopting EU norms and standards and of modemizing its agricultural sector. This did not deter
Klaus, an ardent neoliberal and Thatcherite, from
irritating his EU counterparts by frequently criticizing the EU and its supposedly bloated bureaucracy while he was prime minister. On July 16,
1997, the Comrnission issued a favorable opinion
on the Czech application.
See also CENTRAL AND EAsTERN EUROPEAN
STATES; TABLE 6.

Dayton Accords

The Dayton accords, brokered by the United

States at an air force base in Dayton, Ohio, on November 21, 1995, brought an end to more than
three years of fighting in the former Yugoslavia. In
order to emphasize the transatlantic nature of the
peace initiative, the accords were formal1y signed
by the presidents of Bosnia and Herzegovina,
Croatia, and Serbia at a ceremony in Paris on December 14, 1995.
See also YUGOSLAVIA.

Declslon
Davlgnon, Viscount Etienne
(1932- )

Adecision is an EU legal instrument directly

binding on the individual or enterprise to which it
is applied.

"Stevy" Davignon, the Belgian public servant and,

in later life, corporate businessman, played an important role in the EC's development on two occasions. First, as political director of the Belgian foreign ministry in 1970, Davignon chaired the
committee of member-state representatives that
drafted areport on foreign policy coordination between member states. The Davignon Report laid
the foundation for European Political Cooperation
(EPC). Second, as commissioner for research and
industry (1977-1985), Davignon worked with the
chief executive officers of leading European manufacturers to promote collaboration in research and
development and boost Europe's waning position
in the global marketplace. Thus Davignon was primarily responsible for a number of EC-sponsored
programs in the early 1980s to improve European
competitiveness (most notably the European
Strategic Program for Research and Development
in Information Technology [ESPRIT] pro gram) ,
which helped lay the foundation for comp1etion of
the single market. Davignon is also remembered in
the Commission for his declaration of a "manifest
crisis" and use of European Coal and Stee1 Community emergency powers to save Western Europe's steel industry, although at a cost of thousands of jobs. This may have cost Davignon the
top Commission job in 1984, when Britain's Margaret Thatcher refused to back him as a compromise candidate for the Commission presidency reportedly because of Davignon's handling of the
steel crisis. In February 1997 Davignon presented
another influential report, this time a five-year assessment of the EU's framework programs for research and technological development.

The first thing to be said about EU decisionmaking procedures is that there are many of them. Precise1y how many depends on what is counted: all
types of procedures or just legislative procedures?
If just legislative procedures, are both "policy"
and "administrative" procedures to be counted or
on1y the former? When are variations in "standard" procedures to be regarded as sufficiently
distinctive to merit being counted as procedures in
their own right? And are informal procedureswhich in some cases are extremely important-to
be counted as weIl as formal procedures? Given
the potential for answering questions such as these
in many different ways, it is not surprising that
counts of the number of EU decisionmaking procedures frequently vary considerably.
Assuming, however, that neither too tight nor
too loose a view is taken as regards what to count,
most estimates put the number of clearly distinctive decisionmaking procedures at somewhere between 20 and 30. So, for example, in areport it issued in 1995, the Commission listed a total of 29
"main decision-making procedures provided for in
the Treaty on European Union" (TEU): twentytwo under the EC piIlar, 4 under the Common Foreign and Security Policy (CFSP) pillar, and 3 under the Justice and Horne Affairs (JHA) pillar
(Commission, 1995, pp. 80-84).
Why are there so many procedures, and what
are the main differences between them? The answers to these questions stern primarily from two
very closely interrelated facts: first, political

Declslonmaklng Procedures

117

11 8

Decisionmaking Procedures

elites-in the member states and in EU institutions-have always agreed that some types of decisionmaking lend themselves to an essentially intergovemmental approach and other types lend
themselves more to a supranational approach; second, there has never been a consensus among
elites about just where the balance between supranationalism and intergovemmentalism should be
or what precise form each should take. Among the
many overlapping issues concerning the supranationaUintergovemmental balance in procedures
that have been debated over the years, the following have generated most heat:

Which procedures should be located within

the framework of the treaties (thus automatically giving the Commission and the Court of
Justice important roles), and which should be
located outside (thus reducing the role of the
Commission, removing any role for the
Court, and making national governments the
keyactors)?
Whether inside or outside the treaties, what
powers must lie essentially in the hands of
national govemments via the European
Council and/or Council of Ministers and
what powers can be given to, or shared with,
the Commis si on, the European Parliament
(EP), and the Court?
Within the Council, for what types of decisions should unanimity be required and for
what types should majority voting be permitted?
Insofar as the EP is to playapart in decisionmaking procedures, to what extent and in
what decisionmaking areas should it have a
real and effective role-that is to say, in what
circumstances should it be confined to an advisory role and in what circumstances should
it have decisionmaking powers?

rection, a range of procedural questions has had to

be addressed. Frequently they have been so addressed amid differences and controversy as to
what should be done.
The differences and the controversy have been
most apparent since the relaunch of the EC in the
mid-1980s. Many of the problems have stemmed
from the British government's taking a much more
intergovemmentalist position than other govemments. The UK's stance, however, has not been the
only factor making for difficulties, because although all other govemments, plus the Commission and the EP, have supported extensions in
supranationalism, they have by no means been in
full accord as to its nature or its scope. As a result
of this lack of agreement, decisions about decisionmaking procedures, which are taken mainly,
but not exc1usively, in the framework of intergovemmental conferences (lGCs), have only been
possible by producing an ever more complicated
decisionmaking system. This system has seen,
over the years, the creation of both new decisionmaking procedures and an increasing range of
variations within existing procedures. Regarding
new procedures, examples inc1ude the cooperation
procedure and the assent procedure, which were
created by the Single European Act (SEA); the codecision procedure, which was created by the
TEU; and the CFSP and JHA procedures, which
were also created by the TEU. Regarding variations within procedures, examples inc1ude the use
of the cooperation procedure without Britain under
the TEU's Social Protocol (until the new Labour
government agreed in 1997 to incorporate the Social Protocol into the Amsterdam Treaty) and the
requirement that unanimity, rather than a qualified
majority, be required under the co-decision procedure when decisions are taken in two policy areas:
culture and research framework programs.
Types of Decisions

Given that decisionmaking procedures have

to be agreed to unanimously by the governments
of the member states, the absence of a consensus
on such key questions has meant that it has not
been possible to establish a simple decisionmaking framework. As new issues have come onto the
EU agenda, as existing responsibilities have
grown in importance, as procedures in some areas
have come to be seen as unsatisfactory, and as majority elite opinion has drifted (albeit unsteadily
and not without challenge) in a supranational di-

A useful way of c1assifying EU decisionmaking

procedures is in terms of the sorts of decisions to
which they apply.
Major constitutional and directional decisions. Decisions of this kind--covering such mat-

ters as treaty changes, the principles and timetable

of Economic and Monetary Union (EMU), and
EU accessions-are made by, or at least have to
be approved by, the European Council. Because it
meets for only a few days each year, the work of
the European Council is carefully prepared by the

Decisionmaking Procedures
Council of Ministers, working usually in elose association with the Commission. Decisions of the
European Council, which are taken, except in rare
circumstances, by unanimity, are political decisions and require further appropriate action by the
Commission and Council if they are to be given
legal effect.
Legislative decisions. There are four main
legislative procedures: consultation, cooperation,
co-decision, and assent. Under each of the procedures, the Council and the EP may request the
Commission to bring forward aproposal, but the
Commission alone has the formal right of initiation (apart from a very small number of exceptional cases). The principal differences among the
four procedures concem the powers of the EP,
which vary from the right to be consulted (under
the consultation procedure) to the right to exercise
a veto (under the co-decision and assent procedures). An important difference within each of the
consultation, co-decision, and assent procedures is
whether or not qualified majority voting (QMV)
applies within the Council. QMV applies to all
Council decisionmaking under the cooperation
procedure, except when the Council wishes to
take a view that differs from that of the Commission or, at second reading stage, from the EP.
In the consultation procedure, the Commission makes aproposal, either on its own initiation
or at the request of the Council or of the EP "acting by a majority of its members." The Council is
the sole final decisionmaker, but it must consult
the EP, and it cannot act (as was made elear in the
1980 Isoglucose case ruling by the Court of Justice) before the EP has issued its opinion on the
proposal. The EP cannot use its right to be consulted and to issue an opinion in such a way as to
exercise a veto, for it is obliged to issue its opinion within a reasonable time. Depending on
which treaty article the proposal is based upon,
the Council takes its decisions either unanimously or by QMV (see below for QMV rules).
The Council must act unanimously when it seeks
to amend Commission proposals (which themselves may have been amended in light of the
EP's opinion).
The cooperation procedure (Artiele 189c procedure) differs from the consultation procedure in
three main ways: it is a two-reading, rather than a
one-reading, procedure; it gives greater powers to
the EP; and the Council can always act by QMV,
except when it is in dispute with the Commission

119

or the EP. At first-reading stage, the EP issues its

opinion and then the Council establishes a "common position." At second-reading stage, if the EP
rejects the common position by a majority of its
members, the Council can only adopt the legislation by acting unanimously. Similarly, if the Commission accepts amendments approved by the EP
by a majority of its members, the Council must act
unanimously to reject or change them. As under
the consultation procedure, the Council remains
the sole final decisionmaker. Under the terms of
the Amsterdam Treaty, the cooperation procedure
was virtually abolished, and most of the areas subject to it were made subject to the co-decision procedure.
The extremely complex co-decision procedure (Artiele 189b procedure) adds a third stage to
the two stages that exist under the cooperation
procedure and gives to the EP a veto over proposals of which it does not approve. The most distinctive features of the procedure come into play if, at
second-reading stage, the positions of the Council,
which can usually act by QMV under the procedure, and the EP, acting by a majority of its members, diverge. In this eventuality a conciliation
committee, consisting of an equal number of representatives of each institution, can be convened.
If the committee agrees on a joint text, both the
Council and the EP must give their approval for it
to be adopted. If the committee cannot agree on a
joint text, the Council mayadopt it unilaterally,
but the EP, acting by a majority of its members,
has the power to veto the adoption. (The 1997
Amsterdam Treaty greatly extended the scope of
co-decision and simplified the procedure by giving up the third stage.)
The assent procedure is used for only a very
limited range of "normal" legislation and is designed primarily for certain sensitive constitutionaVpolitical issues and for some types of international agreements. Under the procedure the
Council adopts a position by unanimity, usually,
but not always, on the basis of a proposal by the
Commission. The Council's position is referred to
the EP, which may give or withhold its assent
with, in most cases, only a nominal majority required rather than a majority of all members. The
EP has no power of amendment under the procedure. If assent is given, the Council adopts the
proposal.
Common Commercial Policy decisions. Under the Common Commercial Policy (CCP), the

120

Decisionmaking Procedures

member states act as one when they negotiate with

trading partners about terms of trade. The Commission conducts the actual negotiations, but it
does so under mandates laid down by the Council
and with agreements having to be approved by the
Council. The Council can act by QMV if necessary. The EP has no formal role under this procedure, but it is usually informally consulted, especially on potentially important negotiations.
Common Foreign and Security Policy decisions. Decisionmaking under the CFSP pillar of

the TEU is primarily intergovernmental in character. The European Council is given responsibility
to "define the principles of and general guidelines
for the common foreign and security policy" (Artic1e J.8[1] TEU). Within these guidelines, the
Council mayadopt common positions (by unanimity) and joint actions (by unanimity, or by
QMV if this is agreed to unanimously). The Commission is "fully associated" with CFSP work but
does not enjoy the exc1usive right of initiative it
has under the EC pillar, for all member states also
enjoy a right of initiative. The EP has no formal
powers but does have the rights to be consulted, to
be informed, and to ask questions of the Council
and make recommendations to it.
Justice and Home Affairs decisions. Decisionmaking under the JHA pillar is very similar to
that under the CFSP pillar, except that no formal
role is assigned to the European Council.
Budgetary decisions. Since 1988, decisions
about the size and composition of the EU's budget
are taken at two stages. The first stage involves
agreement, by unanimity, at European Council
level on medium-term financial perspectives that
set down general parameters for EU income and
expenditure. The current financial perspective
covers the years 1993 to 1999. The second stage
involves agreement on the annual budget. The annual budgetary cyc1e starts with the Commission's
issuing a preliminary draft budget in the early part
of the year and continues via two readings in the
Council and two readings in the EP. If the schedule is met (which it has been since the two-stage
procedure was established in 1988), the budget is
formally adopted at the EP's second reading,
which is held at its December plenary meeting.
The Council and the EP are co-decisionmakers in
that both must give their approval for the budget to
be adopted, but the Council has stronger powers
than the EP over compulsory expenditure (mainly
agricultural), and the EP has stronger powers over

noncompulsory expenditure (the largest element

of which is structural funding).
Administrative decisions. Many decisions,
such as those involving the day-to-day management of the Common Agricultural Policy, are
administrative rather than political in character.
Responsibility for making these decisions is delegated to the Commission, usually in association
with one of three types of committee: advisory,
management, and regulatory (a practice known as
comitology). The Commission's powers are
strongest under the advisory committee procedure
(advisory committees have no formal power to
prevent the Commission acting as it wishes) and
weakest under the regulatory procedure (Commission actions require the support of these committees, which can act by QMV). There have been
frequent disagreements among the Council, the
Commission, and the EP as to which committee
procedure (if any) should apply when delegation
powers are granted.
Qua/ified Majority Voting

As has been noted, the Council takes its decisions

either by unanimity or by QMV (apart from a
small number of instances covering mainly procedural matters, where simple majority voting is
possible). When QMV applies, the voting weight
of member states is as follows:
Germany, France, Italy, the UK
Spain
Belgium, Greece, the Netherlands,
Portugal
Austria, Sweden
Denmark, Finland, Ireland
Luxembourg
Total

10
8
5
4
3

.-l
87

For proposals to be adopted by a qualified majority, there must be at least "62 votes in favor where
this Treaty requires them to be adopted on a proposal from the Commission, 62 votes in favor, cast
by at least 10 members, in other cases" (Artic1e
148[2]). In practice, legislative proposals fall under the first of these provisions, whereas the most
important application of the second provision is
under the CFSP and JHA pillars of the TEU.
Two other points should be noted about QMV
mIes. First, under the Social Protocol of the TEU
(in operation between 1993 and the revision of the
TEU by the Amsterdam Treaty in 1997), which in-

DeGasperi,Alcide(1881-1954)

volved legislative decisions being made without

British participation, a qualitied majority constituted 52 votes. Second, under the Ioannina Compromise, which the Council agreed on in 1994 in
order to accommodate fears (mainly British) about
the weakening of the size of the qualified majority
when the EU enlarged in 1995: HIf members of the
Council representing a total of 23 to 25 votes indicate their intention to oppose the adoption by the
Council of adecision by a qualified majority, the
Council will do all within its power to reach, within
a reasonable time ... a satisfactory solution that can
be adopted by at least 65 votes" (Council, 1995).
Efforts at the 1996-1997 IGe to give the four
larger member states (Britain, France, Germany,
and Italy) more clout became a major sticking
point at the Amsterdam summit on June 16 and 17,
1997. In the event, the heads of state and government maintained the status quo, but in a legally
binding protocol on enlargement, the Amsterdam
Treaty links increasing the number of votes for
larger member states to agreement by them to give
up their second commissioner. The eventual
reweighting of votes will also entail a recalculation
of qualified majority and the blocking minority.
See also BUDGET; COMMISSION; COUNCIL OF
MINISTERS; EUROPEAN COUNCIL; EUROPEAN PARLIAMENT.

Bibliography
Commission. 1995. Report for the Reflection Group.
Luxembourg: Office for Official Publications of the
European Communities.
Council. 1995. "Press Release 4061/95," issued January
lO in Brussels.
Nugent, Neill. 1994. Government and Politics oi the European Union. 3d ed. Basingstoke: Macmillan.

-Neill Nugent

Deepenlng
Deepening is the process by which the EU's competence is increased and policy scope broadened.
There is a general presumption that during enlargement (widening), the EU should also deepen
lest a wider EU mean a weaker EU.
See also ENLARGEMENT.

De Gasperl, Alclde (1881-1954)

Alcide De Gasperi was born on April 3, 1881, in
Pieve Tesino, a small village in the Trentino region,

121

which at the time was part of Austria-Hungary. De

Gasperi began his education in Trentino and completed it at the University of Vienna, where he obtained his degree in Letters and Philosophy in 1905.
Upon retuming to Trentino he became the editor of
the Catholic paper, La Voce Cattolica, which he renamed Il Trentino. At the same time, De Gasperi
began his long political career as a cofounder of the
Partito Popolare Trentino and in 1911 was elected a
member of parliament in Vienna. De Gasperi became an Italian citizen in 1918, when Trentino became a part of Italy; three years later he was elected
to the Italian parliament. In 1925 he became leader
of the Partito Popolare Italiano, forerunner of the
postwar Christian Democratic Party. Two years
later, De Gasperi was arrested and sentenced to a
four-year prison term because of his continued opposition to Benito Mussolini. Upon his early release, De Gasperi spent the next fourteen years in
the Vatican, effectively in internal exile.
After the war De Gasperi beg an his distinguished service in the Italian government: from
December 1945 until July 1953 he was prime
minister in eight successive coalitions. During this
period De Gasperi worked strenuously for European unity and began a lasting and strong friendship with two other founding fathers of European
integration: Robert Schuman and Konrad Adenauer. In recognition of De Gasperi's efforts on
behalf of European unity, he was awarded the
prestigious Charlemagne Prize in 1952 and was
elected president of the Common Assembly of the
European Coal and Steel Community (ECSC) in
1954, just months before his death.
As prime minister, De Gasperi dedicated
much of his time to foreign policy. He defended
the interests of Italy, a defeated nation, at the Paris
Peace Conference in 1946 and convinced the
United States, France, and Britain that his country
was ready to be part of the society of democratic
nations. He also fought for the return of the territory of Trieste to Italy and for Italy's participation
in the Marshall Plan (1948), NATO (1949), the
ECSC (1951), and the ill-fated European Defense
Community (EDC) (1954).
De Gasperi's dedication to the idea of a European integration has several roots. (1) He was born
in a border region and throughout the first part of
his life lived in very elose contact with people of
different languages and cultures. Early on De
Gasperi understood the importance of tolerance
and respect for ethnic and cultural differences and

122

Oe Gasperi, Alcide (1881-1954)

the need for co operation among all people. (2)

From his profound Christian faith, De Gasperi derived a commitment to the idea that sodal solidarity should extend beyond national borders. (3) Because he had lived through two devastating world
wars, De Gasperi sought above all peace between
nations, which he believed could only be obtained
through elose international cooperation. (4) De
Gasperi favored a elose alliance with other European countries and with the United States in order
to confront the Soviet Union during the emerging
Cold War. (5) He deeply believed that Europe was
already spiritually united through a common history and civilization. (6) De Gasperi realized that
Italy's democratic future and economic prosperity
would be enhanced through elose association with
other Western European countries.
De Gasperi thought that a uni ted Europe
should be achieved through elose cooperation between free and equal nations. Just as in the past
cities had combined to form nations, nations
should strive to create a higher entity. The nation,
then, should not be considered an end in itself but
a means to achieve something higher. Striving toward integration, nations should be willing to give
up part of their sovereignty for the good of all.
Sovereignty should be surrendered to central European institutions, whose establishment De
Gasperi strongly favored, notably in the fields of
defense and economic policy. However, nations
should protect their cultural identity and their languages, neither of which De Gasperi saw as an obstaele to the process of European integration.
De Gasperi also thought that a united Europe
would be committed to the ideas of pe ace and
democracy. Although favoring the establishment
of European institutions to encourage the process
along, De Gasperi never believed that Europe
should be united by decree. Nations would have to
agree to be part of the integration process. Accordingly, the process of European integration would
be slow, gradual, and prone to setbacks owing to
the resistance that nations would initially put up
against further concessions of sovereignty. Yet De
Gasperi was never pessimistic about the achievement of European unity. In that regard he found
inspiration in his own country's history. Regions
and cities that were culturally, linguistically, politically, and economically different and that had
distrusted each other for centuries nevertheless
succeeded in achieving unity. There was no doubt

in De Gasperi's mind that Europe would unite; it

was just a matter of time. Indeed, in order to
achieve unity, there was a lot more to destroy
(prejudice, cowardice, and resentment) than to
build.
De Gasperi placed a lot of hope in the ambitious project of establishing the European Defense
Community. The common army that would result
was not supposed to compete with the U.S. military establishment but to cooperate with it inside
NATO. De Gasperi never countenanced European
integration as an attempt to establish a third bloc
between the United States and the Soviet Union.
Simply put, Europe had too much to gain from its
cooperation with the United States.
De Gasperi's enthusiasm for the EDC was
due not exelusively to a perceived need to control
German rearmament but to a conviction that integration in the fie1d of defense would encourage
deeper political integration. De Gasperi therefore
favored the establishment of an elective assembly
to ensure democratic control of the common
armed forces. Accordingly, De Gasperi was the
author of Paragraph 38 of the EDC treaty, which
introduced the idea of a European Political Community. De Gasperi further believed that political
integration could only happen in conjunction with
a process of economic integration, which would
spill over from one sector to another and would
consist not just of a customs union but also of a
common market, a European central bank, and
eventually a common currency.
De Gasperi had the good fortune to see his
European ideals partially realized with the establishment of the ECSC in 1952 but also witnessed
the political struggle over ratification of the EDC
treaty. Only twelve days after De Gasperi's death,
the French National Assembly decisively rejected
the proposed defense community.
Bibliography
Arnoulx de Pirey, Elisabeth. 1991. De Gasperi: Le nre
Italien de I'Europe. Paris: Tequi.
Carrillo, Elisa A. 1965. De Gasperi: The Long Apprenticeship. Notre Dame, IN: University of Notre Dame
Press.
De Gasperi, Maria Romana, ed. 1979. De Gasperi e
L'Europa. Brescia: Morcelliana.
Petrilli, Giuseppe. 1975. La Politica Estera ed Europea
di De Gasperi. Roma: Edizioni Cinque Lune.

-Salvatore Lombardo

DeGaulle, Charles(7890-7970)

De Gaulle, CharIes (1890-1970)

Charles de Gaulle, president of France between
1958 and 1969, is renowned for his championing
of the nation-state and hostility toward the EC. Indeed, de Gaulle provoked a number of crises in
the EC in the 1960s, yet his contribution to European integration and his attitude toward the Community were far from negative. Despite its threat
to French sovereignty, the EC offered de Gaulle an
unprecedented opportunity to promote two overriding objectives: French economic advancement
and an institutional framework in which to embed
Franco-German rapprochement. Thus the EC
flourished in its early years not because de Gaulle
reluctantly acquiesced in it--either for legal reasons, or because his government depended on the
support of the pro-EC independents in the National Assembly, or because he was preoccupied
with the war in Algeria-but because he strongly
supported a certain amount of sectoral economic
integration.
Apart from industrial rejuvenation, de Gaulle
saw in the EC a unique opportunity to modernize
the large and cumbersome French agricultural sector. The solution lay in the proposed Common
Agricultural Policy (CAP), which would provide a
Community-wide outlet for French produce, guarantee high prices in the EC regardless of low
prices on the world market, and subsidize the export of surplus produce outside the EC itself. Although subsequently denigrated as a drain on EC
resources and an impediment to international
trade accord, in the 1960s the CAP proved a vital
instrument of Community solidarity and helped
restructure declining Western European agriculture. More important, without the CAP there
would not have been a Community of any kind.
Just as the French assembly had successfully insisted on agricultural provisions in the Treaty of
Rome, so, too, had de Gaulle demanded implementation of those provisions as a condition of
implementing the treaty as a whole. The industrial
customs union and common external tariff came
into being because of, and not despite, the CAP.
De Gaulle's generally positive position on
European economic integration complemented his
policy toward Germany. Whereas de GauBe had
left the French political stage in 1946 advocating a
punitive policy toward a weak, divided Germany,
he returned in 1958 to a radically altered Europe an scene. With Germany reindustria1ized and

123

rearmed, de Gaulle abandoned his earlier position

and espoused instead the then-orthodox French
policy of reconciliation and rapprochement. De
Gaulle cemented this policy in an exceptionally
elose relationship with Chancellor Konrad Adenauer. Both leaders believed that their countries'
future, and the future of Europe, depended above
all on elose Franco-German accord. The Elysee
treaty, signed by de Gaulle and Adenauer in January 1963, symbolized the elose friendship between them and their countries and became the institutional basis for Franco-German leadership in
Western Europe.
Apart from developing a elose relationship
with Adenauer, de Gaulle is best known in the
context of the EC for keeping Britain out and for
curtailing the powers of the European Parliament
(EP) and Commission. Once again, both seem
negative achievements. But allowing Britain into
the Community in the early 1960s would in all
likelihood have thwarted the CAP, undermined
economic integration, and turned the customs
union into a broad free trade area. Shortly before
signing the Elysee treaty in January 1963, de
GauBe had vetoed Britain's application for EC
membership. Apart from economic considerations, at issue was de GauBe's conception of the
Community and his espousal of a "European Europe." The Treaty of Rome could only succeed, he
thought, in the context of a broader po1itical
framework of intergovernmental cooperation.
Such cooperation was an essential prerequisite for
the emergence of an economically strong, politicaBy assertive, and militarily independent Europe.
As Britain's worldview differed fundamentaBy
from France's, de GauBe could not take seriously
Britain's candidacy for Community membership.
He vetoed Britain's second membership application in 1967 for essentially the same reasons.
De GauBe's stand against the Commission in
1965 epitomized his hostility to supranationa1ism.
The epic dash between de GauBe and Commission president Walter HaBstein, personifying the
conflict between nationalism and supranationalism, erupted in the infamous Empty Chair Crisis
of 1965-1966. An ambitious Commission proposal to fund the CAP from the Community's own
resources, and in the process extend the EP's budgetary power, caused de Gaulle to withdraw
French representation in the Council of Ministers
in July 1965 (hence the "Empty Chair"). But the

124

Oe/ors, Jacques (7925- )

crisis took a new twist when de Gaulle announced

at a press conference in September 1965 that
France would not accept a provision of the Rome
treaty, due to be implemented on January 1, 1966,
introducing qualified majority voting (QMV) in
the Council on a limited range of issues.
De Gaulle's attack on QMV and insistence on
a national veto over EC legislation greatly exacerbated the situation. The other member states
shared France's concern about being outvoted in
the Council but argued that important national interests were unlikely ever to be ignored. The results of the December 1965 French presidential
election brought de Gaulle back to the negotiating
table. The crisis dominated the e1ection, with de
Gaulle's opponents campaigning in favor of
France's retaking its seat in Brussels. Deprived of
an absolute majority in the first round of balloting,
de Gaulle and Fran~ois Mitterrand contested the
second round alone. As expected, de Gaulle won
but by the surprisingly narrow margin of 11 percent. The result demonstrated the domestic limits
on de Gaulle's EC policy. The general got the
message; a week later he announced that the
French foreign minister would attend a meeting of
his EC counterparts in Luxembourg.
The crisis finally ended with the so-called
Luxembourg Compromise: an agreement to disagree over majority voting. While maintaining the
principle of majority voting, the compromise acknowledged that "when very important issues are
at stake, discussions must be continued until unanimous agreement is reached." The Luxembourg
Compromise heightened member states' awareness of each other's special interests and increased
their reluctance to call a vote in the Council even
when no vital interest was at stake. As a result, decisionmaking in Brussels virtually ground to a halt
until the early 1980s, when a huge legislative logjam finally convinced member states to move toward majority voting.
De Gaulle devoted his remaining years in office mostly to French foreign policy beyond the
Community, notably to an effort to underrnine
NATO and establish good relations with the Soviet Union and its Eastern European satellites.
These policies proved spectacularly unsuccessful.
At the same time, de Gaulle neglected domestic
affairs and was caught totally unawares by the student and workers demonstrations of May 1968,
which almost toppled not only his government but
also the Fifth Republic. Although de Gaulle sur-

vived politically, the events of May 1968 demolished his personal popularity and fatally compromised his credibility as president. Moreover, the
crisis further weakened France economically and
caused serious financial instability. De Gaulle
continued as president for less than a year. Defeat
in two referenda in April 1969, one about the
structure of local government and the other about
reform of the senate, prompted his departure.
Those relatively inconsequential issues, on the
outcome of which he had staked his presidency,
brought the "decade of de Gaulle" to an abrupt
end.
De Gaulle bequeathed a mixed legacy to the
EC. On the one hand he was instrumental in getting the EC going in the early 1960s, but on the
other he severely impaired its development toward
supranationalism. He also kept the EC small, restricting it to the so-called Little Europe of the Six
centered on the Franco-German core. But Europe
and the EC had changed much during his eleven
years as president. Most important, Germany had
grown economically and was becoming more assertive politically. By 1969, France was no longer
economically and politically the most powerful
member state. That fact was not lost on Georges
Pompidou, de Gaulle's successor, who sought to
compensate for the changing balance of power in
the Community by allowing Britain to join. Thus,
within three years of de Gaulle's departure, his
Gaullist successor endorsed the EC's first enlargement.
See also FRANCE.

Bibliography

Camps, Miriam. 1966. European Unification in the Sixties: From the Veto to the Crisis. New York: McGraw-Hill.
De Gaulle, Charles. 1971. Memoirs 01 Hope: Renewal
and Endeavor. New York: Simon and Schuster.
Lacouture, Jean. 1991. De Gaulle: The Ruler,
1945-1970. London: Collins-Harville.

-Desmond Dinan

Delors, Jacques (1925- )

Jacques Delors was president of the Commission
for a decade, from January 1985 to December
1994. Those ten years, the most important in the
EC's modern history, were remarkable for the importance the Commission assumed as agenda setter and energizer of European integration. They

Oe/ors, Jacques (7925-)

saw the Single European Act (SEA), completion
of the single market, changes in Europe's budgetary procedures and scope, development of regional redistribution policies, commitment to Economic and Monetary Union (EMU), progress on
the "social dimension," German unification, the
end of the Cold War, and the 1991 intergovernmental conferences (IGCs). The decade ended in
serious new difficulties for Europe, however, epitomized by the Treaty on European Union (TEU)
ratification crisis.

Background
Jacques Delors was born in Paris in 1925, son of
an employee of the Banque de France. He grew up
in an urban Catholic setting and was involved with
the progressive Catholic youth movements. Young
Delors did not attend university but instead began
work at the Banque right out of secondary school.
He rose quickly while learning international financial matters. Highly disciplined, dedicated to constant hard work, and committed to a Left -Catholic
version of social change, Delors turned early to
trade unionism, even refusing promotion at the
Banque to be an activist. Delors used his expertise
in economics to teach in union schools, write artieIes for the union's journal, and, eventually, run
the union's research department. Delors became
an important figure in the generation of Christian
activists who would later play major roles in
French life and, in particular, the renovation of the
French Left.
Delors entered public life in the 1960s, moving into the upper reaches of the Planning Commission, not the last of Jean Monnet's creations
that he would help to energize. In 1969, in the aftermath of the "May events" (student and worker
protests) and Charles de Gaulle's resignation from
the French presidency, Delors became social affairs adviser to Gaullist prime minister Jacques
Chaban-Delmas, promoting New Society reforms
such as a planned and negotiated program of public sector income development that would double
as an incomes policy. Delors was also responsible
for an innovative program of job training. The mature Delorist vision resulted from these experiences. Delors saw the market as indispensable allocator of resources, decisionmaker, and source of
economic dynarnism but believed that on its own
it could guarantee neither equity nor a moralized
social order. These things depended upon "dialogue" among different groups--employers and

125

labor in particular-to reach c1earer understandings about what had to be done and what could be
shared. "Dynamic compromise," based on discussion, was the secret of success.
Behind this was Delors' conviction that society could not be reduced either to a market writ
large or a utilitarian aggregation of isolated individuals. Neither socialist statism nor collectivist
transformation were solutions either. A moralized
society grew from delicate interdependence in
which social groups granted one another active
solidarity. Individuals became responsible through
engagement with their social group in the active
promotion of this solidarity.
Delors, a moderate, shared none of the "rupture with capitalism" passion that was the French
Left's stock in trade until the early 1980s. He was
thus somewhat out of place in 1970s France when
schematic Left-Right ideological confrontation
dominated the scene. He nonetheless made his
way into the new Socialist Party, where his support for Fran~ois Mitterrand in intraparty struggles won him the last electable place on the 1979
Socialist list to the European Parliament (EP),
where he chaired the monetary affairs committee
and befriended legendary Community activists
like Altiero Spinelli.
After Mitterrand won the French presidency
in 1981, Delors became finance minister, where
he quickly found hirnself hostage to policies that
he found unwise: nationalization, inflationary
Keynesianism, and expensive new social programs. Managing the franc's stability was particularly difficult. France's deteriorating economic situation pushed Delors to the fore. He was first to
demand a "pause" in reforms and later was the architect of the Left's first austerity program in
1982. He was also central in the 1983 realignment
of the European Monetary System (EMS), which
was the turning point for French politics that led
to new strategies within the context of European
integration. The end of Delors's tenure as finance
minister in 1984 made him available for his new
duties in Brussels.

President Oe/ors
The Delors Commission began in January 1985
with a flurry of activity that quickly consigned Europessimism to memory. Delors and the Commission prepared their white paper on completing the
internal market, the launching pad for renewal of
European integration. An intergovernmental con-

126

De/ors, Jacques (1925- )

ference to update the Treaty of Rome produced

the SEA, which the Commission in large part also
shaped. Tbe SEA changed Council decision rules
to allow qualified majority voting, initiated the cooperation procedure granting amending power to
the EP, and expanded the Community's competence, in particular to economic and social cohesion.
Tbe next major project was the Paquet Delors
(Delors I), a three-dimensional program of budgetary innovation introduced in 1987. It first proposed new multiyear budgeting projections in exchange for Commission pledges of budgetary
discipline. Tbus, in future the EC would be spared
the annual budgetary squabbles that had often
been disruptive. Instead, every fIve years or so
there would be grands rendez vous to set out the
EC's medium-term fInancial future. Next, Delors 1
reformed the Common Agricultural Policy (CAP)
by introducing price stabilizers. Finally, and most
important, it reformed the structural funds: the
EC's different regional development instruments
were regrouped around new objectives and their
funding doubled over fIve years. Tbe bulk of this
new funding was earmarked for the EC's lessdeveloped areas through a new planned and programmed approach run by the Commission in
"partnership" with member states and regions.
Tbe rest would go to help reverse deindustrialization, promote rural redevelopment, and provide
training and other opportunities for the long-term
unemployed and youth.
After the Delors package was passed in 1988,
Delors began a new campaign for EMU, first persuading the European Council to set up the Delors
Committee, composed of central bankers and experts. The committee, marked in particular by
tough struggles between Delors and Hans-Dtto
Phl of the German Central Bank, produced a report that argued that EMU was needed because it
was implied by the single market: without EMU,
currency fluctuations might undermine market
unifIcation. Tbe deeper argument was political: by
pooling sovereignty in economic policy areas,
EMU would bring a huge leap forward in European integration. Tbe report, which Delors largely
wrote, set out a three-stage plan. Tbe first stage,
beginning with the liberation of capital flows in
1990, would involve "mutual surveillance" of national budgetary policies to promote convergence.
Tbe second stage would establish a European System of Central Banks to prepare the coming of a

single European currency. Tbe third stage would

bring full EMU and a single currency. In its initial
formulations, EMU was to be both "economic"
and "monetary." Europe needed an "economic
policy government" to give general guidance plus
an independent monetary policy body that would
respect those economic policy guidelines.
The European Council initiated movement
toward an IGC to consider the treaty changes that
EMU necessitated. At that point Delors turned toward social policy, an area not weIl covered in the
Treaty of Rome. Moreover, member-state opposition, particularly from the UK, to changing the development of social policy had been ferocious.
Less had been achieved, therefore, than even the
treaties allowed. Accordingly, Delors's 1989
Community Charter of Social Rights (Social
Charter) was designed less to break new ground
than to prompt member states to make good on
what already existed in the treaties. The action
program that followed inc1uded thirty-seven proposals to be introduced by the end of 1992. Most
were passed by qualifIed majority voting, enabling the Community to build solid regulations
covering workplace health and safety. Where unanimity was needed, the British vetoed. Proposals
for European Works Councils in multinational
companies, the regulation of "atypical" work, maternity and parental leave, and other important
matters were blocked. Social Dialogue among
Euro-level social partners, the other dimension of
the Delors social program, became important during and after the 1991 IGCs.
Because the EC had been very much a creation of the Cold War, the collapse of the Soviet
bloc was a huge systemic shock. More perceptive
than most about the implications of the collapse,
in July 1989 Delors persuaded the leading industrialized countries to allow the EC to coordinate
aid to Poland and Hungary (later expanded to
other Central and Eastern European states). He responded with great perspicacity to German unifIcation and worked to facilitate the entry of the former East Germany into the EC. He also promoted
association treaties with the newly ex-socialist
countries, thereby granting aid and opening up
prospects for ultimate EC memberships. He then
initiated negotiations with European Free Trade
Association countries to establish a European
Economic Area and encouraged support for the
European Bank for Reconstruction and Development as weIl.

Oe/ors, Jacques (7925-)

In 1990, prompted by German chancellor
Helmut Kohl and by Mitterrand, De10rs supported
calling a second IGC on political union, to occur
simultaneously with the EMU conference. Having
taken to admonishing the EC as "an economic giant and political dwarf," Delors shared the German and French leaders' hope of promoting new
Euro-level foreign and defense policies. The other
item on the agenda was giving greater democratic
legitimacy to the EC. The road to Maastricht was
thus opened.

De/ors and the Difficu/t Beginnings of the EU

De10rs originally hoped that the two IGCs would
together amount to a giant leap forward for European integration, but results fell far short. Discussions about EMU, well prepared by the De10rs Report, brought predictable conc1usions. Britain was
given the possibility of opting out of the single
currency. The Germans, preoccupied with unification, diminished the importance of Delors's Stage
2 by putting off the European central banking system until Stage 3 (substituting for it a weaker European Monetary Institute). More important, the
Germans also obliged stringent "convergence criteria" for judging potential EMU members in the
realms of price stability, interest rates, budget
deficits, and debt. This stress on budgetary convergence made the proposed EMU less a matter of
economic policy than of monetary constraint, a
shift to which De10rs objected strongly. Finally,
dates were set for movement to EMU: it would be
1997 if a majority of member states fit the convergence criteria; 1999 definitively for any who fit.
The TED thus decided upon a multi-speed Europe
for economic and monetary matters: those who
qualified could proceed directly to EMU and a
single currency; those who initially did not qualify
would need arrangements to join later; those who
refused the single currency (Britain and later Denmark) needed yet another path.
The political union negotiations were
messier. The constitutional result was a three-pillar "temple": the EC, an intergovernmental Common Foreign and Security Policy (CFSP), and intergovemmental Cooperation on lustice and
Horne Affairs. The pillars were joined by a common preamble. De1ors, who caused a stir by insisting upon Europe's "federal vocation," opposed
this arrangement in favor of a "tree" whose different functions would be connected to a common
Community "trunk." The new CFSP was so

127

weighed down by cumbersome decisionmaking

rules that very little could come of it (excepting
perhaps an infelicitous split between the EC's
Common Commercial Policy, conducted in Community ways, and "foreign policy," conducted intergovemmentally). The pillar on lustice and
Horne Affairs was even less substantial. The other
major change, in the interests of "democratic legitimacy," allowed the Council and the EP to codecide important legislative matters. The procedures were so complicated and opaque, however,
that any advance in democracy was obscured. The
treaty also made an important new commitrnent to
"subsidiarity": the EU should only act where and
when it could achieve results that member states
could not. Lack of precision made it difficult to
achieve the c1arification of national and transnational roles that subsidiarity implied, however.
The TEU was no triumph for De1ors. The
Commission had very little influence over the irnportant political union negotiations and, beyond
its substantive weaknesses, the final treaty text
was a literary disaster. De10rs did manage one
coup during the final hours of negotiations, however. Throughout the year-long talks it had become manifest that Britain's conservative govemment wanted no change in the Community's social
policy mandate. At the Maastricht summit social
policy tumed out to be the final sticking point,
since the British refused to accept even the most
minimal wording changes to allow the talks to
conc1ude. U sing Kohl as an intermediary, De10rs
placed a Commission paper on the table to create
a Social Protocol to the new treaty. This allowed
eleven of the twelve member states to move forward without the British on a somewhat extended
range of social policy matters. The wording of the
protocol, derived from the Commission's own
proposals to the political union talks and later endorsed by the "social partners," contained an ingenious notion. The Commission could dec1are that
it intended Community action in a specific social
area. Then the social partners could decide to negotiate as a substitute for legislation. If the negotiations conc1uded in a contract, Council approval
could give it the force of law. This "negotiate or
we williegislate" c1ause broke the deadlock in social dialogue. The first negotiations, in 1994, were
on European Works Councils. They broke down,
and legislation followed. But very quickly thereafter, on the parental leave issue, the first genuine
European "collective agreement" was conc1uded.

128

Oe/ors, Jacques (1925- )

Maastricht was a turning point, but one that

marked the end of the post-1985 renewal of European integration rather than the qualitative leap
forward that Delors had wanted. The Commission
continued business as usual after Maastricht, promoting areform of the CAP in 1992 that the next
year he1ped completion of the Uruguay round of
the GATT. Delors used the GATT deadlineas
pressure to move the CAP away from its wasteful
price support system toward subsidized land setasides with fewer perverse incentives to overproduction, land pollution, and international dumping
of surpluses. In 1992 De10rs also managed to get a
second budgetary package (Delors II) through the
European Council. Among other things it proposed doubling the structural funds yet again by
1999.
Despite these achievements, dark c10uds
gathered over Delors's last years. The difficulties
in ratifying the TEU, beginning with the negative
Danish referendum in June 1992, announced the
change in weather. Sold as a cure-all for Europe's
economic problems, the single market had failed
to deliver: growth rates did not rise and unemployment continued to soar, in part as [mus rationalized for market integration. In this context, the
glaring limits of the social dimension signaled that
the single market was more for business than for
people. Ordinary Europeans evidently feIt let
down. The massive crisis in the European Monetary System that began in late 1992 intensified
doubts and cast shadows over the EMU schedule.
The coming of recession in 1992 made things
even worse. Member states, under pressure from
electorates, began to pull back from new European
commitments.
Delors's last major effort was a 1993 white
paper, Employment, Growth and Competitiveness,
meant to contribute to a new "model of development" for Europe. The key issue was Europe's
chronically rising levels of unemployment. Europe's growth levels and ability to create new jobs
had fallen behind other areas, even if the single
market had limited the damage. The EU needed to
promote an "information society." Labor markets
should be made more flexible through enhanced
lifelong educational commitments, active labor
market policies, and social pacts in which workers
and employers agreed to share productivity
growth between wages and investment. Social
protection systems should eliminate disincentives
to labor market participation and burdens, particu-

larly on employers, that discouraged hiring and investment. The EU could facilitate the coming of
such reforms by promoting the major public
works pro grams announced in the TEU's transEuropean networks in transport, telecommunications, and energy infrastructures. The entire white
paper was a proactive reflection aimed at preserving what Delors feIt to be best about the European
model of society, while resisting the sirens of "all
market" neoliberalism. Alas for De1ors, the white
paper turned into more of a last political will and
testament than a program for change.
The Oe/ors Oecade in Retrospect
The De10rs decade brought the most ambitious efforts to promote European integration since the
years immediately following the EC's launch. Accomplishments were huge, but the decade ended
with the EU in crisis.
De10rs and the other major promoters of renewed European integration had hoped to complete the internal market, as set out in the Rome
treaty, while engineering as much spillover as possible into regulatory and political areas. The strategy was flawed. The his tory of the EC demonstrated that spillover into political and quasi-state
areas (state building) was contingent upon, but in
no way an automatic product of, market building.
What had happened by the early 1990s was that
De1ors's market building had succeeded, whereas
spillover toward state building largely failed. For
De1ors, whose central purpose was to pyramid resources earned from the single market pro gram
into political areas to preserve the European
model of society, this was a defeat.
De10rs had also gambled that the policy
course of the EC, beginning with 1992, would
lead to an attenuation of Europe's democratic
deficit. Despite reforms to give the EP more
power, this gamble was also lost. What happened
was that aIthough the single market program
"marketized" a number of areas in which member
states had earlier made democratic public decisions and thus removed those areas from politics
altogether, national political forces largely failed
to Europeanize their own activities. Reforms to
grant the EP more power were blunted by the
complexity and opacity of the new procedures. If
anything, the democratic deficit had worsened by
the end of 1994.
Perhaps the best way to understand the Delors decade is as the culmination of the founding

Oe/ars /

moment of European integration rather than the

beginning of a new stage. In particular, the implicit "finality" ofEurope's founders, that integration would produce something resembling a federated nation state writ large, looked less and less
meaningful. Delors had worked feverishly to
deepen Europe before widening it. Implied in this
was a commitment to a single community. The
end of the Cold War and the prospect of EMU
threatened the constitutional structures of the EU
that had already been built. Integrating the newly
independent states of Central and Eastern Europe
became an urgent task. If the EU could not help to
build new economic, political, and security interdependencies for the post-Cold War world, the
costs in terms of democratization and peace could
be very large.
But it was quite inconceivable to construct
such interdependencies through complete membership for the Central and Eastern European
countries in the EU. A Europe of "variable geometry" would have to be built over the medium term
in which different countries might be members of
different dimensions of the EU, some political,
others economic, still others in both areas. This
implied different types of affiliation that would
put new members on track toward more complete
membership at some later moment. It would be
difficult to do in a setting in which some existing
members did not believe in political integration at
all. Finally, the influx of a large number of new
members, however affiliated, meant a complete
redesign of Europe's institutions that, planned for
six members, were creaking and groaning with fifteen. These fundamental new tasks were for Delors's successors to resolve.
In addition, the traditional Monnet method of
"integration by stealth," through clever promotion
of spillover from market to politics, had also
reached the end of its useful road. Although Delors had used this model of integration, building
Europe behind the backs of ordinary Europeans
could only work as long as Europe did not impact
unduly on their daily lives. It ceased to be so successful when the single market beg an to affect
people tangibly. Equally important, the Monnet
method had proven itself largely ineffective at
promoting spillover from economics to politics.
Building asolid political dimension to European
integration could not be accomplished either by
market-building engineers in Brussels or by foreign ministers making deals behind closed doors.

129

It had to be done openly and democratically. Find-

ing a new method for proceeding and a new way

to confront the challenge of political integration
were also left to Delors's successors.

Bibliagraphy
Delors, Jacques. 1975. Changer. Paris: Stock.
---.1988. La France par I'Europe. Paris: ClistheneGrasset. Translated as Dur Europe. London: Verso,
1991.
- - - . 1992. Le Nouveau Concert Europeen. Paris:
Odile Jacob.
- - - . 1994. L'Unite d'un homme. Paris: Odile Jacob.
Delors, Jacques, with Philippe Alexandre. 1985. En sortir ou pas. Paris: Grasset.
Grant, Charles. 1994. Delors: Inside the House That Delors Built. London: Nicholas Brealey.
Hellman, lohn. 1981. Emmanuel Mounier and the
Catholic LeJt, 1930-1950. Toronto: University of
Toronto Press.
Maris, Bemard. 1993. Jacques Delors, Artiste ou Martyr. Paris: Albin Michel.
Milesi, Gabriel. 1985. Jacques Delors. Paris: Pierre Belfond.
Rollat, Alain. 1993. Delors. Paris: Flammarion.
Ross, George. 1995. Jacques Delors and European Integration. Cambridge: Polity Press.
Winock, Michel. 1995. Histoire de la revue "Esprit."
Paris: Seuil.

-George Ross

Delors I
In February 1987, Comrnission president Jacques
Delors unveiled an ambitious budgetary package.
Officially called Making a Success of the Single
Market (because many of its provisions related to
the recently launched single market program), the
package subsequently became known as Delors I
to distinguish it from a similar Delors rr budgetary
package five years later. The first Delors package
had four parts: (1) Common Agricultural Policy
(CAP) reform to take account of changes in production and international trade; (2) reform of the
structural funds to make them effective instruments of economic cohesion (structural policy
was reorganized around new objectives, and the
amount of the funds doubled over five years); (3)
adjustment of the level (raising the ceiling from
1.16 percent of GNP in 1987 to 1.4 percent in
1992) and breakdown of own resources; and (4) a
Comrnission pledge of "budgetary discipline."
The Delors I package was highly controversial: the Commission and the poorer, southern

1 30

De/ors 11

member states were determined to win a doubling

of the structural funds because of the inherent
danger of greater imbalances in a single market,
but the rich, northern countries balked at paying
substantially more money to the south. The European Council in Copenhagen, in December 1987,
failed to resolve the issue. Germany's chancellor
Helmut Kohl, then in the council presidency, convened a special summit in Brussels in February
1988 to try again to reach agreement. There he
and Spanish prime minister Felipe GonzaIez, representing the rich north and the poor south, respectively, hammered out an agreement that, according to some comrnentators, amounted to a
second Marshall Plan for Europe.

Delors 11
Delors 11 is the popu1ar name for the budgetary
package proposed by Comrnission president
Jacques Delors to pay for imp1ementation of the
ambitious Treaty on European Union (TEU). The
package, which wou1d give the EU a budget 33
percent greater than the existing EC budget,
sought to cover the cost of three new responsibilities: establishing a cohesion fund to provide assistance to the EU's poor countries (Greece, Portugal, Ireland, and Spain) in the run-up to Economic
and Monetary Union (EMU), improving EU industries' international competitiveness, and meeting the EU's greatly expanding foreign and security policy obligations. The fate of De10rs II soon
became embroiled in the TEU ratification crisis
and nearly fell victim to Germany's seeming inability to contribute substantially more money to
the EU at a time of pressing domestic political and
economic problems relating to reunification. The
European Council failed to resolve the issue in
Lisbon in June 1992 but finally reached agreement
on the package in Edinburgh in December 1992.

Delors Plan (for Economic and

Monetary Union)

See DELORS REPORT.

Delors Report
The European Couneil in Hanover in June 1988
recalled the Single European Aces reference to
Economic and Monetary Union (EMU) and decided to appoint a committee to consider the mat-

ter further. Commission president Jacques Delors

chaired the committee, which subsequently bore
his name. The other members were the EC member states' central bank governors, another commissioner, and three independent experts-all acting in a personal capacity. The committee
completed its report, officially entitled Report of
the Committee for the Study of Economic and
Monetary Union but popularly known as the Delors Report or the Delors Plan, in April 1989.
The report outlined three stages by which
member states could achieve EMU. Stage 1 involved the establishment of free capital movement
in the EC and c10ser monetary and macroeconomic cooperation between member states and
their central banks. Stage 2 called for a new European system of central banks to monitor and coordinate national monetary policies. Stage 3 envisioned "irrevocably fixed" exchange rate parities,
with fuH authority for economic and monetary
policy passing to EC institutions. The European
Council discussed the Delors Report at the June
1989 Madrid surnmit and decided to launch Stage
1 on July 1, 1990. Six months later, at the December 1989 Strasbourg summit, the European Couneil (despite British objections) decided to convene
an intergovemmental conference (IGe) to determine the treaty revisions necessary to move to
Stages 2 and 3. The IGe opened in Rome in December 1990 and conc1uded at the Maastricht
summit in December 1991. To a great extent the
Treaty on European Union's provisions for EMU
follow the contours outlined in the Delors Report.
See also ECONOMIC AND MONETARY UNION:
POLITICAL ISSUEs; ECONOMIC AND MONETARY
UNION: TOWARD A SINGLE CURRENCY.

Democratlc Defielt
In the mid-1990s it was generally accepted that
the EU suffered from a democratic defieit. Indeed,
it was a comrnon jibe that the EU would itself fail
to meet the democratic conditions for membership
that it imposed on all applicant states. Yet forty
years earlier the democratic basis of the integration process was contes ted by virtually no one.
Such a radical change in the c1imate of opinion
since that time arose out of the growth in the competence of European institutions. As these competences were extended, so the issues of democratic
control and popular participation became more
important. Increasingly divergent opinions

Democratic Deficit

emerged as to how to make the institutions more

democratic. The role of the European Parliament
(EP) was at the center of much of this argument,
but all European institutions were caught up in a
broader debate about the possibility of developing
democracy at the European level.
In the early years of European integration, the
supporters of integration were primarily concemed to ensure that member states were persuaded to share sovereignty within specific policy
sectors with the active encouragement of the
Commission. The EP was perceived as a useful
supportive body with the potentially significant
power of censure over the Commission. The provision in the Treaty of Rome for the institution to
be directly elected was of major importance but of
little direct effect, at least until Charles de Gaulle
had ceased to be president ofFrance (in 1969).
The opponents of moves toward supranationalism stressed the importance of the role of the
Council of Ministers and the ability of member
states to exercise veto rights in defense of national
interests. They insisted on the restricted character
of the competences of the Community and the
need for all states to agree before they could be
extended. As for the EP, it could not be seen as a
significant competitor with national parliaments:
it only had consultative powers in relation to legislation, and its members were essentially concemed with national issues, as (until 1979) they
were all drawn from national parliaments.
However, the relationship between the extension of Community competences and the role of
the EP was brought into sharp relief by the debate
over Community financing at the end of the
1960s. In 1970 the Community moved from a system of national contributions to a budget financed
by own resources (resources that belong to the
Community and not to the member states). A
number of govemments and parliaments, notably
the Dutch, were only willing to accept this change
on condition that parliamentary control of the European purse was exercised at the European level.
Hence the treaty changes of 1970 and 1975 that
gave significant budgetary powers to the EP.
This change in the powers of the EP and the
prospect of direct elections led to a review of relations between the EP and national parliaments.
The Vedel Report (Commission, 1972) noted that
the extension of the Community's powers meant
that national parliaments had lost legal and de
facto powers. It went on to argue that "the logic of

1 31

a democratic system would require that this loss

of parliamentary power at national level should be
compensated at the European level," and put the
case in favor of greatly extended legislative rights
for the EP, a higher level of accountability of the
Commission to the EP, and closer ties between the
EP and national parliaments.
This agenda, designed to establish the norms
of liberal democratic govemment at the European
level, has been central to the activity of the EP
throughout the intervening years. Particularly
since it has been directly elected, the EP has argued that its status as a representative institution
legitimizes its role on behalf of the European electorate in favor of a greater parliamentary presence
inside the institutions of the EU.
The EP's strategy has been extremely successful. In terms of legislation, the EP has won an
increased role, first through the cooperation procedure introduced under the Single European Act
and then through co-decision, which was included
in Article 189b of the Treaty on European Union
(TEU). In the 1996-1997 intergovemmental conference (IGC), the extension of the latter procedure was a central, successful objective of the parliament's efforts, designed to ensure that all
legislation requires the support of the peoples of
Europe as expressed by the EP as weIl as that of
the states of Europe in the form of the Council. Indeed it is often argued that further use of qualified
majority voting (QMV) makes such an extension
of co-decision an essential democratic safeguard,
ensuring a parliamentary voice in the legislative
procedure. Without it not only would the EP be
marginalized but so would national parliaments:
QMV inevitably tends to weaken the scrutiny that
the latter can exercise, however effective they are
in holding their govemments to account.
The EP has also made significant headway in
its efforts to strengthen the accountability of the
executive by winning a say over appointrnents to
the Commission. In particular, it obtained the right
under the TEU to give its opinion on the prospective president of the Commission and to give a
vote on the Commission as a whole. This latter
right it extended unilaterally by instituting aseries
of confmnation hearings for all the members of
the Commis sion. Here too the EP has indicated
the direction it would like future reform to take: it
wishes in particular to be able to choose the president of the Commission from a number of candidates proposed by the European Council.

132

Democratic Deficit

At the same time, the EP has recognized that

accountability for decisions extends beyond appointment procedures and that the extension of the
competence of the EU poses an ever greater challenge to parliamentary institutions faced by powerful bureaucratic interests. The EP's own role in
exercising scrutiny remains very limited in a number of areas. It has deplored its exc1usion (and indeed that of all parliaments) from the decisionmaking process under the second and third pillars
of the TEU relating to the Common Foreign and
Security Policy and Cooperation on Justice and
Horne Affairs. It has also objected strongly to the
system of secondary legislation that gives the
member states, alongside the Commission, a significant say under the so-called comitology procedures but that exc1udes the EP even when it is involved as an equal partner with the Council in the
adoption of the relevant primary legislation under
co-decision.
The EP has devoted considerable energy to
persuading national parliaments of the validity of
this agenda and of the interests that all parliaments
share in exercising control over their respective
executives in relation to the EU. By no means
have all national parliaments been convinced.
Even those parliaments, such as the German and
Dutch, that broadly support the EP's view of how
legislative power and the accountability of the executive should be organized at the European level
have wished to reinforce their own control over
the development of the EU. In Germany, for example, the constitution was revised to inc1ude an
extra artic1e on Europe (Artic1e 23) that specifies
that significant changes in the powers of the EU
will require the support of two-thirds majorities in
both houses of parliament (the Bundestag and
Bundesrat). This provision also applies to the
move to the third stage of Economic and Monetary Union, despite the automatic character of the
move as presented in the TEU.
Those parliaments, notably the British and
French, that are less enthusiastic about the EP's
agenda for resolving the democratic deficit propose different solutions. The French parliament
has pressed the idea of setting up a new institution
that would give national parliaments a direct say in
the legislative process of the EU, for example, by
being able to express a view on whether proposals
of the Commission are in conformity with the principle of subsidiarity. Within the British parliament
discussion has focused on obliging the Community

institutions to give a set amount of time to national

parliaments to express a view before a decision is
taken, with the possibility that if a significant percentage opposed a particular proposal it could only
be carried in the Council by unanimity. In both
cases one can observe an ongoing commitment to
national parliaments as the essential mechanism
for resolving the democratic deficit.
However, the debate about the democratic
deficit has now extended beyond the relationship
between the EP and national parliaments. It is no
longer just about the role of parliamentary institutions representing the people but has come to encompass a wider set of issues relating to popular
participation in decisionmaking. In this sense, the
debate about democracy in the EU has come to
mirror that taking place in the member states,
where parliaments are no longer universally seen
as the only or even the central answer to sustaining democratic life.
The reason why this has happened can be
traced to the dramatic events that have marked the
development of the EU in recent years. Extemally,
the collapse of communism in Central and Eastem
Europe ended the contrast in political forms that
had marked the two parts of Europe for forty years,
leaving much more room for questioning the democratic credentials of the Community. Intemally,
the inc1usion in the TEU of the provisions on European citizenship and the reluctance of prospective
European citizens in Denmark and France to support the treaty in referenda in 1992 and 1993
obliged all to reconsider the notion that European
integration enjoyed tacit public support and to review the necessity of and mechanisms for greater
popular participation in the operation of the EU.
One word that came to be central to this
broader debate was closeness (or proximity). It
has become an artic1e of faith that a way needs to
be found to bring the European institutions c10ser
to the individual citizen. Yet opinions differ as to
how this can best be done. Some are prepared to
contemplate the mechanisms of direct rather than
representative democracy and to favor the use of
referenda as a way of ascertaining the opinions of
the European electorate. But they are immediately
faced with the question of whether such referenda
should be Europe-wide or restricted to one country. Inevitably the answer to that question depends
on the answer that the framers of the referendum
wish to obtain. More conventional responses to
the issue of c10seness can be divided into those

Democratic Deficit

geared toward institutional change and those

stressing the need for direct benefits to European
citizens as a way of obtaining their support for European integration. In both cases, the search for a
democratic basis for the EU extends weIl beyond
the claims of parliaments to be fully involved in
the European process.
Three words have become the stock-in-trade
of those favoring institutional change: transparency, subsidiarity, and simplification. In October 1993 the Council, the Commission, and the EP
responded to the changing attitude toward openness by signing an agreement designed to make
the workings of the institutions more transparent
and thereby easier to understand for the average
citizen. Among other things, the agreement provided for the Council to open some of its debates
to the public and to publish the minutes of meetings and for the Commission to undertake broader
consultation in the form of green and white papers. This proved to be more than an anodyne
commitment, as the limits of the agreement were
soon tested. The Guardian newspaper took the
Council to court for failing to hand over the minutes of certain meetings. The European Court of
lustice ruled in the autumn of 1995 in favor of the
British paper and imposed on the Council the
obligation to justify decisions not to release material of this kind. The result is particularly difficult
for the Council to manage following the accession
in 1995 of Sweden and Finland, countries with
strong traditions of openness in public life.
The 1993 agreement also sought to give more
content to the concept of subsidiarity. Although
that principle was incorporated into the TEU, the
dispute as to the level at which powers should be
exercised did not end. For some, not least the
British Conservative government of that time,
subsidiarity was a mechanism for ensuring that
national governments are able to repatriate powers
and reduce the volume of EU legislation. In practice, the level of new legislation was reduced as
the single market became a reality, but those
members' concern about central power was not diminished. For others, the principle cannot apply
only to the relation between the Community and
national levels but should also spread to the regionallevel. It is this spirit that lay behind the creation of the Committee of the Regions. This body
provides a voice in Brussels for the regions of Europe and seeks to ensure that the other institutions
do not forget the concerns of individual citizens.

1 33

One effect of the institutional compromises

has been to bring about a system that is very difficult for an outsider to understand. There are, for example, more than twenty decisionmaking procedures that the EP has argued should be reduced to
three: consultation, co-decision, and assent. However, a stronger form of this argument is to suggest
that the treaties themselves need to be radically
overhauled to elirninate redundant articles and to
produce a single coherent text, laying out general
principles first and then moving on to the specifics
relating to particular areas of policy. This action
would serve to make the treaties look much more
like a constitutional document, and for that reason
alone it is not universally we1comed. At the same
time, such an overhaul would provide a mechanism
for enabling the citizens of Europe to see more
clearly the nature of the system of governance into
which they are being drawn ever more closely.
However, the debate about democracy in the
EU has extended beyond institutional requirements. A system can arguably be democratic,
however opaque and complex its procedures, however centralized its system of governance. Hence
it is now frequently argued that citizens are entitled to expect certain rights within a democratic
EU or that the EU should deliver certain public
goods to win the active participation of its citizens. The first argument is used to support the inclusion of a catalog of fundamental human rights
within a revised version of the treaty. This could,
for example, involve the accession of the EU to
the European Convention on Human Rights, leading to a major broadening of the rights of European citizens beyond the formal political rights at
present found in Article 8 of the treaty. The second
point is the one that lies at the heart of the claim
that the EU must address the central issue of unemployment and can only hope to win the support
of its peoples if it is seen to be effective in action
to bring more people back to work, particularly at
a time when the desire to meet the convergence
criteria for EMU is obliging all member states to
find ways to cut public deficits.
This last claim shows how the extension of
the argument about democracy beyond institutions
leads directly to the wider issue of legitimacy. A
distinction can be made between formal and social
legitimacy. The former requires that the existing
structure of power should have been formally approved by democratically elected parliaments; the
latter supposes broad societal acceptance of the

134

Denmark

system (Weiler, 1993). As Weiler pointed out, social legitimacy depends on the willingness of minorities to accept the decisions of the majority
within the particular geographical boundaries of a
polity. The EU is some considerable way from
winning the degree of legitimacy that has been enjoyed by national polities in this respect.
Is it possible that such societal legitimacy
can be enjoyed by the EU? There are those who
think not, inc1uding former British prime minister
Margaret Thatcher, who has argued that without a
Europe-wide public opinion based on a single
language, European democracy is not possible.
And yet such arguments are far from conc1usive,
as the example of Switzerland shows. At the same
time, a11 participants in the process of treaty
change continue to search for an adequate democratic base for the institutions and activities of the
EU, fueled by the continuing enthusiasm of the
new democracies of Central and Eastern Europe
to join, by the lack of any feasible alternative political project, and by the references to democracy
in the treaties themselves (for example, Artic1e
F[I]).
It may be too much to expect the EU to meet
the same level oflegitimacy as its member states; it
may not even be necessary for it to do so, provided
it delivers a reasonable level of benefits in terms of
efficiency. Nevertheless, an ongoing debate about
the democratic deficit is inevitable: the extension
of the powers of the European institutions has become inextricably linked with the argument over
the conditions under which those powers should be
exercised and the control that can and should be
exercised over the process. People disagree about
what those conditions and what that control should
be, but such disagreement can itselfbe seen as contributing to the development of a necessary democratic culture at European level.
See also DECISIONMAKING PROCEDURES; EuROPEAN PARLIAMENT; LEGITIMACY.

Bibliography
Commission. 1972. "Report of the Working Party Examining the Problem of the Enlargement of the Powers of the European Parliament (Vedel Report)." Bulletin 0/ the European Communities, Supplement
4n2.
Marks, G., F. W. Scharpf, P. C. Schmitter, and W.
Streeck. 1996. Govemance in the European Union.
London: Sage.
Newman, Michael. 1996. Democracy, Legitimacy and
the European Union. NewYork: St. Martin's Press.

Weiler, Joseph. 1993. "After Maastricht: Community

Legitimacy in Post-1992 Europe." In William James
Adams, ed., Singular Europe: Economy and Polity
0/ the European Community After 1992. Ann Arbor:
University of Michigan Press.

-Michael Shackleton

Denmark
A quick glance at the sma11 size of the Danish
population, territory, and economy; at Denmark's
geopolitical location between Germany and the
Nordic countries; and at Denmark's long-standing
and encompassing involvement in international
trade in goodsand services immediately reveals a
country highly dependent upon developments taking place abroad.
Indeed, Denmark was rarely capable of influencing international developments itself, although
its survival and welfare depended so highlyon
their course. As a result, Danish politicians early
in the twentieth century drew two lessons. First,
only through alliances with other states could international influence be obtained. Second, the
signing of reciprocally binding international commitments, subject if possible to some rule of law,
represented for that reason a major Danish interest
that even outweighed the interest of safeguarding
unfettered national sovereignty. Involvement in
relevant international decisionmaking forums became tantamount to an enhancement of the nation's ability to shape its own future.
Although this recognition was shared overwhelrningly by the Danish political c1asses, membership in the EC and EU has generated seemingly endless political problems. These problems
have arisen because, as a result of frequent referenda, ordinary people have become the real decisionmakers in Denmark. Most of these referenda
were the lega11y inescapable consequences of a
c1ause (Artic1e 20) inserted in 1953 into the country's constitution, the objective ofwhich was to facilitate Danish participation in new, postwar international arrangements. Accordingly, Artic1e 20
qualifies the transfer or pooling of Danish sovereignty in three major ways. The first condition is
reciprocity of obligations between the participating states. The second is that sovereignty can
only be transferred I namnere besternt ornfang (a
formula difficult to comprehend in Danish, let
alone in its English translation: "to a more speci-

Denmark

fied content"). The third condition is that a bill of

ratification of a draft EC/EU treaty, especially one
of accession, must be adopted by a qualified majority of five out of every six members of parliament. Altematively, a simple majority for ratification suffices if the draft bill is subsequently
confirmed by the verdict of the voters in a referendum. Such confirmation is granted if a simple majority of the participating voters approve the
treaty. However, a majority against ratification
overthrows the opinion of the parliamentary majority only if more than 30 percent of all voters
vote no.
On October 2, 1972, Denmark held its first
Euro-referendum (on whether or not to join the
EC). The referendum was called because, although the pro-membership political parties had
more than the requisite parliamentary majority for
ratification of the accession treaty, they preferred
to let the people speak directly on such an important issue. In the event, 63.5 percent voted in favor
and 36.53 percent against (the tumout was 89.9
percent). A majority of voters believed what the
country's then social democratic prime minister,
Jens Otto Krag, had repeatedly told them that EC
membership was essentially about: free trade
within a customs union and the benefits for Danish farmers of participation in the EC's bountiful
Common Agricultural Policy (CAP). Krag and
leaders of the other pro-Community political parties also insisted that membership was not about
transfers of sovereignty and certainly not about
political union.
Moreover, the pro-membership parties almost
sanctified the so-called veto principle when they
vested in a country's right to veto legislation the
ultimate instrument of national self-protection
against creeping integration instigated by others.
Whether the political class knew better is now immaterial. What matters is that a choice was made
that would haunt the political establishment: Denmark acceded to the Community with a commitment to something entirely different than what the
Community's founding fathers had envisioned (an
ever closer political union among the peoples of
Europe).
Initially, Community policymaking and agendas remained for most ordinary voters something
distant and incomprehensible and of only minor
practical importance for their day-to-day lives.
Predictably, therefore, voters' participation in the
1979 and 1984 direct elections to the European

135

Parliament (EP) was low: 48 percent and 52 percent respectively. These figures should be compared to participation rates in national and local
elections, which frequently surpassed 75 percent
during the same period. Indifference and opposition to the EC continued to grow: ten years after
the successful referendum in 1972, 44 percent of
Danes declared that they were against continued
membership, and only 34 percent expressed support for the EC.
In spite of this, the February 18, 1986, referendum, which preceded Denmark's ratification of
the Single European Act (SEA), was won with a
vote of 56.2 percent in favor and 43.8 percent
against. It was hardly cornforting for the pro-integration parties that this victory was achieved only
after the then (conservative) prime minister, Poul
Schlter, solemnly declared that prospects for European union were "stone-dead."
From the successful 1986 SEA referendum to
the unsuccessful June 1992 referendum on the
Treaty on European Union (TEU), the share of the
yes vote dropped so that the number of no votes
surpassed the number of yes votes by between one
and two percentage points (50.7 percent against
and 49.3 percent in favor). More than one in two
voters rejected ratification of the TEU despite the
fact that the Danish political establishment was
unanimously in favor of, and had publicly argued
for, ratification.
Poor planning by the "yes" campaign, together with a number of factors unrelated to European integration, contributed to the treaty's rejection. Yet all politicians agreed that only if four
specific EU-related items were singled out and exempted from the treaty could the Danish people be
asked to vote anew on ratification. These had to do
with special treatment of Denmark in relation to
EU citizenship, the third stage of the Economic
and Monetary Union (EMU), defense cooperation, and cooperation on matters pertaining to justice and horne affairs. The European Council, at
its meeting in Edinburgh in December 1992, acceded to Denmark's request for special treatment.
When, as a result, the fourth referendum on Denmark's EC/EU membership was held on May 18,
1993, the share of the yes vote grew to 56.7 percent.
Thus, after more than twenty years of membership that brought Denmark uncounted billions
of ecus in economic benefits, the nation's elites
and ordinary citizens were almost as divided on

136

Denmark

the question of European integration as they had

been in 1972. The former eonsidered EU membership fundamentally important for Denmark, regardless of whether the legal basis of deeisionmaking was in the first, seeond, or third pillar of
the TEU. However, many ordinary voters defined
Danish interests differently. For them, partieipation in the single market program (widely seen as
a good thing) represented the upper limit of Denmark's involvement in European integration.
Skeptieism about deeper integration is reinforeed
by a "Danes versus the others" divide, with "the
others" loosely defined as operating "down there"
in Brussels. The national media frequently insinuate that those down there pursue hidden anti-Danish objeetives, including antienvironmental, antieonsumer, and anti-publie health agendas. It does
not help that many pro-EU politieians frequently
indulge in anti-EU rhetorie in pursuit of narrow
and short-term politieal goals.
Opponents of deeper integration are mostly
represented either by politieal parties on the far
left and the far right or by several grassroots organizations that have seats in the EP but not in the
national parliament. The fact that mainstream
Danish politieal parties generally advoeated
deeper integration, and thus did not voiee the uneertainties, anguishes, fears, and animosities of
the ordinary voters, helps explain the birth and
growth of these grassroots organizations.
Be that as it may, it is a fact of Danish politieallife that far a long time EC activities remained
matters of foreign rather than domestie polieymaking; not surprisingly, the foreign ministry remained responsible for the coordination and conduct of Denmark's policies vis-a-vis Brussels. Yet
there are signs that the Danish political establishment seeks to domestieate EU politics, lest future
referenda result in a rejeetion of the EU.
It is no accident that social-democratic politicians have taken the lead in arguing in favor of this
process of policy internalization. The Social Democratic party suffered in particular from a bitter divide between pro- and anti-integrationists (mostly
on the party's left wing), a divide that dates back to
the first referendum of 1972. The split between
left- and right-Ieaning Social Democratic voters
persists and is detrimental to the party's performance in European elections: in the 1994 EP elections, the party's share ofthe total vote fell to an alltime low of 15.8 percent, in contrast to 34 percent

of the popular vote in the national parliamentary

elections that followed three months later.
If the internalization of EU politics has become one sign of the increasing maturity of the
Danish eleetorate, recent EU developments are
we1come in Denmark, not least by the beleaguered
Social Democrats. These changes include the decision to admit Central and Eastern European
countries into the EU in the foreseeable future
(Denmark strongly supports the accession of the
Baltic states) and a rebalancing of the respective
influences on EU policymaking of free trade interests and somewhat conflicting social interests
such as the fight against unemployment, social
dumping, and so on. Opinion polIs show that such
changes impinged positivelyon many Danes' perception ofthe EU beeause the new orientations arguably give the EU a more human face.
Finally, a push for a normalization of Denmark's relationship with the EU could come from
a wholly unexpected development: Denmark is
about to become a net contributor to the EU's budget, not least because of the consequences of accession to the EU of new member states from
Central and Eastern Europe. Surprisingly, opinion
polIs suggest that such a fundamental shift does
not detract from ordinary Danes' commitment to
enlargement, whieh is obviously perceived in political rather than economic terms.
Could it be that an unnatural "rieh uncle"
complex distorted ordinary Danes' understanding
of the EU? It is difficult to answer this question.
Yet, ungratefulness and even animosity toward the
benefactor often characterizes the receiver of important gifts for which he or she offers nothing in
return. In sum, if Denmark remains in the EU after
the next round of referenda to ratify the Amsterdam Treaty, the time may have come when this
small nation-state will cast all the political weight
it possesses on the side of a transformation of the
EU into a more politicalIy coherent, socially responsible, economieally effeetive, and diplomatieally significant body.
See also OPPOSITION MOVEMENTS; TABLE 6;
TABLE 10; APPENDIX 2; APPENDIX 3.

Bibliography

Patersen, Nikolaj. 1996. "In the Strategie Triangle: Denmark and the European Union." In Robert Bideleux
and Richard Taylor, European Integration and Disintegration: East and West. London: Routledge.

Differentiated Integration
Pedersen, Thomas. 1996. "Denmark and the European
Union." In Lee Miles, ed., The European Union arul
the Nordie Countries. London: Routledge.
Worre, Torben. "Denmark: Second Order Containment."
In van der Cees Eijk, et al., Choosing Europe? The
European Eleetorate arul National Polities in the Faee
ojUnion. AnnArbor: University ofMichigan Press.

-Hjalte Rasmussen and Nick Hrekkerup

Derogation
Aderogation is a temporary exemption for a
member state from EU legislation. Derogations
are often granted to new member states for periods
of five or ten years under the terms of their accession agreements.

Development Pollcy
The EU is the world's largest donor of humanitarian aid. In 1992, the Commission established the
European Community Humanitarian Office
(ECHO) to provide emergency humanitarian and
food aid to the former Yugoslav republics; the
African, Caribbean, and Pacific countries (as part
of the Lome conventions); and countries in Latin
America, the Mediterranean, the Near and Middle
East, Central and Eastern Europe, the Commonwealth of Independent States, and the Far East.
ECHO operates through a wide range of partners,
inc1uding nongovernmental organizations, international relief organizations, and UN agencies. In
an effort to improve coordination between EU and
member-state aid programs, in 1992 the Commission produced the Horizon 2000 report, which
proposed strategies for cooperation and collaboration until the year 2000.
See also LOME CONVENTION.

Dlfferentlated Integration
Differentiated integration emerged as one of the
key issues in the run-up to the 1996-1997 intergovernmental conference (IGC). Its origins go
back much farther, indeed to the origins of the EC
itself. The debate on differentiation has, however,
been much c10uded by the huge number of terms
to describe forms of European integration other
than the ideal type in which all participating countries in principle operate the same rules and policies in virtually identical ways.

137

Differentiation is the most straightforward

and most neutral term used to denote variations in
the application of European policies or variations
in the level and intensity of participation in European policy regimes. As we shall see, many other
terms have been coined, most of which seek to
prescribe or proscribe a particular preference
about integration or to convey a particular
metaphor for the process of integration.
Why does the issue arise at all and why so
acutely in aperiod of debate over reform of the
EU? There are at least five main reasons. First, it
is a commonsense observation that there are and
always have been objective differences among the
EU member states and indeed between regions or
groups within the member states. This was true
even in the origijIal and intimate membership of
only six countries. From the outset, therefore, the
treaties admitted that objectively defensible differences should under certain circumstances be reflected in differentiation in the rules that were to
be applied. Hence special protocols were attached
to the treaties, special c1auses were added to some
legislative acts, or under the formula for directives
variation of implementation was accepted, usually
time delays. Here lies the origin of the term differentiation and the explanation for its periodic
recognition by the European Court of Iustice
(Ehlermann, 1982). This need not be a great problem, and much the same happens within national
political systems. But problems start when governments begin to plead the case for differentiation on the basis of subjective preference rather
than objective circumstance or when a differential
application of policy by one member state causes
negative externalities for others.
Second, also from the outset, the EC was
only one of many European frameworks for policy
cooperation. It coexisted with a variety of other
forums, some formal and some informal, that had
quite different memberships: the Benelux, comprising three founder EC countries; or Western
European Union (WEU), containing the EC six
but also Britain; and many informal or functional
groupings, for example in science and technology.
It is from this experience that the term variable
geometry was derived in the late 1970s. Again for
a long time this was not much of a problem except
insofar as there might be an occasional contradiction of policy between groupings that touched the
same policy areas. The reality, however, is that

1 38

Differentiated Integration

this latter situation has become more and more

common as the policy scope of the EU has expanded and as the membership of the club has
been enlarged. This has induced some supporters
of a strong EU to argue more vociferously the case
for the EU to be the primary and predominant forum for policy cooperation: for example, by absorbing other European forums, such as the WEU.
But it has also led some subgroups to insist on retaining a distinct identity for certain purposes,
whether, for example, on a "regional" basis as in
the Nordic Council or by the creation of new restricted groupings such as that of the Schengen
agreement.
Third, divergence is a specific form of difference, generally linked in EU terminology to levels
of economic performance or pat\erns of socioeconomic variation. The policy issue within the EC,
and later the EU, has been the extent to which
such divergence might hamper integration or be
accentuated by integration policies and, if either
of these things happens, the extent to which it then
falls to the EU to "do something" about it. Thus
within the context of the common, later single,
market the question for policymakers was whether
and how to compensate the divergent regions or
countries, in particular through budgetary transfers. Since the mid-1980s this has underpinned the
case for cohesion policies and spending.
A parallel debate arose and remains potent as
regards Economic and Monetary Union (EMU),
the whole philosophy of which has been based
upon the notion that all member countries should
strive to attain convergence of performance and of
policy. This has always been juxtaposed with the
assumption that not all member states would actually converge, either because of their economic
character or because of their public policy. Hence
the Exchange Rate Mechanism (ERM) of the European Monetary System (EMS) was launched
with the full participation of only the stronger
economies (with the exception ofBritain), and the
Treaty on European Union (TEU) explicitly specifies the conditions for an EMU with fewer members than the EU. Both features of this economic
discussion have become more pointed over the
years (Pisani-Ferry, 1995). A light discussion
about a "two-speed" Europe, started in the early
1970s, became a sharp argument with the TEU's
plans for EMU and with the calls for eastern enlargement to absorb transition countries with as
yet much poorer and less-developed economies.

Fourth, the founding rules of the EC gave

each member state a form of parity within the decisionmaking process and indeed sought to circumscribe the historic weight of Germany as a European power. Nonetheless, issues of power and
relative influence have always hovered elose to the
surface of the political discussion. The core political issue has been how to recognize differences of
power in the way that the ECIEU established its
agenda and reached its decisions, that is, beyond
the formula for weighted voting in the Council of
Ministers. Thus the Franco-German special relationship might also be a "motor" of integration for
the wider group or, less benevolently, the "axis" of
integration. For many years there was a recognition of informal leverage from Paris and Bonn in
concert but elear resistance to any notion that this
might be formalized as a goveming directorate. As
the size of the ECIEU has increased, so this issue
has periodically reemerged, with suggestions of a
"multi-tier" construction, some member states in
the first league and others left to follow, or of a pattern of "concentric cireles" around the more integration-minded govemments. This discussion has
taken on a completely different character as eastern enlargement has raised the possibility of a
membership of, say, twenty-seven EU member
states. Fears of either dilution of integration
(wider, but weaker) or a breakdown of the institutions under the weight of numbers have made
much more persuasive the case for an inner
group-noyau dur or Kern Europas (Deubner,
1995)----of explicitly more important countries in
the driving seat. It is only thus, it is argued, that
widening might be made acceptable by deepening,
even though this would mean that there would then
be second- or third-elass members of the EU.
Fifth, there is the issue of integration itselfboth how pervasive its policy scope should be and
how invasive the political authority of the EU
should be vis-a-vis the member states. The TEU
extended both scope and authority to an extent
that found some govemments unwilling to accept
all of the consequences and that provoked vocal
public dissent, acutely in some member states.
Thus the TEU itself includes a number of "optout" or "opt-in" elauses as well as a proliferation
of special protocols and deelarations. It also embeds the principle of subsidiarity as an apparent
counterweight to the centralization of power in the
EU institutions. At one level these devices allow at
least some countries, notably Britain and Den-

Differentiated Integration

mark, the opportunity to practice singularity. At

another level they imply a breakdown of the notion of one set of policies that apply to all member
states. Of course views differ on whether or not
this is a healthy development. Under increasingly
intense pressure from domestic critics of the EU,
in the mid-1990s the British government preached
the benefits of "flexibility" as an operating principIe for the EU. Its critics counterposed the objection that this would be tantarnount to the creation
of an la carte Europe, bereft of collective disciplines and of solidarity.
Thus it becomes dear that the issue of differentiation has come to revolve in particular around
the question of EMU, the prospect of yet further
enlargement, and the conflict between integrationists and intergovernmentalists in the EU. The
1996-1997 IGC could not therefore escape a debate on this among the various proposals for treaty
reforms, hence its indusion in the Report of the
Reflection Group (1995) chaired by Carlos Westendorp, who retained the term jlexibility in order
to keep the British within the discussion (indeed,
the draft Amsterdam Treaty contained a section on
flexibility or doser cooperation). The difficulty
lies in how to operationalize differentiation or
flexibility, given the range of reasons for its presence in the debate and the mixture of motives for
developing the concept (Ehlermann, 1995; Stubb,
1996; Wallace and Wallace, 1995). Thus we need
to darify a little further what might underpin a
more explicit definition of differentiation.
A first yards tick is what the starting basis,
which can be neither differentiated nor flexible,
should be. In other words, is there a minimum set
of core policies to which all EU members have to
subscribe and on which there should be no room
for maneuver? If so, is this the same as the inherited acquis communautaire or a significant revision, perhaps reduction, of the acquis? EU formal
documents tend to insist on the inherited acquis,
even though the sustainability of this position is
not evident. In particular two points should be
noted. One is whether there can be scope for variation around the core policy of the single market,
for example to permit local "differences of taste"
(e.g., the Danes prefer to have beer sold only in
bottles and not in cans) or to allow differences in
how products are processed (e.g., differentiated
social and environmental processes), as long as
the product in question conforms to minimum essential requirements in order to circulate free1y.

1 39

Another is whether EMU should be seen as part of

the core policy set, even though it may lie beyond
the reach of some existing and potential members.
A second approach to the subject is to argue
that it is really about the so-called hard-core countries. This view asserts that some member states are
actually more important, more committed, and more
integration minded than others. They should therefore carry more weight and should be allowed to
proceed more quickly than others or to pioneer particular arenas of cooperation. The hard core tends to
come down to France, Germany, and the Benelux
countries (five of the six founder members), with
EMU once seen as the like1y manifestation of this
cohort. We should, however, note that although this
implies a projection by them of greater political
power, if a common defense is set as a priority goal,
it would be logical to look to British participation as
a necessary and not just desirable component. Here
lies a serious inconvenience in the argument, given
the record of British European policy but also the
weight of British military capability.
A third issue is whether or not a vanguard
group, whether composed of a cohort of really
comrnitted countries or defined by the extent of
policy ambition, would or should be able to go so
far out in front that in practice others would be left
irretrievably behind. The temptation of practitioners has been to argue diplomatically that the slower
or the more reluctant should always find the door
open to their participation; in other words, that a
vanguard need not be exdusive. It is this view that
lies behind the suggestion that any such groupings
of less than the whole EU membership should be
bounded by the treaties and open to late joiners.
Yet as the EMU mIes already reveal, there is scope
to block late joiners, precisely on the grounds that
they are too different or divergent.
Thus we can see that differentiation encompasses the range from a form of sensible policy
management of local differences to the systemic
issue of power and relative leverage within the
EU. For some member states the policy and political choices have long been made, notably in the
five countries that recur as candidates to constitute
the core. But for other member states the choices
are much more troublesome.
Bibliography
Deubner, Christian. 1995. Deutsche Europapolitik: Von
Maastricht nach Kemeuropa? Baden-Baden:
Nomos Verlaggsgesellschaft.

140

Direct Effect

Ehlennann, Claus-Dieter. 1982. "How Flexible Is Community Law? An Unusual Approach to the Concept
of 'Two Speeds.'" Michigan Law Review 82, pp.
1274-1293.
- - . 1995. lncreased Differentiation or Stronger
Uniformity. Florence: European University Institute
Working Paper RSC No. 95/21.
Pisani-Ferry, Jean. 1995. "L'Europe a geometrie variable: une analyse econornique." Politique Etrangere,
no. 2/95, pp. 447--465.
Stubb, Alexander. 1996. "A Categorization of Differentiated Integration." Journal of Common Market Studies 34, no. 2 (lune), pp. 283-295.
Wallace, Helen, and William Wallace. 1995. Flying Together in a Larger and More Diverse European
Union. The Hague: Dutch Scientific Council for
Government Policy.

on the part of some member states (notably

Britain and France) to give the EP additional
power or prestige accounted for the delay in allowing, and then organizing, direct elections. AIthough voter turnout has steadily dec1ined since
1979, the decision to hold direct elections nevertheless marked the beginning of a process
whereby national governments have enhanced
the EP's authority as part of an effort to improve
the EU's legitimacy and elose the democratic
deficit.
See also DEMOCRATIC DEFICIT; EUROPEAN

-Helen Wallace

A directive is an EU legislative instrument addressed to member states. It is binding with regard

to the result to be achieved but allows member
states to choose the means to achieve that result.

Dlred Effed
The doctrine of direct effect is a legal principle that
underpins EC law. By declaring that the Treaty of
Rome established individual rights that national
courts had to protect, the European Court of Justice
(ECJ) promulgated the doctrine of direct effect in
its landmark Van Gend en Loos decision (1963).
Together with a later decision establishing the doctrine of supremacy of EC law, this decision transformed the EC's preliminary ruling system
(whereby national courts may ask the ECJ for a ruling on a point ofEC law) into a mechanism to challenge the compatibility of national law with EC
law. The doctrines of direct effect and supremacy of
EC law therefore created a means for individuals to
puB the ECJ into national policy debates and an
obligation for national courts to set aside laws and
policies that violate European law.
See also EUROPEAN COURT OF JUSTICE.

Dlred Eledlons to the

European Parllament
The European Parliament (EP) is direct1y elected
every five years. Voting systems and constituency
sizes vary from country to country, and balloting
is spread out over a week in some member states,
but elections to the EP constitute a unique, EUwide exercise in democracy. Although the Treaty
of Rome called for direct elections, it was 1974
before member states reached a political agreement to hold them, and another five years before
the first direct election took place. A reluctance

PARLIAMENT.

Dlredlve

Dlredorate-General
A directorate-general is an organizational unit
(equivalent to a civil service department) in the
Comrnission, Council of Ministers secretariat, or
European Parliament secretariat.
See TABLE 4; ApPENDIX 4; ApPENDIX 6; ApPENDIX 9.

Dooge Commlttee
The European Council in Fontainebleau in June
1984 decided, almost as an afterthought, to establish an Ad-hoc Comrnittee on Institutional Affairs
to consider the EC's response to recent internal and
external developments. When Ireland took over the
Council presidency in July 1984, Prime Minister
Garret FitzGerald nominated his friend and former
foreign minister, Jirn Dooge, to chair the comrnittee, to which the other Community leaders appointed their personal representatives. The socalled Dooge Comrnittee drew on the recent
Genscher-Colombo proposals and the European
Parliament's Draft Treaty on European Union in an
effort to "translate a wide range of existing views
on the nature of European integration into politically acceptable reform." The comrnittee's report,
dealing with a variety of institutional issues and a
piethora of policy options from technology, to political cooperation, to the internal market, gener-

Dublin Convention

ated an intense discussion on the future of European integration at the Milan summit in June 1985.
As a result, and based on a majority vote of the
heads of state and government, the European
Council decided to convene an intergovernmental
conference (IGC) to negotiate treaty amendments,
which resulted in 1986 in the Single European Act.
See also INrERGOVERNMENTAL CONFERENCE.

Double-Prlce System
The double-price system is a proposed method of
introducing the new single currency (the euro) by
showing prices in both the national currency and
the euro in order to build consumer confidence
and demonstrate that there are no hidden price increases in the switch over.

Draft European Act

See

GENSCHER-COLOMBO PRoPOSALs.

Draft Treaty Establlshlng the

European Union
In February 1984 the European Parliament (EP)
overwhelmingly passed the Draft Treaty Establishing the European Union. The treaty originated
in the work of the Crocodile Club (called after a
famous restaurant in Strasbourg, where it first
met), a small group of members of the EP from
different political parties who shared a comrnitment to reviving the EC. Altiero Spinelli, the veteran Italian Eurofederalist, led the group, which in
1982 formed the nucleus of the EP's influential
Institutional Affairs Comrnittee. Spinell i and his
colleagues believed that, in the first direct elections held in June 1979, the European electorate
had given the parliament a mandate to revise the
EC's treaties and resuscitate European integration.
A consensus emerged in the Institutional Affairs
Committee that a new treaty was needed to replace the existing treaties and a new union was
needed to replace the existing Communities. The
union would incorporate the EC's institutional
structure and competences but inelude numerous
reforms and additional authority. In deference to
member states' sensitivities to the centralization of
power in Brussels, the Draft Treaty explicitly
mentioned the principle of subsidiarity (the idea
that the union would be responsible only for tasks

141

that could be undertaken more effectively in common than by the member states acting separately).
Passage of the Draft Treaty gave aboost to
the momentum then gathering in the EC for institutional reform. It coincided with developments
such as the Genscher-Colombo proposals and the
Stuttgart Deelaration to jolt the Community out of
its political malaise in the early 1980s. Coming
only four months be fore the decisive European
Council in Fontainebleau, which finally resolved
the debilitating British budget dispute, the Draft
Treaty contributed to the climate of change in
which the Dooge Committee met and the 1985 intergovernmental conference took place. Accordingly, the Draft Treaty contributed in its way to the
decisive Single European Act.

Dual Mandate
The dual mandate refers to politicians who are
members of both the European Parliament (EP)
and anational parliament. Before direct elections
to the EP, when members of the EP (MEPs) were
appointed by national political parties from the
ranks of national parliamentarians, by default
every MEP held a dual mandate. Since the advent
of direct elections, however, the dual mandate has
become almost extinct, as national political parties
and EP political groups strongly discourage-and
in many cases prohibit-their members from
standing for both national and EP elections. The
advantage of the dual mandate is that it helps keep
the EP and national parliaments in elose contact
with each other; the disadvantage is that holders of
the dual mandate cannot do both jobs adequately
and underrnine public credibility in both institutions (but especially in the EP).

Dublln Conventlon
Signed by EC member states in June 1990, the
Dublin convention deterrnining the state responsible for exarnining applications of asylum lodged
in one of the member states is one of two agreements intended to develop an EU immigration
policy (the other is the External Frontiers convention). Specifically, the Dublin convention aims to
prevent multiple applications by EU asylum seekers. To that end, member states are in the process
of establishing a computerized fingerprint recognition system (EURODAC) for asylum seekers.

, 42

Dunkirk Treaty

Tbe convention took an inordinately long time to

ratify, not least in the country where it was signed
(Ireland). Finally, the European Council, meeting
in Amsterdam on June 16 and 17, 1997, welcomed
the completion of the ratification procedures that
allowed the convention to enter into force by September 1, 1997.
See also IMMIGRATION POLICY; JUSTICE AND
HOME AFFAIRS.

Dunklrk Treaty
Tbe Dunkirk treaty, a defense agreement signed
by Britain and France in 1947, was the basis for
the March 1948 Brussels treaty, a mutual defense
agreement between Britain, France, Belgium, the
Netherlands, and Luxembourg. The Brussels
treaty, in turn, was aprecursor of the North Atlantic treaty (1949) and the Western European
Union (1954).

ECIS

See

EUROPEAN CENTER FOR INFRASTRUCTURE

STUDIES.

ECJ

See EUROPEAN COURT OF JUSTICE.

ECOFIN
See

COUNCIL OF ECONOMIC AND FINANCE MINIS-

TERS.

EAD
See EURO-MAB DIALOGUE.

EAGGF
See

EUROPEAN AGRICULTURAL GUIDANCE AND

GUARANTEE FUND.

EBRD
See

EUROPEAN BANK FOR RECONSTRUCTION AND

DEVELOPMENT.

EBS
See EUROPE BY SATELLITE.

EC
See

EUROPEAN COMMUNITY.

ECB
See EUROPEAN CENTRAL BANK.

ECE
See

EcONOMIC COMMISSION FOR EUROPE.

ECHO
See

EUROPEAN COMMUNITY HUMANITARIAN OF-

FICE.

ECIR
See EUROPEAN CENTER FOR INDUSTRIAL RELATIONS.

Economic and Financial

Committee
Effective January 1, 1999, with the launch of the
third stage of Economic and Monetary Union
(EMU), the EU's monetary committee will be renamed the Economic and Financial Committee.
Consisting of senior officials from member state
finance ministries, but with the addition to it of
representatives of the European Central Bank, the
committee will continue to coordinate meetings of
the finance ministers' council (ECOFIN) and help
to work out the implementation of EMU. AIthough its role is advisory only, the Economic and
Financial Committee will be an unusually influential body, just as the monetary committee now is,
because it reports directly to ECOFIN and deals
with the politically sensitive issue of EMU.

Economlc and Monetary Union

(EMU): Polltlcallssues
The agreement on Economic and Monetary Union
(EMU) contained in the Treaty on European
Union (TEU) represents one of the biggest leaps
forward yet undertaken by the European integration process. The EMU initiative raises a varied
set of important political questions, relevant to
both public debate and academic analysis. These
concern the nature of policy development and negotiation in the European integration process; the
power relationships displayed in the policy sector
(in particular the exercise of, and response to, German leadership ); the relationship between the
EU's policy agenda and the structural constraints
of the wider international political economy; the
role of agency (the particular configuration of
leaders, with their own preferences and beliefs,
and their importance in seeuring this particular

143

144

Economic and Monetary Union (EMU): Politicallssues

agreement); the reciprocal effects between the domestic and the European policy levels including,
most notably, the national consequences of EMU
decisionmaking; and, finally, the extent to which
the EMU project has been legitimated and the
prospects for its realization. This range of issues
reflects the far-reaching nature of the EMU project, one that has relevance to the European integration process as a whole.
EMU originated in the Werner Report of
1970 and the development ofthe European Monetary System (EMS), established in 1979. Following the initial success of the EMS and in the aftermath of the Single European Act (SEA), a number
of papers on monetary policy were circulated in
the first months of 1988. French finance minister
Edouard Balladur and his Italian counterpart, Giuliano Amato, presented papers criticizing the constraints and asymmetries of the current EMS; they
were followed by Germany's Hans-Dietrich Genscher-a joreign minister acting beyond the normal diplomatic domain-and later by Gerhard
Stoltenberg (German finance minister), using the
platform provided by Germany's EC presidency at
the time. The German lead was crucial, given the
strength of the mark, and it helped to give prelirninary shape to the terms under which EMU might
be relaunched. Following Genscher's initiative,
Commission president Jacques Delors and German chancellor Helmut Kohl worked closely together to prepare an agreement on EMU at the European Council meeting in Hanover in June 1988,
and French president Fran~ois Mitterrand rallied
to the idea. Accordingly, the European Council
created an ad hoc committee under Delors's chairmanship (the Delors Committee) to study how
EMU might be achieved. The committee's composition raises intriguing questions: it contained all
the central bank governors of the EC member
states (an astute tactic to identify the governors
with the EMU momentum) and was chaired by the
most assertive Commission president for decades.
The committee's report, signed by all the central
bank governors and published in April 1989, set
out a three-stage blueprint for EMU. The reportthe bulk of which found its way into the eventual
TEU-placed EMU fmnly on the top of the EC's
agenda.
Progress was neither simple nor straightforward, however. The British govemment, engulfed
by an internal ministerial crisis over sterling's entry into the EMS, expressed strong opposition to

EMU. Yet, in the momentum established by the

Delors Report, the British were left running behind the rest: British reservations could not stop
progress toward EMU. Two separate counterproposals from London, for a parallel currency (the
hard ecu) and for a common currency, were not
taken up. At Madrid in June 1989, the European
Council envisaged an intergovernmental conference (lGC) on EMU. In the meantime, a European
Parliament report (the Guigou Report) sustained
the momentum toward EMU by raising some of
the questions that would have to be answered at
the IGC. At the same time, wider developmentsthe collapse of communism in Central and Eastern
Europe and the ensuing process of German unification---demanded attention. These developments
probably delayed progress on EMU, as the Germans wrestled with their own new monetary union
(which came into effect on July 1, 1990). German
unification certainly provoked a new concern
among Germany's neighbors (notably the French)
to bind Germany to the EC and to the West. In any
event, the European Council, meeting in Strasbourg in December 1989, confirmed the launch
one year later of an IGC on EMU. By its next regular meeting (in Dublin in June 1990), the European Council had agreed that a second IGC on political union should be called: this was a direct
response to the new situation in Central and EasternEurope.
Negotiations on the detailed content of EMU
could now commence. Italy, in the Council presidency during the second half of 1990, acted to
prepare both IGCs (a European Council meeting
in Rome in October agreed to the EMU mandate)
and settled disputes as to their organizational
structure. Both IGCs opened in Rome in December 1990 but began in eamest under the successive
Luxembourg and Dutch presidencies of 1991. The
IGC on EMU met at different levels: on eleven occasions as aministerial IGC but twice as regularly
at the level of "personal representatives" (the finance ministers' nominees), in addition to separate meetings of a working group of junior officials. There were three "informal" meetings of the
Council of Economic and Finance Ministers
(ECOFIN) to discuss progress on EMU: May
10-12 in Luxembourg, September 20-22 in Apeldoorn, and November 30 and December I in
Scheveningen. The Committee of Central Bank
Governors made various technical submissions;
indeed, its papers on the putative European Cen-

Economic and Monetary Union (EMU): Politicallssues

tral Bank (ECB), European System of Central

Banks (ESCB), and European Monetary Institute
(EMI) determined much of the treaty's final content. Other important submissions to the IGC included draft treaties presented by the Commission
(December 1990), the French govemment (January 1991), and the German govemment (February
1991); an earlier Spanish paper on EMU generally
(September 1990); a British proposal for a "hard
ECU" as a possible common currency (January
1991); the Luxembourg presidency' s draft treaty
or "nonpaper" (June 1991); and, finally, several
partial draft treaties by the Dutch presidency (August and September 1991) together with its full
draft treaty of October 1991 and a later working
document of early November. The negotiations
were concluded at the historic European Council
in Maastricht on December 9 and 10, 1991 , although the final version of the treaty was not
signed until the following February, to allow for
some "polishing up" of the text.
The euphoria of Maastricht was soon undermined by the problems of ratifying the treaty itself
and by the crises of currency speculation that
greatly weakened the EMS in September 1992
and July-August 1993. Since August 2, 1993, the
fluctuation band for currencies in the exchange
rate mechanism of the EMS has been set at 15
percent of the central rate (up from just 2.25 percent). Despite these pressures, Stage 2 of EMU
began as scheduled on January 1, 1994. Yet the
complex formula providing for adecision before
the end of 1996 on the transition to the third and
final stage of EMU was put aside: the required degree of economic convergence between the member states had not been attained. Instead, the expectation was that adecision would be taken in
early 1998 on the eligibility of each member state
for entry into Stage 3, which would begin on January 1, 1999 (as foreseen in the TEU). In view of its
right to opt-out, the British had to notify their partners before the end of 1997 whether or not they
intended to participate in Stage 3 (presuming that
they met the economic preconditions).
But the viability of this path is subject to a
variety of political as weIl as economic press ures.
In particular, national elections are proving a major political constraint. National parliamentary
elections due in France in the spring of 1998 were
brought forward to May 1997, with disastrous
consequences for President Jacques Chirac and
near-disastrous consequences for EMU. Instead of

145

sustaining the conservatives' majority in parliament, the elections retumed a left-wing majority
highly critical of the deflationary drive toward
EMU. The new French govemment's questioning
of the post-EMU stability pact almost derailed the
June 1997 Amsterdam summit. Federal elections
are due in Germany in the fall of 1998, by which
time the decision to proceed with the abolition of
the mark could prove highly controversial; already
Chancellor Kohl is looking more vulnerable than
at any time during his long period in office. The
stress placed by Theo Waigel, Germany's finance
minister, on the need for proper compliance with
the TEU's provisions for economic convergence
before Stage 3 can begin indicates his reelection
concems in conservative Bavaria in the fall of
1998. Moreover, although Article 109j of the TEU
specifies that the European Council will make the
key decisions on proceeding to Stage 3, any public
statements from the German central bank (Bundesbank) on the suitability of particular member
states to join the single currency could prove crucial, not least in terms of the acceptance of the
process by the financial markets.
Explaining Economic and Monetary Union

The path taken toward EMU and the policy

process that produced the agreement can be analyzed from a number of perspectives. A distinction
can be drawn between the endogenous and the exogenous factors that have affected EMU. As the
above summary emphasizes, diverse actors and relationships are relevant to an explanation of how
the EMU agenda was set. Individual politicians
(notably Genscher, followed by Kohl and Delors)
showed pollcy leadership, the inclusion of central
bank govemors in the Delors Committee "incorporated" them into EMU's developing momentum
and increased EMU's legitimacy, and the FrancoGerman axis proved crucial in smoothing the path
toward (and during) the negotiation stage. The
will of prominent European leaders (notably Kohl
and Mitterrand) to press ahead indicates how essential the role of "agency" was.
Leaders and their representatives have to operate within two domains-the European and the
domestic-that have their own distinct demands
and constraints (a "two-level" bargaining game).
Those involved in preparations for EMU were
acutely aware of the conflicting press ures upon
them from both levels. The normal fare of bargaining-such as the construction of package

146

Economic and Monetary Union (EMU): Politicallssues

deals, side payments, and threats of rejection,

which are all relevant to the IGC-takes on an unusual character in such a situation. The two-level
game also involved a set of varied, but overlapping, networks of actors, concentrated in the insular world of monetary policymaking.
In addition, the nature of the European institutions and their rules affected the outcome of the
EMU agreement. "New institutionalist" explanations would highlight the constraints accepted under the technical rules of the EMS, allied to the informal conventions and codes of behavior of the
European Council, ECOFIN, the Committee of
Central Bank Governors, and a unique forum like
an IGC. These institutional factors influenced the
scope of the EMU agenda: past mIes represent
heavy "sunk costs" and encourage a process of incremental change. With the EMS and its associated experiences, the EC was subject to a "path
dependency." The negotiators were also engaged
in a collective process of policy learning: searching for viable solutions to problems commonly
identified in the technical design of EMU.
The effect of the EMU negotiations on the
various domestic political systems, and vice versa,
is the source of a wider controversy among analysts. In part, it is a question of identifying the key
actors involved in the EMU agreement and distinguishing their prime motivations. Realists would
highlight national governments (albeit seen as pluralistic entities, preoccupied with domestic interests and poliey problems) as the key aetors.
Hence, EMU might be seen as being driven by the
desire to "rescue" individual nation-states from
threats to their autonomy posed by the globalization of financial markets. In essence, domestic political interests in shoring up the capability of
states to deliver sound monetary policies converged to make an EMU agreement possible.
Alternatively, these same states might be seen
as being bound up in a process of transformation,
prompted by the dynamics of the integration
process itself and changes in the world economy.
Transformation can be portrayed as aredefinition
of the terms of national debate, a shifting of the
domestic agenda, and a restructuring of the balance of political forces within states. In short, national actors became prisoners of the processes
that they created (e.g., the single market program,
the operation of the EMS) and prisoners of
processes that others created for them (e.g., globalization, the deregulation of financial markets).

Thus, the degree of control possessed by any particular set of national or EC actors is seen as being
limited by these developments.
Whichever interpretation seems more plausible, it is certainly the case that national actors had
different motivations and strategies: Germany
sought to make its power more acceptable to its
neighbors by placing itself under a European umbreIla, France sought to redress the asymmetries
of the EMS and tie Germany to a European framework, and Italy shared many of the French concerns but also saw advantages for itself in accepting an external monetary discipline (a vincolo
estemo) to overcome domestic resistance to such
a course. Each accepted that its hands might be
tied. An exception was the UK, which expressed
its traditional desire to maintain national choice
and flexibility.
The EMU process cannot be understood by
reference to internal factors alone, as the EMU negotiators were responding to a variety of exogenous pressures as weIl. The structural changes of
globalized financial markets have already been alluded to. Moreover, the EMS was itself a search
for monetary stability in a world still wrestling
from the eollapse of the Bretton Woods system.
The will to proceed with EMU, even after the
EMS crises of 1992 and 1993, is indicative of the
response to these external pressures. Moreover, attitudes toward EMU were affected by wider political developments in Europe. After 1989, the collapse of eommunism in Central and Eastern
Europe increased concerns over German power
and future foreign policy orientation. German unification may have delayed the EMU negotiating
process-given the need of West Germany to attend to the problems of a monetary union with the
East-but it also renewed old concerns.
As the EU approaches the EMU goal, questions about the nature of the system of governance
that produced it and is charged with sustaining it
are likely to come to the fore. The EU is a sui
generis system and not altogether a coherent one.
After Maastricht, there was much jockeying for
position (turf fighting) between the EU institutions
over the details of EMU coordination and management. With EMU, popular criticism of the lack of
democratic accountability may rise in some member states. Moreover, with the transition to EMU,
governments may find comfort in shifting the
blame for unpopular actions (such as cuts in welfare programs ) to the EU level. Hitherto the c1os-

Economic and Monetary Union (EMU): Toward a Single Currency

eted and opaque nature of monetary policy has hidden the specific distributive effects of EMU. In an
era of budget retrenchment, welfare reform, and labor market deregulation, this veil is likely to be
lifted. Disputes are likely to be intensified with a
"multi-speed" transition to EMU: domestic reaction to national exdusion in founder member states
such as Belgium and Italy could be very hostile,
should it occur. The framework for managing a
two-speed shift to EMU is still to be completed,
and this may itself exacerbate relations within the
EU. In short, the legitirnacy of the entire EMU exercise is probably yet to face its stiffest test. The
commitments of the TEU may be weaker than
originally envisaged. Accordingly, it is still difficult to predict whether EMU will be achieved.
See also ECONOMIC AND MONETARY UNION:
TOWARD A SINGLE CURRENCY; EUROPEAN MONETARY SYSTEM.

Bibliography

Baun, Michael. 1996. An Imperject Union: The Maastricht Treaty and the New Politics 0/ European Integration. Boulder: Westview.
Kenen, Peter B. 1995. Economic and Monetary Union
in Europe: Moving Beyond Maastricht. Cambridge:
Cambridge University Press.
Padoa-Schioppa, Tomasso. 1994. The Road to Monetary
Union in Europe: The Emperor, the Kings, and the
Genies. Oxford: Clarendon.

-Kevin Featherstone

Economlc and Monetary

Union (EMU): Toward a
Single Currency
The planned completion of Economic and Monetary Union (EMU) is a grand-scale experiment in
the deepening of European integration that would
create a currency area for a population of nearly
400 million people, who generate the world's
highest GDP and constitute its largest trading
power. In the greater scheme of things, EMU is
yet another in a long series of attempts to devise
an efficient international monetary regime. The
search for such a system has a history of endeavors that have swung like a pendulum between free
floating and fixed (pegged) exchange rates but
have mostly settled somewhere in between.
EMU is anchored in the Treaty on European
Union (TEU), which took effect in November
1993 after ratification by the then twelve member

147

states of the EC. New members have to accept

EMU as part of the EU's acquis communautaire
(body of existing law). EMU is the culmination in
the monetary sector of what had started in the real
sec tor with the creation in 1968 of a customs
union and was intensified by the single market
program in the 1980s. The TEU set the EMU
dock ticking. With the system put on automatic
pilot, EMU is presumed to start January 1, 1999,
and the single currency, the euro, is set to become
the participants' sole legal tender by July 1, 2002.
National moneys have long symbolized political and monetary policy independence. Thus, the
geographic domain where money enjoys legal tender status (acceptability in settlement of private
and public debt) has, with few exceptions, coincided with the boundaries of nation-states. For
some countries (those engaged in anti-inflation
policies) the national currency has become synonymous with sometimes hard-won domestic and
international purchasing-power stability. For other
countries, inflationary money creation has served
two objectives: lowering unemployment (in the
misguided belief that an inflation-unemployment
trade-off existed in the long run) and capturing
seigniorage benefits--especially important for
countries with a weak tax-collection system.
What is unique with EMU is the determination of a group of independent countries deliberately to relinquish de jure monetary autonomy by
creating an EU central bank, the European Central
Bank (ECB), which is to be independent of national and supranational governments in order reliably to pursue price stability. It is for the ECB to
determine noninflationary money supply and
monetary growth and to conduct monetary policy
for the euro zone. Member states' central banks,
forming with the ECB the European System of
Central Banks (ESCB), will be reduced to regional central banks, comparable to the twelve regional U.S. Federal Reserve Banks.
The replacement of well-weathered national
currencies, such as the German mark, with an
untested euro suggests that the participating countries' expectations of economic or political benefits surpass the expected costs of switching over to
a new currency and that the entire operation is
worth the risk of the new currency's not achieving
the status and stability of some of the existing national moneys. The goal of doser political and
economic integration dearly outweighs the member states' desire for economic policy indepen-

148

Economic and Monetary Union (EMU): Toward a Single Currency

dence. Accordingly, calculation of economic costs

and benefits of a single currency is taking second
place to the costs and benefits of achieving the political goal of deeper European integration. And
yet, if the economic foundation is not solid, the
political goals will become too expensive and the
successful attainment of political and economic
unification will become correspondingly remote.
The Road to Economic and Monetary Union

The road to EMU dates to the foundation of the

European Coal and Steel Community in 1952 and
the broader-based Treaty of Rome in 1957. EMU
received an additional push with the Single European Act (SEA) of 1986, which was designed to
complete the single market program by January 1,
1993. The SEA was the EC's attempt to overcome
Eurosclerosis and an acknowledgment that the
member states could no longer solve their economic problems individually but had to pool resources. The single market was expected to create
a high level of employment through the abolition
of nontariff barriers and the guarantee of four freedoms-free movement of goods, services, people,
and capital. Altogether, Europe would enjoy
economies of scale, become more competitive, increase its international bargaining power, stimulate investment, and achieve a higher rate of
growth. Going beyond that, free capital movement
implied a degree of monetary as weIl as of real
economic integration. Thus, the watchwords of
the European Commission were One Market, One
Money (Commission, 1990) and, one might add,
one central bank.
The movement toward fixed exchange rates
or a single currency has been long in coming and
has been influenced by internal as weIl as external
developments. Although the Treaty of Rome gave
monetary aspects scant attention (Article 117), the
member states established a monetary committee
as early as 1958; it was followed in 1964 by a
committee of central bank governors, established
to minimize member states' pursuit of conflicting
monetary and other economic policies. Over time,
monetary matters took on greater weight, as capital controls were gradually removed. International
capital flows grew faster than trade and had a
growing influence on balance of payments and exchange rates.
Spurring the creation of an EC currency area
was the perception by the late 1960s that a U.S.
policy of "benign neglect" of the international sec-

tor was turning "malign." With the future of the

Bretton Woods system uncertain, the German
mark emerged as the dollar's alternative international reserve and investment currency. This created expectations of a revaluation of the mark,
which occurred in 1969. The dollar and mark thus
entered into a seesaw-a relationship that persisted for the next three decades. Dollar policy and
its impact on the mark, and therefore on other EC
currencies, spurred the member states to search
for a way to decouple themselves from dollar influence by creating a pegged-rate system.
Meanwhile, starting in the late 1950s, academic literature stressed the limits of the peggedrate system and proposed the introduction of flexible exchange rates. Under such a regime,
strong-currency countries' policies would be insulated from the inflationary policies of other countries. Inflationary pressures would be "bottled up"
at horne, internal-external policy conflicts would
be resolved, and balance-of-payments disequilibria, exchange rate misalignments, and reserve inadequacy would be avoided.
The Commis sion, however, supported a system of fixed exchange rates. Some of the Commission's arguments had general relevance, such as
the fear of competitive depreciations and exchange rate volatility. Others were sui generis to
the EC, especially the point that exchange rate
changes complicated already complex calculations of support price and compensation adjustments in the Common Agricultural Policy.
At the Hague summit in December 1969, the
heads of state and government decided to lower
exchange rate flexibility and move toward monetary union. They appointed a committee under the
leadership of Pierre Werner, Luxembourg's prime
minister and finance minister, to devise a system
of eventually inalterably fixed exchange rates for
the EC. In October 1970, the Werner Plan called
for a three-stage, ten-year approach to monetary
union, which the Council of Ministers endorsed in
March 1971. During the plan' s first phase, the
margins of permissible exchange rate fluctuations
and exchange rates changes for member states
were gradually to be reduced, and central bank interventions were to limit exchange rate fluctuations. In the second stage, a European Monetary
Cooperation Fund was to start, aiding with shortand medium-term cr~dit. Exchange controls were
to be loosened and greater economic policy cooperation among the member countries to be

Economic and Monetary Union (EMU): Toward a Single Currency

adopted. In the third stage, beginning in 1980,

EMU was to be achieved, exchange rates irrevocably fixed, capital markets unified, and a regional
central bank established. By the end of the decade,
economic policy would be fully coordinated and
monetary union instituted. Economic developments in the following decade, however, did not
favor realization of the Werner Plan.
Clearly, the push for greater EC monetary cohesion predated the first breakdown of the Bretton
Woods system but intensified when the United
States dosed the gold window on August 15, 1971
(the so-called Nixon shock), effectively setting the
dollar free. Under the December 1971 Smithsonian agreement, which was to salvage the Bretton
Woods system, the International Monetary Fund
(IMF) widened exchange rate margins from 0.75
percent to 2.25 percent. With this development, an
unexpected anomaly ensued for EC member
states: their currencies could henceforth fluctuate
by 9 percent against each other but by only 4.5
percent against the dollar. The EC (plus Sweden
and Norway) narrow-margins arrangement of
March 1972-the famous "snake in the tunnel" involving a band of 2.25 percent-was an informal
arrangement intended to correct this situation.
However, events in the foreign exchange markets
overtook economic arrangements: the Smithsonian agreement collapsed in February 1973, and the
dollar floated, leaving the "snake in the lake" free
to fluctuate against the dollar.
Exchange rate changes against the dollar and
against each other strained the cohesion of EC currencies, especially in the wake of the October 1973
oil shock and member states' contradictory economic policy responses to the inflationary impact
of quadrupling oil prices and ensuing worldwide
recession. When apparent conflicts between domestic and international requirements developed,
the weaker-currency countries dropped out of the
snake rather than accept the hard-currency discipline imposed by German monetary policy, only to
return, as some did, when domestic economic conditions were conducive to following Germany's
economic policies. Dollar weakness aggravated
problems for the EC, as the mark appreciated
against the dollar, pulling other snake currencies
with it, and the narrow-margins arrangement
proved to be untenable for countries with a laxer
monetary policy. By the second half of the 1970s,
the snake had shrunk to a "minisnake," consisting
of Germany and its dosest trading partners (Bel-

149

gium, the Netherlands, and Luxembourg) as permanent snake members. Like the Bretton Woods
system (with the dollar as its anchor), the snake
arrangement (with the mark at its hub) was asymmetrical, as the German central bank's low-inflation monetary policy became the pace setter for the
EC's narrow-margins arrangement.
In the 1960s, under the Bretton Woods system, a persistent debate about EMU had started
between "monetarists" and "economists," a debate
that intensified as the Werner Report was being
prepared and, later, when the international monetary system switched to floating rates among the
major economies. The monetarists daimed that
fixed rates would force convergence in the real
sector to assure exchange rate stability. The economists contended that convergence of fundamentals in the real sector and in the setting of policy
goals was a necessary, if not sufficient, prerequisite for stable exchange rates. Evidence suggests
that under a floating rate regime, inflation rates
can-and do-diverge more than under pegged
rates and that the currencies of high-inflation
countries tend to depreciate against countries with
low inflation. This supports the economists' viewpoint on the prerequisites for successfully installing fixed exchange rates.
The predilection for fixed exchange rates in
the EC has changed little over the years. Both the
rationale for the convergence of fundamentals and
pegged exchange rates and the dramatis personae
have remained constant over the decades. To this
day, the French represent the monetarist school of
thought, whereas the Germans (particularly the
central bank) still adhere to the economist position. Moreover, in the late 1970s, flexible exchange rates were no longer viewed favorably, especially by countries that experienced an
inflation-depreciation spiral. Nor did the anticipated smooth and automatic balance-of-payments
adjustments materialize, and the prediction that
international reserves would no longer be in great
demand proved highly inaccurate. At the same
time, a loss of confidence in the dollar and in U.S.
policy gave the EC's member states a new impetus
to search for greater cohesion among themselves
and distance themselves from the impact of dollar
exchange rate movements.
The European Monetary System

In the fall of 1977, Commission president Roy

Jenkins suggested that Europe should revive the

150

Economic and Monetary Union (EMU): Toward a Single Currency

goal of monetary union. Drawing on Jenkins' proposal, German chancellor Helmut Schmidt and
French president Valery Giscard d'Estaing conc1uded that the time had come to create a regional
but more pliant Bretton Woods-type exchange rate
arrangement for the EC. This was the genesis of
the European Monetary System (EMS) and its narrow-margin exchange rate mechanism (ERM), intended to provide a zone of monetary stability for
Europe. The German central bank feared that most
countries would be unable to stay with a strong
mark, which would either cause instability in the
EMS or force inflationary policies upon Germany.
Although, from the economists' standpoint, the
fundamentals were not propitious for a pegged rate
system, the monetarists ' view prevailed and the
EMS was launched on March 13, 1979.
As with the Bretton Woods system, ERM
members could let their currencies float within a
predeterrnined margin, 2.25 percent, or 6 percent if they were not in the snake at the start of the
EMS. Italy opted for the wider margin; Britain
joined the EMS from the beginning but stayed out
of the ERM until October 1990. However, unlike
both the Bretton Woods system and the snake
arrangements, the ERM was to operate symmetrically for all members. A carefully crafted
EMSIERM was to ensure this symmetry by making the European Currency Unit (ecu)-a composite of participating currencies-the center of the
system. It was to be the ecu against which the
member currencies would establish their central
rates, rather than maintaining the bilateral grid of
national currencies as had existed under the Bretton Woods system and the narrow-margins
arrangement. A currency could thus reach the upper (or lower) limit without another member currency's being at the bottom (or ceiling), as had
been the case with the grid. Currencies pushing
against the ceiling would be as out of step as currencies moving to the floor of the band and could
be forced to take corrective economic policies.
The adjustment burden would thus no longer fall
exc1usively on the weaker currency or currencies.
To assure timely internal policy and/or exchange rate adjustment, a divergence indicator
was installed ("rattlesnake") to sound the alarm
for adjustment when currencies reached 75 percent of the perrnissible divergence from their parity to the ecu. However, an error in the formula
permitted a currency to reach the outer limits before making contact with the divergence indicator.

A Belgian compromise finally accommodated

Germany's objection, and the EMS became a hybrid, using both the ecu and the bilateral grid.
Not entirely unexpectedly, in the early years
of its existence the EMS suffered the fate of its
predecessors, the Bretton Woods system and the
snake, and was considerably less stable than
hoped for. Far from imposing the monetarists '
convergence toward the best-perforrning countries, inflation rates between low- and high-inflation countries at times diverged by over ten percentage points. Again, as under the Bretton Woods
system, tensions between currencies grew, and
necessary exchange rate adjustments were postponed until extreme pressures had developed.
Two camps emerged, and the system did not
work symmetrically. The mark became the anchor,
reserve, and investment currency in the EMS, and
German monetary policy became the pacesetter
for those countries choosing the hard-currency option. After three devaluations of the French franc
within less than two years, French president
Fran~ois Mitterrand took aU-turn in March 1983
and adopted the hard-currency option, thereby
ending the EMS crisis and reducing divergence.
Policy divergence had led to frequent bilateral and
multilateral exchange rate adjustments-eleven
between 1979 and 1987, but mostly during the
first five years of the ERM operation. The novelty,
compared with the Bretton Woods system, was
that bilateral and multilateral exchange rate adjustments followed joint decisions by the EMS
members.
A new phase of stability in the EMS started
in 1987 and lasted until the summer of 1992. During that time many ob servers and market participants assumed that something c1ose1y resembling
fixed rates had arrived and that extraordinary income without commensurate exchange risk was
obtainable by investments in high-interest countries. Accordingly, capital flowed to the highestinterest-rate countries, as investors no longer assumed that the interest rate differential might
reflect risks from future realignments of weaker
currencies.
In this climate and in the wake of the SEA, a
committee for the study of EMU, under the chairmanship of Commission president Jacques De1ors,
issued the Report on Economic and Monetary
Union in the European Community (Commission,
1989). Although written under different assumptions and circumstances (e.g., disbelief in the un-

Economic and Monetary Union (EMU): Toward a Single Currency

employmentlinflation trade-off), the Delors Report harked back to the Wemer Plan and envisioned the implementation of EMU in three
stages, with the first stage beginning in 1990.
The calm after 1987 came to an abrupt end in
the fall of 1992, when exchange rate distortions
became untenable, and Britain and Italy chose to
withdraw from the ERM rather than devalue their
severely overvalued currencies. Another period of
turmoil in August 1993 prompted ERM participants to take the political element out of exchange
rate adjustments and widen the margins of permissible exchange rate fluctuations of ERM currencies to 15 percent, thus eliminating the one-way
option and permitting the system to resemble one
of flexible exchange rates.
Launehing Economic and Monetary Union

At its meeting in Madrid in June 1989, the European Council endorsed the Delors Report and set
July 1, 1990, as the start of Stage 1, whereby exchange controls and most restrictions on capital
movements would be eliminated, national economic policies better coordinated, and central
bank cooperation intensified. It was during Stage
1 that the intergovemmental conference (lGC) on
EMU took place. This time Germany, especially
again its central bank, insisted that the treaty set
criteria for nominal economic convergence as a
prerequisite for the transition to irrevocably fixed
exchange rates or a single currency. Although
clearly spelled out, the criteria-all monetary
ones, and none from the real sectors of the economy (such as growth or unemployment rates)are nevertheless subject to political interpretation
and decisions.
Stage 2, devised as a transition period to the
irrevocable locking of exchange rates, began as
scheduled on January 1, 1994. According to the
Delors Report, Stage 2 would allow the EC to gain
experience with closer policy cooperation and prepare for the final stage by devising multiannual
programs to reduce inflation and budget deficits.
To this end, the European Monetary Institute
(EMI), precursor of the ECB, came into being at
the beginning of Stage 2. The EMI had the tasks
of coordinating member states' monetary policies
and supervising the proper functioning of the
EMS. The Delors Report did not specify how long
Stage 2 would last, and a debate on the issue ensued at the IGC. Some member states wanted
Stage 2 to be as short as possible or to be elimi-

151

nated entirely, arguing that it was neither necessary nor desirable to prepare for the single currency.
In the event, the TEU included a second
stage, which was to last until December 31, 1996,
if more than half the EU member states met the
convergence criteria by that date. Otherwise,
countries meeting the criteria by the end of 1997
would be able to enter Stage 3 on January I, 1999.
Stage 3 would involve establishment of the ECB
and the permanent fixing of exchange rates.
The TEU, devised to ensure EMU's credibility, set the following criteria for prospective participating states: (1) an inflation rate not to exceed
by 1.5 percent that of "the three best-performing
member states"; (2) an interest rate not 2 percent
greater than the average of the three best-performing countries (the assumption being that the countries with the lowest inflation would have the lowest interest rates); (3) membership in the ERM,
without a devaluation, during the two years before
entry into EMU; (4) a deficit-to-GDP ratio not to
exceed 3 percent; and (5) a debt-to-GDP ratio (of
all levels of govemment) not to exceed 60 percent.
It seemed highly unlikely that the EU's two
most important member states, Germany and
France, would meet all of the criteria. France and
Germany had deficits exceeding the 3 percent
limit and were moving away from rather than
coming closer to that reference point. Yet an EMU
without Germany and France is inconceivable. In
the end, the heads of state and govemment will
make a political decision as to wh ich countries
meet the criteria, on the basis of advice from the
Comrnission and the EMI. Already, the guessing
game over who will and who will not be a founder
member of EMU is influencing interest rates and
currency exchange rates (including that of the dollar). Most likely there will be an EMU of at least
two speeds: the founding members or the "ins"
and the outsiders or the "pre-ins." The future "ins"
hope to prevent competitive devaluations by the
"pre-ins" by establishing a system whereby the
nonmembers' currencies could fluctuate against
the euro within a band of 15 percent, modeled on
the ERM and called the ERM 11.
After January 1, 1999, participants in Stage 3
will have a single currency, the euro. One euro
will equal one ecu (at least on paper), and national
currencies will still be legal tender. The method of
calculating exchange rates for that time has not
yet been determined. After the introduction of the

152

Economic and Monetary Union (EMU): Toward 0 Single Currency

euro, the continuity of contracts is guaranteed,

whether they were denorninated in ecu or in national currencies. After January 1, 2002, euro
banknotes and coins will be legal tender, alongside national currencies; the latter will lose legal
tender status no later than July 1,2002.
Expected Economic Costs and Benefits

The costs and benefits of EMU will depend on

whether the euro zone becomes an optimum currency area, with greater mobility of factors of production, goods, and services. Costs to a currency
area increase as demand shocks are concentrated
in one region and a country loses the possibility of
absorbing part of the shock through the exchange
rate mechanism. If European integration leads to
greater real convergence of the member states'
econornies, rather than to greater concentration of
certain industries in certain countries, and if demand shocks therefore become symmetrical, the
loss of the degree of freedom of exchange rate
flexibility will be less critical.
Among the many benefits expected from a
single currency is greater transparency, as prices
in the euro zone will be quoted in the same unit of
account. A single currency will also eliminate
conversion costs. The Comrnission estimates that
these amount to between 0.25 and 0.50 percent of
the EU's GDP. This is not a net benefit to the EU,
however, as an estimated 5 percent of banks' revenues stern from currency transactions. More significantly, EMU will elirninate the exchange rate
risk of currency fluctuations between countries
closely linked in the single market, thereby facilitating an increase in intra-euro zone trade and investments, promoting econornic growth and employment.
Much will depend on whether the participating countries choose the "correct" exchange rate
when they lock their currencies into the euro zone.
For instance, Britain repeated the rnistake of 1925
(return to the gold standard) by entering the ERM
in 1990 at too high a rate for the pound sterling.
This caused high unemployment, which was COfrected only after the first major ERM crisis, when
Britain dropped out of the mechanism in September 1992. Sirnilarly, Germany has been unnecessarily burdened by the choice of too high a conversion rate for the East German mark at the time
of German economic and monetary unification
(July 1, 1990). The EU needs to heed these
lessons.

Conclusion

There is a temptation to compare the move toward

EMU with the move toward completion of the single market and even to argue that EMU is the logical conclusion of market integration. Yet a profound difference exists between these two
occurrences: the single market program had a formal deadline (December 31,1992) for implementing its nearly three hundred directives. At the
same time it was understood that not meeting the
deadline would not cause major problems, as implementation of the directives was part of a longterm, ongoing development. By contrast, although
part of the integration process, EMU represents a
definitive break with the past and arguably should
not be held ho stage to an arbitrary deadline. Most
important, euro zone participants will have to
abandon their own currencies and monetary policy
independence, thereby taking a big political risk.
The business community is split, with large
fmns and banks investing in prospects of EMU,
and smaller fmns more skeptical and reticent. The
markets now vacillate between expectations that
EMU will take off Of will not take off; will take
off on time or will take off late; will take off with
only the northern EU member states (with or without Britain and Denmark, which have negotiated
possible opt-outs) or will take off with most EU
members (including Italy, Portugal, and Spain).
One thing, at least, is certain: whenever it happens, EMU will split the EU into two camps, the
"ins" and the "outs." And it seems unassailable
that a two-speed EMU, and a split EU, will invalidate the slogan One Market, One Money.
See also ECONOMIC AND MONETARY UNION:
POLmCAL IssUEs; EUROPEAN MONETARY SYSTEM.
Bibliography
Commission. 1990. "One Market, One Money: An Evaluation of the Potential Benefits and Costs of Forming an Economic and Monetary Union." European
Economy44.
Commission. 1989. Report on Economic and Monetary
Union in the European Community. Luxembourg:
Office for Official Publications of the European
Communities.
Kenen, Peter B. 1995. Economic and Monetary Union
in Europe: Moving Beyond Maastricht. Cambridge:
Cambridge University Press.
Ludlow, Peter. 1982. The Making of the EMS. London:
Butterworth.

-Hugo M. Kaufmann

Economic Integration Theory

Economlc and Sodal Coheslon

Economlc Convergence

See COHESION POLICY.

See CONVERGENCE.

Economlc and Sodal

Commlttee (ESC)
The Economic and Social Committee (ESC) is an
organ of the EU consisting of 222 part-time members who represent employers, trade unions, and
other interested groups, such as farmers and consumers, and who are appointed by the national
governments. In terms of size and national representation, the ESC's composition is identical to
that of the newer Committee of the Regions
(COR). Indeed, the COR and ESC share facilities
in Brussels.
The inc1usion of the ESC in the original
Treaty of Rome reflected the EC founders' desire
to involve representatives of social and economic
groups in EC policy formulation. Thus, the ESC's
purpose is to proffer advice to the Council and
Commission on pending legislation. The ESC produces approximately two hundred consultative
documents annuaIly, the majority of which are
opinions requested by the Council or the Commission. The rest are reports issued on the ESC's own
initiative (since 1972 the committee has had the
right to give its view on any matter of EC interest)
or information reports. Although in some cases an
ESC opinion is obligatory before proposals can
become law, the Council and Commission rarely
heed the ESC's advice. The committee's output is
a valuable and generally underused source of EU
policy analysis.
See also APPENDIX 1.

Economlc Commlsslon for

Europe (ECE)
Established in 1947, the Economic Commission
for Europe (ECE) was a UN-sponsored organization that took over the work of various wartime
and immediate postwar organizations charged
with reconstruction. Thereafter the ECE promoted
economic cooperation (mostly regulatory issues)
and devoted much of its attention in the late 1980s
and early 1990s to helping Central and Eastem
European states make the transition to a market
economy. The ECE's fiftieth anniversary, celebrated at its 1997 annual session, was accompanied by a major overhaul of its activities, objectives, and resources.

1 53

Economlc Integration Theory

Economic integration means abolishing barriers to
trade and investment as weIl as adopting comprehensive competition rules for goods and factor
markets (e.g., capital and labor markets). One may
distinguish between monetary integration, in
which countries move toward absolutely fixed exchange rates or a common currency, and real integration, which refers to trade and foreign investment.
Removing trade barriers does not necessarily
result in full factor mobility, especially labor mobility. Standard neoc1assical integration and trade
theory shows that free trade among a group of
countries will induce an equality of factor returns.
This is because the country weIl endowed with
capital will specialize in the production and export
of capital-intensive goods while importing laborintensive goods, effectively increasing its labor
supply, whereas the country weIl endowed with
labor will do the opposite, thus effectively enhancing its supply of capital. In the end the profit-wage
ratios in both countries will be equal. If after several decades trade has led to similar real wage
rates in the countries of a regional integration
scheme, there should be no dramatic labor movements even if all restrictions on mobility of production factors are lifted. All four basic freedoms-free trade in goods and services, free
capital movement, and free labor mobility-are
ensured in the EU single market, a situation that
came about only gradually.
In a two-country model, traditional economic
theory shows that switching from autarky to free
trade improves welfare in the sense that global
consumption can be increased through trade.
More generally, the elimination of tariff barriers
benefits the world economy because producers
with the lowest costs can increase their market
share. However, dynarnic models that take into account growth, research and development (R&D),
and the role of multinationals will often paint a
different picture than short-term static analysis
based on a partial equilibrium model (Tironi,
1982; Ethier, 1986; Klodt, 1992).
If interindustry trade is dominant, there could
be serious transitory adjustment costs, since the
expansion of foreign [ums in a certain sector will

154

Economic Integration Theory

be accompanied by the contraction of this sector

in the horne country. Thus workers will have to
shift from dedining sectors to expanding industries. If intraindustry trade is dominant-a typical
finding for EU countries-adjustment problems
are relatively small; for example, automotive firms
in country A will specialize in the production and
export of big cars while firms in country B will
specialize in the production of small cars.
Transitory adjustment problems, which are
rarely considered in economic models, could become permanent problems if long-term unemployment erodes the skills of laid-off workers.
These workers will find it impossible to [md a new
job at the old wage rate. In some cases the structure of the economy slows adjustment to change,
possibly because wages cannot fall easily (perhaps
as a result of regulation or strong resistance from
labor) or because of barriers to shutting down failing firms or starting new ventures. These factors
can cause major economic problems, such as persistent unemployment, unless governments are allowed to compensate through exchange rate adjustments.
Traditionallntegration Theory

Economic integration can vary in intensity. The

lowest level of integration consists of preferential
trade arrangements in which countries accord each
other low tariff rates for imports while outsiders
continue to face high tariff rates. A more intensive
form of integration is a free trade area (FrA) that
abolishes tariffs between participating countries
while each country maintains an individual tariff
vis-a-vis third countries. The main benefit is trade
creation between the FrA countries, whose producers also can more easily exploit economies of
scale. The next step, a customs union, harmonizes
external tariffs of member countries, so that the
common external tariff (CET) typically is close to
the members' pre-customs union average tariff
rate. This implies a tariff increase for some outside
producers. Finally, a common market combines
product market integration with factor mobility,
which tends to equalize returns on factors of production throughout the market.
Benefits in a customs union occur in the form
of trade creation (higher trade in goods among
member countries), but there will also be trade diversion for outsider countries, that is, previous external suppliers will be crowded out by firms inside the customs union that no longer face a tariff

burden. Insider firms benefit as long as their product costs are below the total cost (price plus tariff)
of competing imported products. Whether the
combined effects of trade creation (positive effect)
and trade diversion (negative effect) will be positive depends on various factors, induding the
number of countries involved in the customs
union (Pomfret, 1986; Jovanovic, 1992). Although
the world gains from trade liberalization, the formation of a customs union does not always enhance global welfare. However, the negative effects of trade diversion are insignificant as long as
the customs union stimulates economic growth so
that import demand for both internal and external
imports is raised.
It is not always dear that the elimination of
trade barriers within regions makes the world economy better off, although elimination of quantitative
restrictions is always welfare improving. Although
tradition al trade theory has no dear-cut answers for
regional economic integration schemes, modern
theory, which takes into account the effects of product differentiation and innovation, presents a
stronger case for regional integration.
The EC achieved a customs union in 1968
and then proceeded toward further integration.
The removal of restrictions on trade in services
and the creation of a common market with common competition policy mIes were fully achieved
by the single market program, which also abolished physical trade barriers (border controls) and
introduced the principle of mutual recognition of
standards. The EU single market program has
brought major economic benefits, but it is undear
whether benefits will be spread evenly among
member countries and whether the single market
will benefit all main outsider trading partners
(Hutbauer, 1990; Neven, 1990; Tichy, 1992).
Because trade takes place in space, distances
and transportation costs are important. Thus, trade
between neighboring countries should be relatively
high, especially if the respective per capita incomes and GDP growth are high (the former offering opportunities for trade in differentiated products and the latter fueling demand for traded
goods). Hence, if formation of a customs union
stimulates economic growth and economic convergence toward high per capita incomes, regional
clusters in world trade will develop. This is already
the case: seventy-five percent of the EU's trade is
intra-EU trade and trade with other European
countries. Partlyas a result of the North American

Economic Integration Theory

Free Trade Agreement, U.S. trade is dominated by

Canada and Mexico. Similarly, intra-Asian trade
has grown since the Association of Southeast
Asian Nations adopted a trade liberalization program in 1995. A considerable share of trade is accounted for by multinational companies whose international networks represent both vertical
integration (linking downstream and upstream activities) and horizontal integration at the firm level.
Real capital mobility has increased worldwide
since 1985, and the EU has been able to attract rising foreign direct investment (FDI) inflows, especially owing to increasing intra-EU flows. With
ongoing privatization and deregulation of public
utilities and other sectors, new opportunities exist
for the formation of EU multinationals. Moreover,
FDI is also influenced by the level of innovation of
individual firms. The higher the technologicallevel
in a particular country, for example, the higher its
relative share in world patents, the greater the incentive for its firms to produce abroad as a means
of exploiting other countries' advantages while at
the same time protecting the firm's advantage.
From the perspective of an innovative firm, licenses are very poor substitutes for FDI, as the licensee is likely to reinforce its competitive position at relatively little cost, especially as
information markets are imperfect and intellectual
property rights weak. Areal appreciation of its
horne country's currency will increase a firm's
ability to acquire foreign firms, which will become
relatively less expensive. Also, the absence of a
language barrier between countries facilitates investment (Froot and Stein, 1991).
New Integration and New Growth Theory
The new theory of integration focuses on internal
economies of scale (average costs in a large firm
are lower than in small firms) and external
economies of scale (firms near each other enjoy
certain spillover effects; for example, the R&D results of an innovator can be observed by neighboring firms). Economies of scale can be more easily
exploited within a group of integrating countries.
However, firms from outsider countries might suffer, as their exports to the integrating countries
could fall. Nevertheless, external economies of
scale in a customs union can be exploited by outsiders to the extent that there are no restrictions on
FDI inflows. Product differentiation also plays a
role in recent models, which assurne that the
larger variety of goods produced in a large cus-

155

toms union, as opposed to stand-alone countries,

will benefit consumers. Analyses show that, in a
free trade regime, benefits accrue to both the
country producing under economies of scale and
the importing country. Indeed, trade is shown to
be a full substitute for factor mobility, and dynamic economies of scale achieved via the single
market program could yield a permanent increase
in the EU's growth rate (Baldwin, 1989).
Benefits from regional free trade in the presence of economies of scale will accrue differently
to the countries involved in a customs union depending on the type of specialization pursued by
individual countries. For example, country A, specializing in aerospace production, will derive a
larger benefit if economic rents in the aerospace
industry are higher than in the locomotive industry. However, benefits across countries could be
shared more equally if FDI flows from country B
to A, that is, if part of country A's aerospace industry is owned by citizens of country B. This issue
still has to be explored analytically.
Trade with differentiated products leads to
oligopolistic interdependence that can stimulate
different forms of strategic pricing and investment behavior. Recent approaches emphasize the
role of R&D in combination with dynamic
economies of scale. Dynamic economies of scale
imply unit cost reduction as a function of cumulated output, which can be modeled explicitly in
the industry's leaming curve for a given generation of products. For example, the first one thousand units of a new chip generation will have a
high percentage of technical misprints on the chip
surface-say, only 50 percent are error free and
can be sold-but after 100,000 units the failure
rate falls to 10 percent. This implies that regional
integration can reinforce the customs union's international competitiveness, because a larger domestic market in combination with government
procurement in favor of domestic firms or govemment R&D subsidies for those firms facilitates
innovators' attempts to move quickly down the
learning curve (Brander and Spencer, 1981,
1985). This in turn means that foreign markets
can be attacked with re1atively low prices.
Trade diversion might indeed be we1comed
by members of the customs union because foreign
competitors in high-technology industries could
find it harder to increase sales and thus move more
quickly down the steep learning curve characteristic of high-technology goods toward more effi-

, 56

Economic Integration Theory

cient production. In the absence of innovation and

economies of scale, trade diversion for outsiders
could still be we1comed by the customs union to
the extent that it can improve its terms of trade.
This would be the case if, as a consequence of
trade diversion, excess capacities of outsiders depress world market prices for those goods as well
as intermediate inputs, which can then be imported at relatively reduced prices by the customs
union members.
In a customs union, consumers enjoy a greater
variety of products if firms can spread fixed R&D
costs over a greater number of consumers. As large
countries have relatively favorable starting conditions for high-technology production (where R&D
costs have to be spread over a large number of consumers), the formation of a customs union might
reinforce such first mover advantages in the international technology race. Thus, people living in
large countries could benefit more from a customs
union than those in small countries. Generally, empirical evidence shows a mixed picture of economic convergence in the EU. Although considerable convergence has taken place among the
original member states, there is a sustained northsouth divide within today's EU. This could also be
explained by new growth theory, which argues that
agglomeration advantages in a setting with skilIed
personne1 and R&D could imply that integration
reinforces the position of central regions (leading
regions in economic terms).
The reduction of political risk as a consequence of market integration means that new
member states benefit from additional foreign direct investment flows from source countries in the
customs union (Welfens, 1996c). Indeed the overall investment output ratio in the union will increase, resulting in positive growth effects. This
will be the case especially if the increased presence
of foreign investors brings positive technology
spillover effects for the host country so that the
marginal product of capital increases (Welfens,
1992). Indeed, Spain and Portugal recorded high
per capita FDI inflows after joining the EC, which
certainly contributed to economic growth on the
Iberian Peninsula. In the 1980s Greece was a counterexample because poor domestic macroeconomic
policies and lack of privatization rendered the
country unattractive for foreign investors. It is
symptomatic that Greece consistently recorded
low growth and high inflation rates in the fifteen
years after EC accession in 1981, so that its cur-

rency could not join the exchange rate mechanism

of the European Monetary System (EMS).
Economic integration increasingly relies on
multinational companies, which account for about
33 percent of trade between developed countries
and for most of international technology trade. Intracompany trade in goods and technologies plays
an important role in technology intensive industries, which are likely to increase in the EU. This
follows from the opening up of Central and Eastern Europe, whose producers can easily invade
EU markets with standard products, thereby giving EU firms an incentive to move up the technology ladder. As firm-specific advantages (typically
tied to innovations) are the basis for multinational
investment abroad, it is dear that EU firms increasingly will become multinational companies.
This tendency is reinforced by EU R&D programs, which encourage intra-EU cooperation,
and by the formation of EU joint ventures. It will
also be stimulated by Economic and Monetary
Union (EMU) and the growth of EU financial
markets, which will facilitate corporate takeovers.
Monetary Union and
Economic Integration Theory

Beyond the free movement of goods and services

within a common market, economic liberalization
can encompass full liberalization of capital flows
and even a currency union that establishes absolutely fixed exchange rates and a common currency (De Grauwe, 1997; Welfens, 1996a). The
highest form of economic integration is an economic and monetary union, a step the EU plans to
take in 1999 by combining the single market with
a single currency (the euro). Countries can organize monetary integration in various ways, depending on the degree of national monetary policy
autonomy left to them. Fixing parities, with a certain bandwidth for the exchange rate(s), reinforces
market transparency and can reduce exchange rate
risk under certain circumstances so that productmarket integration is reinforced. With competitive
tradables markets there will also be strong pressure on prices of tradable goods to equal prices
abroad (in terms of an exchange rate reflecting
purchasing power parity). The monetary approach
to the balance of payments shows that except for
dominant world reserve currency countries-notably the United States and Germany-no country
can pursue autonomous monetary policy. Policy
measures could be important for reducing the vari-

Economic Integration Theory

ance of output and employment relative to that of

the initial shock caused by full monetary integration, and maintaining full employment will support aggregate demand in the customs union and
indeed could be a political prerequisite for maintaining economic integration.
As a result of the post-World War TI Bretton
Woods system, exchange rate stability endured in
Western Europe until 1973, when EC member
states switched to floating exchange rates.
Launched in 1979, the EMS's exchange rate mechanism (ERM) worked fairly weIl with a standard
parity margin of 2.25 percent (a wider band of 6
percent applied to some participating currencies).
But in 1992, faced with massive speculative attacks, Britain and Italy left the ERM and floated
their currencies (although Italy reentered in November 1996). Other countries stayed in the ERM
but devalued and widened their parity margins to
15 percent. France and other countries argued that
British and Italian exports benefited unfairly after
1992, as the pound and the lira devalued by up to
30 percent, thereby giving both countries a massive
price advantage and threatening the integrity of the
single market. The 1992 currency crisis reinforced
French and German industry's support for a monetary union that would eliminate competitive devaluations once and for all in the EU.
Already in 1970 the Commission had proposed monetary union after a ten-year transition
program (the Werner Plan). However, this was
never implemented, as the oil price shocks of
1974 underrnined efforts for a common monetary
policy and further economic integration. The 1989
Delors Report was a second blueprint for EMU,
which the member states largely adopted in the
Treaty on European Union (TEU). However, they
failed to meet the nominal convergence criteria on
time for the 1997 deadline. The Commission
claims that monetary union is a natural complement for the single market and, hence, an essential
aspect of real economic integration. The main argument for a positive link between monetary
union and trade expansion is that full monetary integration eliminates exchange rate risks within the
EU (or an EU sub set ofEMU countries) while external shocks cause reduced volatility of macroeconomic aggregates.
Another possible consequence of EMU is that
a different euro-dollar exchange rate (compared to
the previous ecu-dollar rate) could trigger higher
FDI inflow for the EU. If the euro is weaker than

157

the ecu, U.S. foreign investors will be able to acquire EU companies more easily. However, with
an appreciating euro, EU companies could more
easily acquire U.S. companies or companies in
countries whose exchange rate is linked to the dollar. To the extent that a higher inward EU foreign
direct investment stock stimulates EU imports, this
would mitigate the trade diversion effects ofEMU.
Monetary union should create more integrated
and competitive financial markets, which should in
turn lead to lower nominal and real interest ratesassurning that the new European Central Bank can
quickly establish an anti-inflation reputation.
Lower real interest rates would stimulate economic
growth and increase the real value 'of assets,
thereby enhancing economic welfare. To the extent
that EMU causes permanent unemployment, however, there is a welfare loss.
Conc/usion

Further EU enlargement, which silently began with

German unification, will raise various problems
that can be assessed on the basis of modem theory,
including the gravity equation (Baldwin, 1994;
Welfens, 1996b; Welfens, 1997a). Although the
creation of a larger customs union will reinforce
the exploitation of economies of scale and trade in
differentiated products, it is unclear whether there
will be economic convergence within the enlarged
EU and among the newcomers themselves. The
longer the economic catching-up process takes, the
higher the EU budgetary transfers necessary for
the newcomers. This will be a major political issue
in the EU as long as high unemployment rates persist. Europe's his tory of interwar dis integration
shows that protectionism can rapidly emerge from
a situation of political instability and high unemployment rates (Tilly and Welfens, 1996). Thus, a
comprehensive theory of integration will have to
take into account unemployment differentials
among countries-affecting labor mobility even
under factor equalization-and the impact of
multinational companies (Welfens, 1997b). The
most recent strand of research, which combines the
effects of FDI and regional integration and takes
into account the reduction of global political transactions costs, strongly supports the case for regional integration, provided that it is embedded in
the overarching framework of the World Trade Organization (WTO).
An important final aspect of regional integration is that functional integration schemes, which

158

ECS

stimulate trade both within the group and globally,

are a way to reduce international political transaction costs. In view of the proliferation of nationstates after the end of the Cold War, international
organizations are finding it more and more difficult to reach a consensus about liberalization and
dispute settlement procedures. Thus, WTO conflict resolution could be facilitated by integration
schemes that first reinforce free trade regionally
and then help organize trade between customs
unions. Yet there is also the risk that regional trading blocs could compete so keenly against each
other that political cooperation and global liberalization (induding the maintenance of free trade)
could become impossible between trading blocs.
The EU plays a key role internationally because its visible success has encouraged regional
integration schemes elsewhere. If EMU is successful, other regional groupings willlikely try to
launch some form of monetary integration. Indeed, full global economic and monetary integration might be the ultimate ideal. However, remaining barriers between regions arguably could serve
as a useful buffer, slowing the spread of economic
disruption caused by external shocks. In a fully integrated world economy, economic shocks would
rapidly affect all countries.
Whatever one thinks about eventual global
economic integration, regional economic integration has undoubtedly benefited Western Europe
and the world generally. Moreover, integration
theory bears out the advantages of economic liberalization in Central and Eastern Europe and gives
a valuable impetus to reform efforts in the former
Soviet Union and elsewhere.
See also COMMON COMMERCIAL POLICY;
COMMON MARKET.

Bibliography
Baldwin, R. 1989. ''The Growth Effects of 1992." Economic Policy, no. 9, pp. 247-281.
- - - . 1994. Towards an Integrated Europe. London:
Council for European Policy Research.
Brander, I. A., and B. Spencer. 1981. ''Tariffs and the
Extraction of Monopoly Rents Under Potential Entry." Canadian Journal of Economics 14, pp.
371-389.
---.1985. "Export Subsidies and International Market Share Rivalry." Journal of International Economics 18, pp. 83-100.
De Grauwe, P. 1992. The Economics of Monetary Integration. London: Macmillan.
Ethier, W. 1986. "The Multinational Finn." Quarterly
Journal of Economics 101, pp. 805-834.

Froot, K. A., and I. C. Stein. 1991. "Exchange Rates and

Foreign Direct Investment: An Imperfect Capital
Markets Approach." Quarterly Journal of Economics (November), pp. 1191-1217.
Hufbauer, G. C., ed. 1990. Europe 1992. An American
Perspective. Washington, DC: Brookings.
Iovanovic, M. N. 1992. International Economic Integration. London: Routiedge.
Klodt, H. 1992. ''Technology-Based Trade and Multinationals' Investment in Europe: Structural Change and
Competition in Schumpeterian Goods." In M. Klein
and P.J.I. Welfens, eds., Multinationals in the New
Europe and Global Trade, pp. 107-121. Heide1berg
and New York: Springer.
Neven, E. 1990. "EEC Integration Towards 1992: Some
Distributional Aspects." Economic Policy 5, 1, pp.
14-46.
Pomfret, R. 1986. ''The Trade-Diverting Bias of Preferential Trading Arrangements." Journal of Common
Market Studies 24,2, pp. 109-117.
Tichy, G. 1992. ''Theoretical and Empirical Considerations on the Dimension of an Optimum Integration
Area in Europe." Aussenwirtschaft 47, pp. 107-137.
Tilly, R., and P.J.I. Welfens, eds. 1996. European Economic Integration as aChalienge to Industry and
Government. Heidelberg and New York: Springer.
Tironi, E. 1982. Customs Union Theory in the Presence
of Foreign Firms. Oxford: Oxford Economic Papers,
pp. 150--171.
Welfens, P.I.I. 1992. ''The Economic Challenges of Privatization and Foreign Direct Investment in Eastern
Europe." Management International Review 32, no.
3, pp. 199-218.
- - - . 1996a. European Monetary Integration. 3d rev.
and enlarged ed. Heidelberg and New York:
Springer.

- - - . 1996b. Economic Aspects of German Unification. 2d rev. and enlarged ed. Heidelberg and New
York: Springer.
- - - . 1996c. ''The EU Facing Economic Opening-Up
in Eastern Europe: Problems, Issues and Policy Options." In R. Tilly and P.I.I. Welfens, eds., European
Economic Integration as aChalienge to Industry
and Government, pp. 103-172. Heidelberg and New
York: Springer.
- - - . 1997a. The Single Market and the Eastern Enlargement of the EU. Heidelberg and New York:
Springer.
- - - . 1997b. Product-Market Integration in the Presence of MNCS and Unemployment: Towards a New
Theory of Economic Integration. EIIW Working Paper, Potsdam University.

-Paul1.1. Welfens

ECS
See EUROPEAN COMPANY

STATUTE.

Education, Vocational Training, and Youth Policy

ECSAs
See EUROPEAN COMMUNITY STUDIES ASSOCIATIONS.

ECSC
See EUROPEAN COAL AND STEEL COMMUNITY.

ECSC Consultatlve Commlttee

See EUROPEAN COAL AND STEEL COMMUNITY CONSULTATIVE COMMITTEE.

Ecu
Ecu is both the word for an ancient French coin
and the acronym (as ECU) for European Currency
Unit, an artificial currency used to maintain a parity grid and a divergence indicator in the Exchange Rate Mechanism (ERM) of the European
Monetary System. The value of the ecu is based
on a basket of member state currencies, weighted
according to the strength of those currencies. The
ecu is also used for accounting purposes in the
EU's institutions. Finally, the ecu is a prototypical
single European currency. Indeed, when Stage 3
of Econornic and Monetary Union (EMU) begins,
the ecu will be replaced by the euro, and the rates
at which member states' currencies are to be irrevocably fixed in relation to each other and to the
euro will be deterrnined.
See also HARn ECU.

EDC
See EUROPEAN DEFENSE COMMUNITY.

EDF
See EUROPEAN DEVELOPMENT FUND.

EDIG
See EUROPEAN DEFENSE INDUSTRY GROUP.

Educatlon, Vocatlonal Training,

and Youth Pollcy
Education and training are areas in which member
states have largely preferred to go their separate
ways and in which the Commission has achieved
comparatively littIe. Furthermore, national self-interest has generally been strongest among member

159

states that pretend the greatest enthusiasm for the

single market. For example, one major achievement, the 1989 directive requiring member states
to recognize each other's diplomas of higher education, has yet to be passed into Belgian national
law.
It is accordingly fortunl!-te that convergence
in educational and training standards toward the
levels enjoyed in the most affluent member states
has been a characteristic of market forces over the
past decade. There has been a steady increase in
the proportion of the 25-59 age group attaining an
educational level corresponding to at least upper
secondary education (which rose to 57 percent for
the EC Twelve in 1994) and also in the proportion
obtaining a degree. This improvement has been
most marked in countries in which education levels were very low before the country joined the
Community, but the gap between best and worst
remains wide. Thus, whereas over 85 percent of
the 25-29 age group in 1994 had completed upper
secondary education in Denmark, Germany, and
the Netherlands, the Portuguese equivalent was 35
percent and that for Spain was 50 percent. What is
arguably more alarrning is that the proportions for
Britain and Italy were below 60 percent. Furthermore, urban/rural disparities are not merely undesirably wide in Greece, Spain, Portugal, Denmark,
and Italy but appear in many cases to be even
wider among young people, who tend to gravitate
to urban areas for their upper secondary education. In contrast, such disparities are insignificant
in Germany, the Netherlands, and Britain. Britain
is the only country to show no locational disparity
in respect to higher education.
Educational levels are improving more
rapidly among women than among men. Indeed,
roughly the same proportion of women as men
currently complete upper secondary education in
the EU. Nevertheless, family background still
plays apart. Within the EU, the probability of a
child's progressing beyond compulsory schooling
is closely related to the educationallevel achieved
by both parents and in particular by the head of
household. Broadly speaking, the higher the educational achievement, the greater the probability
of being in work, especially where women are
concerned, with this correlation showing up most
markedly in Italy and the Netherlands. In the EC
Twelve in 1994, those with degrees had an average unemployment rate of 6.1 percent; the rate for
those who had completed upper secondary educa-

1 60

Education, Vocationaf Training, and Youth Policy

tion stood at 8.8 percent; and unemployment for

those who had completed the minimum compulsory schooling stood at 13.2 percent. In most
countries, and especially for women, a degree offers the best possible long-term protection against
unemployment. Furthermore, this is most obviously true for recent.graduates for whom work experience is less relevant. Nevertheless, this group
is struggling to find appropriate jobs, especially
with long-term contracts, during the current period of low growth, and overqualification has become a serious issue that needs to be addressed.

The Community Rofe in Education

Education is of fundamental importance for economic and social welfare. Traditionally, however,
its costs and benefits were seen as wholly national
in scope, and education was accordingly exc1uded
from the Treaty of Rome in 1957. During the ensuing two decades, a number of nonbinding resolutions and conc1usions by the Community, in particular the 1976 resolution of the Council of
ministers of education conceming a program of
action on education, provided a framework within
which member states could begin to cooperate.
The Stuttgart Dec1aration of June 1983 and
the Fontainebleau Dec1aration of June 1984 laid
down the foundation for the concept of European
citizenship, which in turn generated a need to place
much more emphasis upon the culture and history
of Europe as a whole and for this to be promoted
via cooperation between institutions of higher education. The Single European Act (SEA) of 1986
further emphasized the need for a European dimension in education, which found its expression
in a Council resolution in May 1988 inviting the
Community and member states to integrate the European dimension into the school curriculum,
teaching material, and teacher training.
The Treaty on European Union (Chapter 3,
Artic1e 126) articulated this in a more formal manner, stating that "the Community shall contribute
to the development of quality education by encouraging cooperation between member states
with a view to developing the European dimension in education, particularly through the teaching and dissemination of the languages of the
member states; encouraging mobility of students
and teachers, inter alia by encouraging the academic recognition of diplomas and periods of study;
promoting cooperation between educational establishments; developing exchanges of informa-

tion and experience on issues common to the education systems of the member states; encouraging
the development of youth exchanges and of exchanges of socio-educational instructors; and encouraging the development of distance education."
The existence of a treaty artic1e means that the
EU's legal framework of directives and other instruments could be brought into play for the first
time. It was intended that this would be directed
primarily toward school-Ieve1 education, with other
artic1es (such as Artic1e 127) covering vocational
training. However, the Commission was aware that
member states would not appreciate being told how
to run their schools, and Artic1e 126 was careful to
point out that nothing would be done without "fully
respecting the responsibility of member states for
the content and the organization of education systems and their cultural and linguistic diversity." The
Commission's green paper on the European dimension of education constantly reiterates this desire
not to offend member states and is careful to point
out that it "does not comprise aproposal" and that
its contents are "indicative of the actions which
could most appropriately be encouraged by the
Community" (Commission, 1993).
The Community was able, however, to initiate a noncontroversial series of action programs in
the field of education and academic exchange,
commencing at the end of the 1980s, managed by
the Task Force for Human Resources (TFHR).
These programs inc1uded the European Community Action Scheme for the Mobility of University
Students (ERASMUS) (1987-1994) and the Action Program to Promote Foreign Language Competence in the European Community (LINGUA)
(1990-1994).
The current Community action program,
called SOCRATES, has a budget of ECU 1,000
million covering 1995 to 1999 and is designed to
encourage innovation and improve the quality of
education through strengthening cooperation
between the various educational institutions.
SOCRATES activities comprise ERASMUS for
higher education, L'Europe a l'ecole for school
education, and horizontal measures, inc1uding the
promotion of languages.

The Community Rofe in Vocationaf Training

Action prograrns were also devised in relation to
vocational training, with a view to providing a supportive role to the Research and Technological Development Framework Program. They inc1uded the

fLOR

Community Action Program in Education and

Training for Technology (COMETT) (1986-1994);
PETRA (a program for the vocational training of
young people and their preparation for adult and
working life, 1988-1994); EUROTECHNET (a
program to promote innovation in the field of vocational training resulting from technological change
in the EC, 1990-1994); and FORCE (an action program for the development of continuing vocational
training in the EC, 1991-1994).
The current EU umbrella program, called
LEONARDO DA VINCI, has a budget of ECU
800 million covering the 1995-1999 period and is
designed to ensure the implementation of a vocational training policy to support and supplement
the action of the member states as a means toward
realizing an open European area for vocational
training and qualifications. LEONARDO consists
of three parts: measures to sustain the quality of
member states' systems, arrangements, and policies; measures to support innovative capacity in
actions on the training market; and networks and
accompanying measures (promotion of the European dimension).
In addition to SOCRATES and LEONARDO,
other programs cover professional training and
youth exchanges. For instance, Youth for Europe
m (1995-1999) extends the earlier programs covering youth exchanges and youth policy and has as
its main objective the fostering of quality education through enabling young people, and especially the disadvantaged, to participate in exchange activities.
Even though the above programs are to be
highly commended, a note of caution is nevertheless
in order. The Comrnission has stated that the promotion of the European dimension is to he approached
primarily through "mobility and the knowledge of
several languages" and "the academic and vocational recognition of diplomas" (Comrnission, 1994,
p. 11). However, as indicated earlier, current high
levels of unemployment, especially among young
people, are fostering a tendency among some memher states to retain barriers against the free movement of labor throughout the EU.

Bibliography
Benner, Dietrich, and Dieter Lenzer. 1996. Education
for the New Europe. Providence, RI: Berghahn
Books.
Brock, Colin, and Witold Talasiewicz. 1994. Education
in a Single Europe. London: Routledge.

161

Commission. 1993. Green Paper on the European Dimension of Education. COM(93)457 Final. Luxembourg: Office for Offidal Publications of the European Communities.
- - - . 1994. "Communication from the Commission
to the Council, the European Parliament, the Economic and Sodal Committee and to the Committee
of the Regions. Education and Training in the Face
of Technological, Industrial, and Sodal Challenges:
First Thoughts." COM(94)528 Final. Luxembourg:
Office for Official Publications of the European
Communities.
- - - . 1996a. Education and Training: Tackling Unemployment. Luxembourg: Office for Official Publications of the European Communities.
- - - . 1996b. Youth for Europe: A Program for All
Young People, 1995-2000. Luxembourg: Office for
Official Publications of the European Communities.

-Peter Curwen

EEA
See

EUROPEAN EcONOMIC AREA; EUROPEAN ENVI-

RONMENT AGENCY.

EEC
See EUROPEAN ECONOMIC COMMUNITY.

EEIG
See EUROPEAN ECONOMIC INrEREST GROUPING.

EFTA
See EUROPEAN FREE TRAoE ASSOCIATION.

EI
See EUROPEAN INVESTMENT BANK.

EICs
See

EUROPEAN INFORMATION CENTERS.

ElF
See EUROPEAN INVEsTMENT FUND.

ELDR
See

EUROPEAN LIBERAL, DEMOCRATIC, ANO RE-

FORMIST PARTY.

1 62

Elysee Treaty

Elysee Treaty

The Treaty of Friendship and Reconciliation

signed by French president Charles de Gaulle and
Gennan chancellor Konrad Adenauer in the Elysee
Palace, Paris, in January 1963 was a landmark in
postwar Franco-Gennan relations. In the so-called
Elysee treaty, both sides pledged "to consult each
other, prior to any decision, on all questions of foreign policy . . . with a view to reaching an analogous position" and established an elaborate consultative mechanism of biannual summits, joint
councils of finance and defense ministers, and an
active youth exchange program. Initially the treaty
alarmed many in Gennany-ineluding members of
Adenauer's own Christian Democratic party-who
feared that the chancellor was being unduly influenced by de Gaulle, who was then pursuing a
seemingly anti-American and anti-EC foreign policy. Accordingly, a new preamble to the treaty, inserted at the insistence of a majority in the Gennan
parliament in May 1963, asserted Gennany's primary commitment to existing alliance obligations
and subordinated the Franco-Gennan entente to
Gennany's multilateral obligations in the Atlantic
Alliance, the EC, and even the GATT.
Weakened as an instrument of Gaullist policy,
the Elysee treaty instead became an important
building block for deeper European in.tegration.
Despite his disappointment over the Gennan parliament's behavior, de Gaulle continued to attend regular bilateral meetings under the tenns of the treaty.
More important, subsequent French presidents and
Gennan chancellors, as well as a host of government ministers and officials, similarly stuck to a
fixed schedule of bilateral meetings. With the rapid
improvement of Franco-Gennan relations in the
early 1970s and a growing consensus in both countries about the importance of deeper integration,
these frequent, institutionalized contacts facilitated
the EC's revival in the 1980s and remain an essential element of the EU's momentum to this day.
See also FRANCE, GERMANY, AND POST-COLD
WAREUROPE.

Emblem
SeeFLAG.

EMEA
See EUROPEAN AGENCY FOR THE EVALUATION OF
MEDICINAL PRODUCTS.

EMI
See EUROPEAN MONETARY INSTITUTE.

Employment Pact
See CONFIDENCE PACT ON EMPLOYMENT.

Empty Chalr Crlsls

The Empty Chair Crisis, which takes its name

from France's withdrawal from the Council of
Ministers and the Committee of Pennanent Representatives (COREPER) in July 1965, brought the
EC to a standstill until the crisis was resolved by
the so-called Luxembourg Compromise of January 1966. Even after France resumed full participation in the EC's institutions, the tenns of the
Luxembourg Compromise impaired the Community's development for nearly twenty years, until
political and economic changes in the mid-1980s
obliged the member states to refonn decisionmaking in the Council.
The crisis began over the Commission's proposals to link a financial provision for the Common Agricultural Policy (CAP) with greater
power for itself and the European Parliament
(EP). President Charles de Gaulle of France
wanted a new financial arrangement for the CAP
but not enough to sanction the Commission's plan.
Moreover, de Gaulle objected to the introduction
of majority voting in the Council of Ministers,
mandated by the Treaty of Rome to come into operation in January 1966. For de Gaulle, an ardent
intergovernmentalist, the prospect of being outvoted in an international organization was unacceptable.
De Gaulle withdrew French representation
from the EC in July 1965 after the breakdown of
talks to consider the Commission's CAP proposals. Three months later he announced that France
would not retake its seat in the Council unless the
member states agreed to defer majority voting.
The others refused to comply. Thus the crisis
seemed set to continue indefinitely, until de
Gaulle suffered a setback in the presidential election of December 1965. Although victorious, de
Gaulle had to fight off a stiff challenge from
Fran~ois Mitterrand, who ran on a pro-EC ticket.
Chastened, de Gaulle decided to return to the negotiating table.
The crisis finally came to a elose at a foreign
ministers' meeting in Luxembourg on January 28

Energy Policy

and 29, 1966, where agreement was reached to

adopt an interim fmancial regulation for the CAP,
deferring the question of additional powers for the
Commission and the EP. Majority voting in the
Council remained the outstanding issue. After restating their positions, both sides approved a short
declaration, the Luxembourg Compromise, which
maintained the principle of majority voting but acknowledged that "when very important issues are
at stake, discussions must be continued until unanimous agreement is reached."
Apparently the result was a draw; in fact it
represented a victory for de Gaulle. The Council
approved temporary funding for the CAP in May
1966. In the meantime, the Commission's ambitious proposals had been soundly defeated. Moreover, despite other member states' statement of
support for majority voting, the Luxembourg
Compromise impeded effective decisionmaking in
the Council for many years to come. General de
Gaulle's insistence on unanimity heightened the
member states' awareness of each other's special
interests and increased their reluctance to call a
vote in the Council even when no vital interest
was at stake.

EMS

See

EUROPEAN MONETARY SYSTEM.

EMU

See

EcONOMIC AND MONETARY UNION: POLmCAL

ISSUEs; ECONOMIC AND MONETARY UNION:

To-

WARD A SINGLE CURRENCY.

Energy Charter

Ruud Lubbers, prime minister of the Netherlands

and president of the European Council, proposed a
European Energy Charter in July 1991 to he1p the
Soviet Union develop its vast oil and natural gas
industries and to secure imports of Soviet energy
into Western Europe. Lubbers's initiative involved
a large international conference in The Hague, in
December 1991, followed by continuous negotiations in Brussels for a treaty to implement the
charter. By the time the treaty was signed by fifty
countries in Lisbon on December 17, 1994, the
initiative had lost much of its luster: the Soviet
Union had collapsed, and many of its successor
states lacked the political skills and legal capacity

1 63

to negotiate effectively; the United States distrusted the initiative, seeing it as a European effort
to edge the United States out of lucrative Eastern
European economic opportunities; and the EU had
large1y lost interest. Today, the energy charter is
more significant as a case study of indifferent international negotiation than as an instrument of
post-Cold War, pan-European economic development.

Energy Pollcy
Although the Treaty on European Union (TEU)
confirms that the sphere of activity of the EU encompasses the energy sector, it is nevertheless a
fact of political life that certain member states are
still not prepared to transfer important responsibilities as regards energy policy to the European
level. Moreover, in accordance with the principle
of subsidiarity established in the treaty, energy
policy must be largely regarded as the member
states' responsibility.
Nevertheless, energy policy in the EU has a
firm legal basis: coal is covered by the European
Coal and Steel Community (ECSC) treaty, particularly Artic1e 3 (general objectives) and Artic1es
57-64 (production and prices); nuclear energy is
covered by the European Atomic Energy Community (EURATOM) treaty, in particular Artic1es
40-76 (investment, joint undertakings, and supplies) and Articles 92-100 (the nuc1ear common
market); and overall energy policy and energy
policy in other fields are covered by the European
Economic Community (EEC) treaty, particularly
Artic1e 103(4) (supply difficulties) and Artic1e
235, and are implicit also in the Single European
Act (SEA).
Instead of aseparate energy chapter, the energy sector was simply incorporated in the TEU's
list of objectives (Artic1e 3t). Moreover, energy is
inc1uded under the TEU's "Environment" title
(Artic1e 130s [2]), which deals with the choice of
energy sources and the energy supply structure.
The TEU further mentions Trans-European Networks (transport, telecommunications, and energy
infrastructure) (Title xn, Articles 129b, c, and d
in connection with Artic1es 70 and BOa) to help
promote economic and social cohesion in the EU.
Policy Development
The EU's energy policy owes its origins to a postwar concentration, for political and economic rea-

164

Energy Policy

sons, on two supply technologies: coal and nuclear power. In the 1970s, in the aftermath of the
oil crisis, the need to reduce excessive dependence
on imported oil focused attention on energy policy. As a result, during the 1980s some limited
policy initiatives were taken in relation to renewable energy and energy effieiency.
Until the late 1970s there was fundamental
agreement on the Community's energy policy and
its objectives: nuclear energy was given special
importance as a future source of energy for the
EC, thereby making it independent of energy imports. The EURATOM treaty, which entered into
force in 1958 at the same time as the EEC treaty,
was intended to promote nuclear energy for this
purpose. Since the early 1980s, however, a consensus about nuclear energy no longer exists. The
treaties establishing the ECSC and EURATOM
were concluded under different political, soeial,
ecological, and economic conditions from those
that now prevail. Today there are differences of
opinion among the public, national governments,
and European institutions not only about nuclear
energy but also about other important energy issues. In the absence of agreement on energy policy, it is difficult for the EU to make strategie decisions in this field. The two most important issues,
nuclear safety and the greenhouse effect, have as
yet remained totally unsolved although it is precisely such transborder problems that are suitable
for action at the European level.
The objectives of the EU's energy policy are
currently under review. According to arecent
Commission white paper, An Energy Policy for
the European Union (COM[95] 682 final), energy
policy must form part of the general aims of the
EU's economic policy based on market integration, deregulation, limited intervention (based on
what is strictly necessary in order to safeguard the
public interest and welfare), sustainable development, consumer proteetion, and economic and soeial cohesion. However, beyond those general
aims energy policy must pursue goals that reconeile competitiveness, security of supplies, and proteetion of the environment. Overall, energy policy
must satisfy the EU's central concern for job creation and the quest for greater business efficiency,
on the one hand, and for environmental protection,
on the other.
In pursuing these aims, the EU cannot be unaware that its energy dependence will increase in
the near future and that the choices to be made as

regards protection of the environment in particular

may heighten that dependence. Nor may it disregard the fact that European integration involves
greater solidarity in the energy choices made by
each of the member states. Finally, it cannot forget
that the energy scene is marked by crises and by
changes in outlook that justify flexibility and
adaptation in defining and implementing an energy policy.
In view of these various constraints, the white
paper acknowledged that (1) market integration is
the central, determining factor in the EU's energy
policy; (2) concerns regarding competitiveness
and environmental protection require a balanced
approach in the medium or long term that is based
on internalization of costs; (3) the external dimension is generally the most important vehicle for
action, first of all because the EU's supplies come
mainly from outside producers and, above all, because the growth of consumption in nonmember
countries will be the main cause for concern in the
years ahead; and (4) security of supply will continue to be a constant concern of public authorities.
The white paper provided an indicative work
program for the Commission for the years ahead
that takes account of the limits of EU action for
reasons linked either to subsidiarity or to budgetary constraints. The white paper's recommendations do not go beyond the limits set out by the
present treaties and stay within the framework of
the budgetary forecasts. Therefore the Commission does not envision any transfer of powers or
any new budget spending. Implementation of the
program will pass through the EU's normal decisionmaking process via proposals and communications or new management approaches toward
existing machinery. However, since all action in
the energy sector must adapt to changing conditions, on the basis of a common perception of the
problems and their consequences, the work program will be monitored and adjusted every two
years as part of areport on energy that will enable
relevant institutions to provide an update on the
aims pursued.
Apart from general energy objectives, the
Commission has set several sectoral objectives:
maintaining the percentage of solid fuel (coal) in
total energy consumption figures, in particular by
making the relevant production capaeity more
competitive; increasing the ratio of natural gas in
the energy balance; establishing maximum safety

Energy Policy

conditions as aprerequisite for the planning, construction, and operation of nuclear power stations;
and increasing the share of renewable sources of
energy. Although the EU has achieved undeniable
successes in pursuing these objectives, the success
rate of the various member states in achieving
them is still very unequal.
Present Situation

The EU has already achieved a degree of success

in respect to its energy objectives (reduction of energy dependence, development of cmde oil substitutes, energy saving, and so on). Since 1975 the
Community has seen a considerable increase in
primary energy production, especially as a result
of increased oil production in the UK. Despite a
considerable increase in economic output, the rise
in gross domestic energy consumption in the EU
has been relatively slight. Also since 1975, the EC
has considerably reduced its energy dependence,
especially its dependence on cmde oil. However,
there are still considerable differences between
member states in respect to production and consumption, overall energy dependence, and the attainment of energy conservation objectives and
cmde oil substitution. There are also great differences between member states concerning the
share of individual energy sources in total consumption. This is attributable not only to stmctural differences between member states but also
to different national energy objectives (for exampIe, in respect to nuclear energy).
Sectoral aspects. The EU's energy policy objectives are to promote the use of coal and other
solid fuels and to malce domestic production capacity more competitive. There are now virtually
only three coal-producing countries left in the
EU-Britain, Germany, and Spain-because large
quantities of much cheaper coal are being imported from outside the EU. The correspondingly
large subsidies needed to maintain production in
Germany and Spain are meeting with increased resistance from buyers, consumers, and suppliers of
other sources of energy. The questions of whether
the EU should perrnit the continuation of coal subsidies in the long term (beyond the year 2(00) and
what level of production (ceiling) should be permitted for the coal-producing countries are currently a subject of controversy.
The EU's policy objective in regard to hydrocarbons is to substitute other forms of energy for
cmde oil. Community measures to encourage

165

prospecting (e.g., offs hore exploration) and exploitation of hydrocarbons (e.g., natural gas) are a
step in this direction. Security of supply is to be
encouraged by diversifying sources (member
states must keep stocks of the main petroleum
products corresponding to ninety days' consumption on the basis of the previous year's figures).
Nuclear energy is still accorded a key role in
the EU's energy policy objectives. However, since
the Chernobyl disaster in April 1986, the role of
nuclear energy has become highly controversial.
Abandonment of the nuclear option is at best a
medium-term prospect, but greater efforts must
undeniably be made to improve the safety standards of nuc1ear power stations.
The share of renewable sources of energy
(approximately 2 to 3 percent of total consumption) is to increase significantly.
Research, development, and demonstration
projects. The Community's research framework

program encompasses many energy-related projects in order to support the above-mentioned energy policy objectives. These projects are designed
to improve the acceptance level, competitiveness,
and scope of application of traditional energy
forms (e.g., reactor safety and management of radioactive waste produced by nuclear energy; gasification and liquefactin in the case of coal); encourage the development of new forms of energy
(alternative energy sources, nuc1ear fusion); and
promote energy saving and the rational use of energy.
The single market program. In the energy
sector, completion of the single market requires
the removal of numerous obstac1es and trade barriers, the approximation of tax and pricing policies, measures in respect to norms and standards,
and environmental and safety regulations. Following the directives adopted in 1990 and 1991 on
transit of electricity and gas, a further opening of
the electricity and gas networks for large industrial customers (third party access) remains highly
controversial.
The greenhouse effect and international cooperation. Because the EU has not yet been able

to achieve a consensus on energy policy, a number

of major decisions concerning the greenhouse effect and international cooperation are still outstanding. The EU has stressed its commitment,
particularly as regards international cooperation
and efforts to combat the greenhouse effect, to taking action itself. However, the highly controversial

1 66

Engrenage

1992 proposal for the introduction of a carbon

dioxide (C02) tax has not yet been irnplemented,
partly because of strong opposition by a number of
member states or industrial sectors involved and
partly because of lack of support from the EU's
main competitors (the United States and Japan) on
the international market. Participants at the UN
conference on climatic change, in April 1995, expressed particular regret at the EU's failure to take
action on the proposed CO 2 tax. Comprehensive
cooperation with the Central and Eastern European
countries that are undergoing radical change is also
under discussion, particularly in respect to energy
and environmental policy. The EU, with its financial resources and technical know-how, has a particular role to play in this context. The European
Energy Charter, which was finally signed in Lisbon on December 17,1994, after laborious negotiations, could provide a long-term basis for essential East-West cooperation in the energy sector.
See also ENVIRONMENTAL POLICY; EUROPEAN
ATOMIC ENERGY COMMUNITY; EUROPEAN COAL
AND STEEL COMMUNITY; RESEARCH AND TECHNOLOGICAL DEVELOPMENT POLICY.

Bibliography
Leydon, Kevin. 1996. European Energy Policy to 2020:
A Scenario Approach. Luxembourg: Office for Official Publications of the European Communities.
McGowan, Francis, ed. 1996. European Energy Policies
in aChanging Environment. Heidelberg: Physica
Verlag.
Walde, Thomas, ed. 1996. The Energy Charter Treaty:
An East- West Gateway for Investment and Trade.
London: Klewer.

-Peter Palinkas

Engrenage
A French word with no direct English translation,
engrenage loosely means "getting caught up in the
gears." It connotes the "Monnet method" of integration: individuals, interest groups, institutions,
and national governments, once involved in a specific course of action, find themselves having to
take additional, broader actions that unwittingly
deepen European integration.

Enlargement
The six founding members of the EC subscribed to
the principle written into the Rome treaty of March

25, 1957, that "any European State may apply to

become a member of the Comrnunity" (Article
237). This opened up the way to four successive
enlargements: Britain, Denmark, and Ireland
joined in 1973; Greece in 1981; and Spain and
Portugal in 1986. Austria, Finland, and Sweden
joined the newly launched EU in 1995, bringing
the membership to fifteen states. (See Table 5.)
Enlargement, however, has not come to a halt.
There is now ta1k of the possibility of a future EU
composed of 20, 24, 27, even 30 members. The fall
of the Berlin Wall and the disintegration of the Soviet Union radically changed the architecture of
Europe. Many claim that the EU's center of gravity
has moved well to the east of Brussels. German
chancellor Helmut Kohl, for example, declared in
an April 1994 speech that "the Baltic Sea is just as
much a European one as the Mediterranean." Ten
countries of Central and Eastern Europe have addressed membership applications to the EU: Hungary (March 31, 1994), Poland (April 5, 1994),
Romania (June 22, 1995), Slovakia (June 27,
1995), Latvia (October 13, 1995), Estonia (November 24, 1995), Lithuania (December 8, 1995),
Bulgaria (December 14, 1995), Czech Republic
(J anuary 17, 1996), and Slovenia, a republic of the
former Yugoslavia (June 10, 1996). In addition,
applications have been pending, though not necessarily active, from four other countries: Turkey
(April 14, 1987), Cyprus (July 3, 1990), Malta
(July 16, 1990), and Switzerland (May 20, 1992).
It is not unlikely that some of the other former Soviet Republics, Albania, and possibly some other
republics of the former Yugoslavia may also seek
membership in due course.
The original criterion for membership, "Europeanness," has been extended as a result of
changing circumstances in the European and international arenas, and also as a result of experiences derived from protracted negotiations with
applications in all previous enlargements (the first
enlargement took weH over ten years, the third almost ten). Although there have been no treatybased modifications in the membership criteria,
additions to the list of qualifications have been
based on two principal sources: Article 237, Paragraph 2, of the Rome treaty and Article 0, Paragraph 2, of the Treaty on European Union (TEU)
both lay down that "the conditions of admission
. .. shaH be the subject of an agreement between
the Member States and the applicant State." Since
1992, meetings ofthe European Council and inter-

Enlargement
Table 5

167

Ee/EU Member States, 1957-2000

Original Member
States (1957)
Belgium
France
Germany
Italy
Luxembourg
Netherlands

First Enlargement
(1973)

Second Enlargement

Third Enlargement

(1981)

(1986)

Britain
Denmark
Ireland

Greece

Spain
Portugal

govemmental conferences (IGCs) have, more or

less officially, added four more conditions. In addition to being European, astate must have a liberal democratic system in which the rule of law
and respect for human rights prevail; it must have
a market-based economy; and it must be prepared
to accept the acquis communautaire (rights and
obligations deriving from EU treaties, laws, and
regulations) as it exists at the time of accession; finally, although this is an implied condition, applicants must not pose major distributive or budgetary problems for the EU.
The procedures for enlargement are contained
in Article 0 of the TEU. The first requirement is
that the Council of Ministers consult the European
Commission, which issues an "opinion." (See Table
6.) This includes a detailed description of the political and economic situation in each applicant country, an evaluation of its capacity to adopt and implement the acquis in all areas of the EU's activity, an
indication of possible problems that may arise in
accession negotiations, and a recommendation concerning the opening of negotiations. An opinion
also provides an analysis of the applicant's current
situation and an assessment of the progress to be
expected before accession, bearing in mind changes
in the EU's acquis and the changing situation in the
applicant country. In the preparation of its opinion,
the Commission largely uses information provided
by the applicant countries thernselves.
The Commission's opinion on Thrkey's application was issued on December 20, 1989, but
because of severe political problems associated
with Thrkish membership there has been no forward movement despite a promise included in the
1964 association agreement with Turkey that it
would lead eventually to membership. Opinions
on Cyprus and Malta were issued on lune 30,
1993, and a commitment was made to move ahead
with negotiations no later than six months after
the conclusion of the 1996-1997 IGC. However,
as a result of a change in govemment in October

Fourth Enlargement
(1995)
Austria
Finland
Sweden

1996, Malta decided to put its application on the

back bumer. As far as Switzerland is concemed,
Swiss voters effectively rejected membership of
the EU when, in a referendum in December 1992,
they rejected membership of the European EconomicArea.
By far the biggest enlargement issue is that of
accession by the ten Central and Eastem European
states (CEES). Preparations for this eastem enlargement take place against a background of
widespread political and economic change
throughout Europe. There are enormous implications both for the CEES and the EU. The CEES
are looking for an anchorage in European political, economic, security, and defense organizations. They are diverse in size, wealth, and
progress in building market economies and
democracies. The average per capita GDP is only
about 30 percent of that of the EU, and the GDP
of the ten states combined is less than 5 percent of
the EU Fifteen. For its part, the EU must make decisions on the entry into the third phase of the
Economic and Monetary Union, it is engaged in
treaty revision, and it faces the expiration of existing financing arrangements in 1999. In addition, it
is attempting to define its Common Foreign and
Security Policy and is involved in the adaptation
of NATO and the Organization for Security and
Cooperation in Europe (OSCE) to the new conditions of the 199Os.
Since June 1993, an elaborate framework has
been developed to expedite the process of enlargement to include the CEES, and there has been a
marked widening and deepening of relations between the EU and most of the CEES. It was then
that the European Council, meeting in Copenhagen
in lune 1993, first established that those countries
that had signed Europe Agreements with the EU
could be eligible for membership. These agreements give the signatories associate status (meaning that they are potential EU members) and cover
both political and economic relations. The Madrid

168

Enlargement

Table 6

Chronology of Enlargement

Country

Applieation

UK

Aug. 9,1961
May 10,1967

Denmark

Aug. 10, 1961

May 11, 1967

Ireland

July 31,1961
May 11, 1967

Norway

July 21, 1967

Greeee
Spain
Portugal
Austria
Finland
Sweden
Czech Republie
Poland
Hungary
Romania
Slovenia
Estonia
Latvia
Lithuania
Bulgaria
Slovakia
Cyprus
Malta
Turkey
Switzerland

Nov. 25, 1992

June 12, 1975
July 28, 1977
Mar. 28,1977
July 17,1989
Mar. 18, 1992
July 1, 1991
Jan. 17, 1996
Apr. 5,1994
Mar. 31, 1994
June 22,1995
June 10, 1996
Nov. 28, 1995
Oet. 27,1995
Dee. 12, 1995
Dee. 16, 1995
June 27, 1995
July 4,1990
July 16, 1990
Apr. 14, 1987
May 20,1992

Comrnission
Opinion

Begin
Negotiations

Aeeession
Treaty

Sep. 10, 1961

Sep.29,1967
(revised
Oet. 1, 1969)
Sep. 10, 1961
Sep.29,1967
(revised
Oet. 1, 1969)
Sep. 10, 1961
Sep.29,1967
(revised
Oet. 1, 1969)
Sep.29,1967
(revised
Oet. 1, 1969)
Mar. 24,1993
Jan.26,1976
Nov.29, 1978
May 19, 1978
July 31, 1991
Nov.4,1992
July 31,1992
July 16, 1997
July 16, 1997
July 16, 1997
July 16, 1997
July 16, 1997
July 16, 1997
July 16, 1997
July 16, 1997
July 16, 1997
July 16, 1997
June 30,1993
June 30,1993
Dec. 20, 1989

Oet. 10,1961
June 30, 1970

Jan.22,1972

Oet. 26, 1961

June 30, 1970

Jan.22,1972

Oct. 2,1972

Jan. 1, 1973

Oct. 25, 1961

June 30, 1970

Jan.22,1972

May 10,1972

Jan. 1, 1973

June 30, 1970

Jan.22,1972

Sep.25,1972

Apr. 5,1993
July 27, 1976
Feb.5,1979
Oet. 17, 1978
Feb. 1, 1993
Feb. I, 1993
Feb. 1, 1993
Mar. 31,1998
Mar. 31, 1998
Mar. 31, 1998

June 24, 1994

May 24,1979
June 11, 1985
June 11, 1985
June 24,1994
June 24, 1994
June 24, 1994

Nov. 28, 1994

Referendum

Membership
Jan. 1, 1973

June 12, 1994

Oet. 16, 1994
Nov. 13, 1994

Jan.
Jan.
Jan.
Jan.
Jan.
Jan.

1, 1981
1, 1986
I, 1986
1, 1995
1, 1995
1, 1995

Mar. 31,1998
Mar. 31, 1998

Mar. 31, 1998

Note: Negotiations have not yet begun for the following eountries: Romania, Latvia, Lithuania, Bulgaria, and Slovakia.
The applieations of Malta, Turkey, and Switzerland are on hold.

European Council in December 1995 reiterated the

existing membership criteria and referred also to
the need "to create the conditions for the gradual
harmonious integration of the candidate countries
particularly through the development of the market
economy; the adjustment of their administrative
structures; and the creation of a stable economic
and monetary environment." The European Council asked the Commission to "make its evaluation
of the effects of enlargement on Community polieies [impact study]; to embark upon the preparation of a composite paper which will complement
the opinions and impact studies by providing an
overall approach to questions of enlargement; and
to submit a communication on the future finaneial

framework of the EU, having regard to the

prospect of enlargement, immediately after the
condusion of the IGC." It is quite dear, therefore,
that "there is scope for different interpretations of
many of these conditions, and it is not possible to
give a dear definition of an acceptable country....
It may also be the case that the Community's criteria may be interpreted more generously for some
applicants than others, with consequent political
implications" (Redmond, 1993, p. 210).
The Europe Agreements provide the legal
framework for the assoeiation between the applicant countries and the EU and establish a forum
for discussing progress in preparations for membership at a ministerial level in the assoeiation

Enlargement

councils, at a senior level in the association committees, and in joint parliamentary association
comrnittee meetings. The Essen European Council
in December 1994 went a step further by deciding
to establish a "comprehensive strategy" for
preparing those countries that have Europe Agreements for accession to the EU.
The comprehensive strategy inc1udes alignment of single market legislation, support by the
EU for transition from the EU's current program of
grant assistance (the Pologne et Hongrie: Actions
pour la Reconversion Economique [PHARE] program) to the CEES, and a "structured dialogue"
with all the CEES. The structured dialogue consists
of meetings of heads of state and govemment (once
a year) and ministerial meetings in the fie1ds of foreign affairs (twice a year); the internal market, finance, economic affairs, and agriculture (once a
year); justice and horne affairs (twice a year); and
transport, telecommunications, culture and education, research, and environment (once a year).
The Comrnission was asked to forward to the
Council a comprehensive package of communications (opinions, impact study, composite paper,
and report on the EU's future financial framework) on enlargement soon after the end of the
IGC in June 1997. The Comrnission did so in July
1997 when it produced its voluminous Agenda
2000 report, which endorsed the membership applications of Poland, Hungary, the Czech Republic, Estonia, and Slovenia (Comrnission, 1997). In
light of Agenda 2000 and the results of the IGe,
the European Council decided in December 1997
that the Czech Republic, Poland, Hungary, and
Slovenia would be inc1uded in the first phase of
the negotiations. The negotiations will be conducted by the Council presidency of the EU on behalf of the member states, with the assistance of
the Comrnission. It is up to the Comrnission to determine the bases for negotiation in each sector,
although bearing in mind the injunctions of the
Madrid European Council that the applicant countries should be treated on an equal basis.
Accordingly, accession negotiations will begin in early 1998. Previous negotiations have
taken anywhere from thirteen months for Austria,
Sweden, and Finland to seven years in the case of
Spain and Portugal. Much will depend on the
complexity of the issues to be resolved in each
case. Given the wide range of problems under
consideration, it is c1ear that some negotiations
will take longer than others. At the end of the ne-

169

gotiations with the different applicants, in accordance with Article 0 of the TEU, "the conditions
of admission and the adjustments to the Treaties
on which the Union is founded which such admission entails shall be the subject of an agreement
between the Member States and the applicant
state. This agreement shall be submitted for ratification by all the contracting states in accordance
with their respective constitutional requirements."
In light of all these requirements, the first accessions are not likely before the years following
2000.
According to Comrnission sources, the benefits of enlargement, when it occurs, should inc1ude
extending the zone of stability in Europe, thus
contributing to security and peace throughout the
continent; stimulating economic growth and providing new opportunities for business throughout
Europe by extending the single market from 370
million to 480 million consumers; giving the EU
greater weight in world affairs and making it a
stronger partner in international negotiations
(Comrnission, 1996). By the opposite token, there
will be heavy burdens, above all in the Common
Agricultural Policy and the structural funds, the
two largest components of EU spending, but there
has been no precise assessment of the costs to be
incurred. However, no matter what the cost, the
heads of state and govemment dec1ared unequivocally at the Madrid sumrnit in December 1995 that
"enlargement is both a political necessity and a
historic opportunity for Europe."
See also CENTRAL AND EASTERN EUROPEAN
STATES.

Bibliography

Commission. 1996. "Enlargement: Questions and Answers." Memo 96/78, July 30, 1996. Brussels:
Spokesman' s Service of the European Commission.
- - . 1997. Agenda 2000. COM(97)2000 Final. 2
vols. Luxembourg: Office for Official Publications
of the European Communities.
Michalski, Anna, and Helen Wallace. 1992. The European Community: The Challenge 01 Enlargement.
London: Royal Institute of International Affairs.
Murphy, Anna. 1996. "Enlargement and the Wider
Agenda of the European Union." ECPR News 7, no.
3 (Summer).
Redmond, John. 1993. "The Wider Europe: Extending
the Membership of the EC." In Alan Cafruny and
Glenda G. RosenthaI, eds., The Maastricht Debates
and Beyond. Vol. 2 of The State 01 the European
Community. Boulder: Lynne Rienner.

170

ENs

Redmond, lohn, and Glenda G. Rosenthal, eds. 1998.

The Expanding European Union: Past, Present, Future. Boulder: Lynne Rienner.

-Glenda G. Rosenthai

ENs
See

EUROPEAN STANDARDS COMMITTEE; REGULA-

TORY POLICY; STANDARDS AND CONFORMITY

As-

SESSMENT.

EnterprIse Pollcy
See

SMALL AND MEoIUM-SIZED ENTERPRISES.

Envlronmental Pollcy
Environmental policy, although officially accepted
as an area within the EC's policy competence in
1973, achieved much greater prominence during
the late 1980s and early 1990s than it had in the
earlier period of EU policymaking. Although the
EU's legislation is not equally important across a1l
issue areas, the EU is now a central actor in the
making of environmental policy in Western Europe. Furthermore, environmental standards as set
at the EU level are the key reference points for the
Central and Eastern European states (CEES) as
they plan for accession. Finally, the EU's participation in global environmental negotiations and
treaties-the Montreal protocol and the UN Conference on Environment and Development
(UNCED) in particular-has made its international positions on global environmental issues of
consequence to third parties all over the planet.

The Evolution of Environmental Policy

Environmental protection became a Community responsibility in 1972 when the heads of state and
government, meeting several months after the UN
Conference on the Human Environment (the Stockholm conference), decided that the Community
should act to protect the environment. Although
there was no specific legal basis for such a competence, the Community, acting under mIes of unanimity, enacted far-reaching legislation to combat
pollution. Between 1973 and 1987, roughly twenty
important pieces of legislation were approved.
These were not necessarily connected to trade or to
transborder pollution. In the case of legislation reg-

ulating the quality of surface water from which

drinking water was to be drawn, for instance, the
Community's action was more far reaching than
national legislation and covered national waters as
well as waters crossing national frontiers.
A directorate-general (DG XI) for environmental policy was created in the Commission in
1981. Although it has remained relatively small
compared to those concerned with economic and
internal market activities, DG XI represents an institutional acknowledgment of the growing importance of environmental protection within the
Community's policy portfolio. It has also provided the main channel for environmental groups
trying to pressure the Commission toward
"greener" proposals, with the result that it has often been treated with suspicion by those within the
Commission concerned with economic development and market liberalization. Given the breadth
and crosscutting nature of environmental issues,
several powerful DGs other than DG XI are also
involved in this policy arena. Generally, the shape
of a proposal is significantly affected by the identity of the DG that seizes control of the policy
agenda. In particular, the directorates-general concerned with the internal market, agriculture, transport, and energy are often irnportant in influencing
Commission proposals.
The Single European Act (SEA) represented
a significant step in the institution-building
process that has characterized the arena of environmental protection. Most irnportant, it gave the
Community an explicit legal basis upon which to
operate. It also divided decisionmaking procedures into two categories. Those measures linked
to the creation of an internal market were to be decided by qualified majority voting in the Council
of Ministers, whereas those designed to protect
the environment as such required unanirnity. The
European Parliament (EP) had a greater role to
play in the former case than in the latter, as the use
of qualified majority voting in the Council triggered the cooperation procedure in the EP.
In May 1990, the Council approved a regulation (1210/90) establishing the European Environment Agency (EEA) and the European Environment Information and Observation Network.
Although the Council did not accept the EP's position that the new agency should be able to carry
out inspections in the member states, it did leave
open the possibility of future discussion of that

Environmental Policy
option. What the Council did not do in 1990, however, was to decide on the city in which the EEA
should be located. Finally, at the Brussels summit
of October 1993, Copenhagen was chosen as the
seat of the new environmental agency, which,
along with the Environment Information and Observation Network, "is intended to provide the
Community and the Member States with objective, reliable and comparable information at European level enabling them to take the requisite
measures to protect the environment" (Johnson
and Corcelle, 1995, p. 364). In other words, it is to
provide comparable data rather than to enforce EU
environmentallegislation.
The Treaty on European Union (TEU) extended qualified majority voting and the role of
the EP in environmental policymaking. However,
the concept of "subsidiarity," enshrined in the
treaty, led to political conflicts over whether environmental legislation had become too intrusive.
The fact that some environmental restrictions
were related neither to transboundary pollution
nor to market distortions was particularly criticized (Golub, 1996). Although some member
states, Britain and France in particular, tried to obtain the roll-back of legislation feit to be overly
stringent, that attempt was defeated. The Commission did agree, however, to simplify environmental legislation. Finally, the Amsterdam Treaty enshrined the principle of sustainable development
as a core EU value.
The Po/itics of Environmental Policymaking
The extent of EU involvement in European environmental policymaking is so extensive that some
observers have argued that this policy arena has
very strong "federal" features. Clearly, as Nigel
Haigh has written, "it cannot be repeated too often
that it is impossible to understand the environmental policy of any of the EC Member States without
understanding EC environmental policy" (Haigh,
1992, preface). Neither has EU jurisdiction limited
itself to those areas that are c1early transboundary
or affect international trade. EU environmental
policy has addressed areas such as bathing water
and urban wastewater, for example. How has the
EU become so involved and so important?
Although some countries have had some environmental protection laws, the field of "environmental policy" as we now think of it is very new.
The countries that have become most active in

171

defining the substance and parameters of this new

policy field have emerged as the policy leaders in
many forums, inc1uding the EU. EU-level policymaking in the environmental arena is often driven
by the activities of those leaders. A small number
of member states approve significant new environmental protection laws while the rest of the member states do not (Sbragia, 1996). In particular,
Germany, the Netherlands, and Denmark-the socalled green members or green troika-are the established policy leaders; the newest membersSweden, Finland, and Austria-are expected to
emerge as policy leaders as well. Countries such
as Greece, Italy, Spain, Portugal, Ireland, and Belgium typically pass legislation only after it has
been agreed to in Brussels. In fact, it is the EU's
policymaking process that engages the "laggards."
Typically, an environmentally progressive member state passes national legislation that is viewed
either as a threat to the internal market or as damaging to the competitiveness of an industry. The
affected industry therefore wants to externalize
the cost of the new regulation by imposing it on its
European competitors. Alternatively, there may be
an environmental problem (such as urban wastewater) that the green member states think should
be treated uniformly throughout the EU.
Although the green members are often the
catalysts for action by Brussels, environmental
policy is segmented into sectoral policy, and political dynamics therefore vary considerably across
sectors. No member state is the leader in all environmental sectors at all times. Therefore, states
outside the "green troika" act as leaders in certain
areas. For example, directive 76/464 (dealing with
dangerous substances in water) was prompted by
Belgium. Directive 75/440 (concerning the quality
of surface water intended for the extraction of
drinking water) was stimulated by proposed
French regulation. In 1983 the British Royal Commission on Environmental Pollution called for
lead-free gasoline in Britain and called on the govemment to lead a European initiative to phase out
the use of lead in gasoline altogether.
The small "green" states can trigger important
policy waves. Both the Danes and the Dutch introduced carbon dioxide taxes at the national level,
thus causing the Commiss.ion to worry that such
taxes would distort the single market. In response,
the Commission acted as a "policy entrepreneur" to
place the carbon dioxide tax on the EU's agenda

172

Environmental Policy

before the Rio earth summit in 1992. Although for a

variety of reasons, inc1uding U.S. opposition, the
carbon dioxide tax was not adopted, interests opposed to the tax have not been able to remove it
from the policy agenda altogether (Zito, 1995).
Notwithstanding the important role of other
states, Germany plays a pivotal role in putting environmental issues (especially those concerning
air pollution) on Brussels's policy agenda. In the
1970s, Germany was not a pacesetter when it
came to environmental protection (Weale, 1992a).
But the German context changed dramatically in
the early 1980s, when Germans realized that their
forests were dying because of acid rain. As a result, Germany emerged as a "green" state (Weale,
1992b). By late 1982, German govemment policy
was committed to a far-reaching set of environmental goals. The Green Party, founded in 1980
and present in the Bundestag since 1983, maintained pressure on the governing coalition. One of
Germany's key policy goals was to have the EU
introduce more stringent environmental measures,
partially to protect German industry from the
competitive effects of more stringent German regulations (Boehrner-Christiansen and Skea, 1991).
German influence has been particularly pronounced in the area of air pollution legislation.
Once an environmental issue has made it to
the EU's agenda, the institutional dynamics of the
EU's policymaking system take over. The Commission typically tries to draft a directive that is
less restrictive than the most restrictive national
laws while more restrictive than the laws of the
"laggard" states. EU environmental legislation
thus has often ratcheted environmental proteetion
upward in many of the member states (Kramer,
1992; Sbragia, 1996) but at the same time has
been criticized by many in the "green" states as
not progressive enough. In the last enlargement
negotiations, the environmentally conscious applicants (Sweden, Finland, and Austria) carried on
very difficult negotiations concerning their environmental laws, which were often more, and
sometimes far more, stringent than the analogous
EU legislation and furthermore introduced protection in areas where the EU did not (Johnson and
Corcelle, 1995, pp. 10--11).
In particular, the so-called periphery has been
pressured to raise environmental standards. The
Mediterranean states of Greece, Italy, Spain, and
Portugal have typically given environmental protection low priority (La Spina and Sciortino,

1993). The desire for rapid economic development,

and in Spain the concern with high unemployment,
have made it difficult for ideas of sustainable development to make headway. However, in the
1990s Italy began to move in the direction of a
more active proenvironmental stance, primarily because of the commitrnent and persistence of individual ministers. The fact that Italy, particularly
northern Italy, is now far wealthier than the rest of
the periphery may be favoring such a stance.
Spain, however, has retained a far more skeptical
position, blocking the further extension of qualified majority voting in some areas of environmental policy in the negotiations leading to the TEU.
The European Court of Justice (ECJ), for its
part, has played an important role in the incOlporation of environmental policy in the EU's jurisdiction. In the 1970s, it ruled that the Community could
act in that area even though no mention of environmental protection was made by the Treaty of Rome.
Its pronouncements were so strong in this area, in
spite of the lack of an explicit legal basis, that environmental policy has been viewed as one of the areas in which the "judicial activism of the Court" has
been particularly striking (Koppen, 1993, p. 136).
Given the role of the ECJ in promoting free
trade within the Community, it has played a critical role in delineating the degree to which environmental policy can restrict free trade. In recognizing exceptions to Dassonville, the key case
calling for the removal of nontariff barriers, environmental protection has been typically treated as
an appropriate exception. The Court's decisions
have generally supported environmental protection but insisted that, when choosing among policy alternatives, govemments choose those mechanisms of protection least restrictive of trade.
Implementation
In the 1990s, the issue of enforcement of EU environmentallegislation has become more prominent.
Given the institutional structure of the EU, administrative implementation is the responsibility of the
member states. Although the Commission can
monitor the transposition of EU legislation into national law, it can do very little to monitor directly
the extent to which such legislation is actually executed on the ground. It relies primarilyon individual citizens and nongovemmental groups to bring
noncompliance to its attention. Such noncompliance can then be prosecuted through the ECJ, but
the standards of evidence demanded require that

Environmental Policy

citizens and environmental groups in the member

states provide the data that will allow the Commission to make a persuasive case to the Court. Given
the relatively weak organizational capacity of environmental groups in many of the member states
(see, for example, Diani, 1995; Prendiville, 1994),
such a system for monitoring enforcement leaves
huge gaps. Although the Commission is exploring
the establishment of networks among enforcement
agencies and creating partnerships with other actors, it is clear that enforcement of EU environmental legislation will be problematic in many of
the member states for a long time to come.
Internationallnvolvement

The EU has become active at the international and

global arena in a wide variety of forums and in a
wide variety of issue arenas. Its competence to act
in the international arena is rooted in the ERTA decision by the ECJ, adecision that essentially
granted the Community external competence in an
area once EU legislation had been approved in
that area (Koppen, 1993). The EC is a signatory to
a large number of international conventions, many
of them addressing environmental problems in
Europe. For example, the EC is a signatory to the
Paris convention (Convention for the Prevention
of Marine Pollution from Land-based Sources,
signed in July 1974) covering pollution in the
northeast Atlantic (Haas, 1993).
Throughout the 1990s, the European Council
gave environmental protection an increasing
amount of attention. The international role of the
EU in this sector began to be highlighted. At the
Dublin summit of June 1990, the European Council issued The Environmental Imperative, a declaration that specifically focused on the external environmental role of the Community. In the words
of the declaration, the Community had "a special
responsibility to protect and enhance the natural
environment not just of the Community itself but
of the world of which it is apart." The declaration
called on the Community to take a leading role in
global environmental affairs.
In fact, the Community had begun to be
viewed as an important actor at the global level
since the mid-1980s. In the negotiations over the
regulation of chlorofluorocarbons, the Community became an important actor in the ozone arena.
It became a signatory to the major treaty (the Vienna convention) and the ensuing protocol (the
Montreal protocol) and acted as a leader in the

1 73

formulation of subsequent amendments to that

protocol. In the case of climate change and environment and development, addressed during the
Rio summit in 1992, the Community, represented
by both the Commission and the Council presidency, again played an irnportant role.
EU access to the global arena has not been
easy. Even at the regional level, the Community
has not always been perrnitted to become a signatory to environmental treaties. For example, Sweden and the USSR prevented the Community from
signing the Helsinki convention (Convention on
the Protection of the Marine Environment of the
Baltic Sea Area) in 1974 (Haas, 1993). At the
global level, the United States has often been
skeptical of the ability of the Community qua
Community to ensure compliance by its member
states. It has therefore often resisted demands by
the Community to be granted an independent international status. The compromise agreed to by
both sides has typically been that the Community
would sign a convention but so would the member
states (Sbragia, 1998). Such agreements are therefore known as "mixed agreements."
Conclusion

Environmental policy has gradually become increasingly important within the EU's policy portfolio. It has also come to shape and orient the environmental policy of the member states, with
many of them implementing only that level of environmental protection agreed to in Brussels. At
the global level, environmental protection has permitted the EU gradually to carve out an international profile for itself.
See also EUROPEAN ENVIRONMENT AGENCY.
Bibliography
Boehrner-Christiansen, Sonja, and Jirn Skea. 1991. Acid
Politics: Environmental and Energy Policies in
Britain and Germany. London: Belhaven.
Diani, Mario. 1995. Green Networks: A Structural
Analysis of the Italian Environmental Movement.
Edinburgh: Edinburgh University Press.
Golub, Jonathan. 1996. Sovereignty and Subsidiarity in
EU Environmental Policy. EUI Working Paper RSC
No. 96/2. Florenee: European University Institute.
Haas, Peter M. 1993. "Proteeting the Baltie and North
Seas." In Peter M. Haas, Robert O. Keohane, and
Mare A. Levy, eds. Institutions for the Earth:
Sources of Effective International Environmental
Protection. pp. 133-182. Carnbridge: MIT Press.
Haigh, Nigel. 1992. Manual of Environmental Policy:
The EC and Britain. Essex: Longrnan.

174

EP

Johnson, Stanley P., and Guy Corcelle. 1995. The Environmental Policy 01 the European Communities. 2d
ed. London: Kluwer.
Koppen, Ida J. 1993. 'The Role of the European Court
of Justice." In J. D. Liefferink, P. D. Lowe, and A.P.J.
Mol, eds., European Integration and Environmental
Poliey, pp. 126-149. NewYork: Belhaven.
Kramer, Ludwig. 1992. Foeus on European Environmental Law. London: Sweet and Maxwell.
La Spina, Antonio, and Giuseppe Sciortino. 1993.
"Common Agenda, Southem Rules: European Integration and Environmental Change in the Mediterranean States." In J. D. Liefferink, P. D. Lowe, and
A.P.J. Mol, eds., European Integration and Environmental Poliey, pp. 217-236. New York: Belhaven.
Prendiville, Brendan. 1994. Environmental Polities in
Franee. Boulder: Westview.
Sbragia, Alberta. 1996. 'The Push-Pull of Environmental Policy-Making." In Helen Wallace and William
Wallace, eds., Policy-Making in the European
Union. 3d ed. Oxford: Oxford University Press.
- - - . 1998. 'The European Union and Compliance:
A Story in the Making." In Edith Brown Weiss and
Harold K. Jacobson, eds., Engaging Countries:
Strengthening Complianee with International Environmental Aeeords. Cambridge: MIT Press.
Weale, Albert. 1992a. The New Polities 01 Pollution.
Manchester: Manchester University Press ..
- - - . 1992b. "Vorsprung durch Technik? The Politics
of German Environmental Regulation." In Kenneth
Dyson, ed., The Polities 01 German Regulation.
Brookfield, VT: Dartmouth.
Zito, Anthony R. 1995. "Integrating the Environment
into the European Union: The History of the Controversial Carbon Tax." In Carolyn Rhodes and Sonia
Mazey, eds., Building a European Polity? Vol. 3 of
The State 01 the European Union. Boulder: Lynne
Rienner.

-Alberta Sbragia

ERASMUS

See

EUROPEAN COMMUNITY ACTION SCHEME FOR

THE MOBILITY OF UNIVERSITY STUDENTS.

ERDF
See EUROPEAN REGIONAL DEVELOPMENT FuND.

ERM
See EXCHANGE RATE MECHANISM.

ERM 11
See EXCHANGE RATE MECHANISM 11.

ERT
See EUROPEAN ROUND TABLE OF INDUSTRIALISTS.

ESA
See

EUROPEAN SPACE AGENCY; EUROPEAN SUR-

VEILLANCE AUTHORITY.

ESC

See EcONOMIC AND SOCIAL COMMITTEE.

ESCB
See EUROPEAN SYSTEM OF CENTRAL BANKS.

ESDI

See EUROPEAN SECURITY AND DEFENSE IDENTITY.

ESF

EP

See EUROPEAN SOCIAL FUND.

EPC

See

See EUROPEAN POLmCAL COOPERATION.

AND DEVELOPMENT IN INFORMATION TECHNOLOGY.

See EUROPEAN PARLIAMENT.

ESPRIT
EUROPEAN STRATEGIC PROGRAM FOR REsEARCH

EPP

Estonla

See EUROPEAN PEOPLE'S PARTY.

See BALTIC

EPU

ETSI

See

See

EUROPEAN PAYMENTS UNION; EUROPEAN Po-

LmCAL UNION.

STATES.

EUROPEAN TELECOMMUNICATIONS STANDARDS

INSTITUTE.

Euro-Mediterranean Partnership

ETUC
See EUROPEAN TRAnE UNION CONFEDERATION.

EU
See EUROPEAN UNION.

EUI

175

cords between Israel and Egypt (which resulted in

Egypt's exelusion from the Arab League). EAD resumed briefly in 1981 and again in 1989-1990 but
collapsed in the wake of the 1991 Gulf War.

Eurochambers
See EUROPEAN ASSOCIATION OF CHAMBERS OF
COMMERCE AND INDUSTRY.

See EUROPEAN UNIVERSITY INSTITUTE.

EURATOM
See EUROPEAN ATMIC ENERGY COMMUNlTY.

EUREKA
See EUROPEAN RESEARCH COORDINATION AGENCY.

EURES
See EUROPEAN EMPLOYMENT SERVICES.

Euro
At the Madrid summit in December 1995, the European Council decided that the new currency, due
to be used in daily transactions on January 1,
2002, at the latest, will be called the euro. The exchange of national notes and coins for the euro
will be completed no later than July 1, 2002. One
euro will equal one ecu.

Euro-Arab Dlalogue (EAD)

The Euro-Arab dialogue (EAD) was a diplomatic
initiative launched in the mid-I970s by the Commission and the member states (through the foreign
policy coordination mechanism of European Political Cooperation) and the twenty countries of the
Arab League. At the first meeting, held on July 31,
1974, it was agreed that a Euro-Arab General Commission and a number of working parties would be
set up. The EAD never had much potential, however, because the two sides had a fundamentally
different perception of the procedure's nature and
future: the European side refused to taelde overt political issues, such as Palestinian representation,
and the Arab side was not eager to give specific assurances regarding the supply of oil to European
countries. The EAD reached a stalemate in 1978,
after the historic U.S.-brokered Camp David ac-

Eurocorps
Originating in November 1993 as a Franco-German
military brigade, the fifty thousand-strong Eurocorps "rapid reaction force" now consists also of
units from Belgium, Luxembourg, and Spain (Eurocorps' command rotates every two years among
participating countries). Some see the Eurocorps,
which is based in Baden Wurttenberg and became
fully operational in 1995, as the nueleus of a future
European army. More realistically, the Eurocorps
symbolizes elose Franco-German military cooperation and a quest by some EU member states for a
European security and defense identity.

EURODAC
EURODAC is a proposed computerized fingerprint
recognition system for EU asylum seekers. The system would help implement the Dublin convention
(1990), an agreement among EU member states to
prevent multiple asylum applications. EU justice
ministers took the first step toward setting up
EURODAC in 1994, when they allocated funds for
a feasibility study of fingerprinting at external borders. The proposed system is controversial because
it could violate privacy laws, give the impression
that asylum seekers are suspected criminals, and be
seen to impose a new barrier between the EU and
the Central and Eastern European states.

Euro-Medlterranean
Partnership
Launched by the EU and the so-called MED 12
(Algeria, Cyprus, Egypt, Israel, Jordan, Lebanon,
Malta, Morocco, Syria, Tunisia, Turkey, and the
Autonomous Palestinian territories) at a conference in Barcelona on November 28, 1995, the
Euro-Mediterranean partnership seeks to promote
security and sustainable development in the
Mediterranean region. As part of the new partner-

176

EUROPA

ship, the eontraeting states pledged themse1ves to

establish a Mediterranean Free Trade Area by
2010 and to link it through the EU to another free
trade zone with the eountries of Central and Eastern Europe. The partnership is the eenterpieee of
the EU's Mediterranean poliey.
See also MEDITERRANEAN POLICY.

EUROPA
The Commission makes a large amount of information on the EU's history, polieies, and institutions available through the EUROPA server
(http://europa.eu.int), whieh it launehed on the Internet in 1995. EUROPA handles some two million "hits" (aeeesses) per month.

Europe Agreements
Europe Agreements are association agreements between the EU and the Central and Eastern European states (CEES). The EU generally negotiates
association agreements with neighboring eountries
to develop elose eeonomie and politieal relations,
but it designated Europe Agreements as a eut
above regular association agreements in order to
demonstrate its eommitment to the CEES's diffieult eeonomic and political transition and acknowledge the CEES's desire to join the EU. Europe Agreements superseded technical eooperation
agreements negotiated between the EC and the
CEES as the Cold War came to an end.
On December 16, 1991, the EC signed the first
Europe Agreements with Poland, Hungary, and
Czechoslovakia (the agreement with Czechoslovakia never went into effect owing to the breakup of
the country, but agreements with Slovakia and the
Czech Republic were signed on Oetober 4, 1993).
The agreements ineluded provisions for foreign
policy coordination and cultural exchange as weIl
as economic cooperation. Although they did not
contain explicit commitments to EU membership,
the agreements noted the CEES's aspiration to accede, an aspiration that implicitly governs their operative provisions. Europe Agreements were later
signed with Romania (February 1, 1993), Bulgaria
(March 8, 1993), and the Baltic states (June 12,
1995), and a draft agreement was initialed with
Slovenia on June 15, 1996. The Europe Agreements establish the usual bilateral association institutions: an association council, an association
committee, and a parliamentary committee.

The Commission negotiated the Europe

Agreements under Artiele 238 of the Treaty of
Rome, which gives the EU the right to establish
with nonmember states "association involving reciprocal rights and obligations, common action and
special procedures." However, as mixed agreements covering areas of both EU and national eompetence, Europe Agreements were signed by the
EU and its member states and required the approval
of the Council of Ministers, the European Parliament (EP), member states' parliaments, and the parliament of the assoeiated eountry before entering
into force. As a result, there were long delays before the agreements became operational. In order to
facilitate trade and investment during this lengthy
ratification process, the Commission coneluded interim agreements covering trade liberalization and
other areas of exelusive EU competenee.
See also CENTRAL AND EASTERN EUROPEAN
STATES.

European Agency for the

Evaluation of Medlclnal
Products (EMEA)
As part of the single market program, in its 1985
white paper the Commission proposed a number
of directives to unify the highly fragmented pharmaeeutical seetor. The relevant direetives addressed such questions as common testing rules,
price transparency, patient information, advertising, and above all , a move toward a centralized
system for granting marketing approvals for new
drugs. The Commission envisioned a system
based on a European-level agency that would
eventually take responsibility for all new drug approvals, backed by a host of new harmonizing directives laying down common procedures for testing and approval and ensuring free movement for
human and veterinary medicines.
Although the bulk of the work on common
testing rules, residue limits, and the like had been
completed by the end of 1990, debate continued
over the status and function of the proposed new
agency. On the basis of the catch-all Artiele 235 of
the Rome treaty, member states finally decided in
1992 to establish a European Agency for the Evaluation of Medicinal Products (EMEA) but with a
far more limited function (at least initially) than
originally planned. Composed of a secretariat and
two existing committees of member-state representatives (the Committee for Proprietary Medici-

European Atomic Energy Community (EURATOM)

nal Products and the Committee for Veterinary

Medicinal Products), the new agency would be responsible for approving all medicines based on
biotechnology and all veterinary medicines likely
to improve the productivity of farm animals (this
peculiar list resulted from a previous debate over
the safety of biotechnology generally and over the
possible approval of BST, which improves milk
yields of dairy cows). Manufacturers of "innovative" medicines would have the option of applying
to the EMEA for centralized approval, which
would be valid in all member states. Manufacturers of other types of drugs would have to submit
them for member-state approval, subject to mutual
recognition and with binding arbitration at the
EMEA in case of disputes.
The EMEA began operating in January 1995
from its headquarters in London's Docklands, in
consultation with a network of two thousand experts from academia and national regulatory bodies. Despite some manufacturers' fears that political considerations would remain an essential part
of the regulatory process (national govemments
have considerable control over the new agency),
the EMEA got off to a good start and quickly established a system under which national authorization recognized by it would be accepted by all
member states. Harmonization and consolidation
sped up the approval process, and companies are
able to request specific advice from the EMEA at
any time during product development.
See also SINGLE MARKET PROGRAM.

European Agrlcultural
Guldance and Guarantee
Fund (EAGGF)
In April 1962 the Council of Ministers established
the European Agricultural Guidance and Guarantee Fund (EAGGF) to finance the Common Agricultural Policy (CAP), which, apart from a mechanism for market intervention, inc\uded a
socioeconomic policy intended to improve basic
structural conditions in European agriculture.
Thus, the EAGGF consists of two sections: a
guarantee section for expenditure arising out of
the market and prices policy (this accounts for the
lion's share of CAP expenditure and covers the
cost of the minimum guaranteed price and exports
refunds) and a guidance section to cover expenditure arising from the structural policy
See also COMMON AGRICULTURAL POLICY.

177

European Assoclatlon of
Chambers of Commerce and
Industry (Eurochambers)
The European Association of Chambers of Commerce and Industry (Eurochambers) represents
twelve hundred chambers of commerce and industry in thirty-two countries, with around fourteen
million member companies, mostly small and
medium-sized enterprises (SMEs). As part of the
Pologne et Hongrie: Actions pour la Reconversion
Economique (PHARE) prograrn, the Comrnission
funds Eurochambers to organize managerial training for SMEs in Central and Eastem Europe.

European Atomlc Energy

Communlty (EURATOM)
The European Atomic Energy Community
(EURATOM) came into existence simultaneously
with the European Economic Community on January 1, 1958. Moreover, the treaties establishing
both Communities were signed together in Rome
on March 25, 1957. Jean Monnet first proposed an
organization, along the lines of the successful European Coal and Steel Community (ECSC), to
promote the peaceful use of atomic energy and, at
the same time, further the cause of European integration. Even while the ECSC treaty was being
negotiated, Monnet knew that coal was rapidly
losing its position as the basis of industrial power
and, by extension, military might. Atomic energy
had already revolutionized strategic doctrine and
seemed poised to replace coal and oil as the main
energy source of the future. Thus Monnet proposed a European Atomic Energy Community in
order both to achieve the immediate objectives of
the ECSC itself and to promote the distant goal of
European federation.
The French govemment was weIl disposed
toward EURATOM, which offered an opportunity
to share the exorbitant costs of atomic energy research and development while enjoying all the
benefits. U.S. president Dwight Eisenhower's recent Atoms for Peace initiative had increased
EURATOM's attraction. Not only was the United
States willing to share nuc\ear technology for
peaceful purposes, but also the State Department
recognized the importance of Monnet's initiative
for the European integration movement. Notwithstanding U.S. support, other ECSC member states
disliked the EURATOM idea, not least because
they distrusted French motives.

1 78

European Bank for Reconstruction and Development (EBRD)

In November 1954 Monnet announced his

decision to resign from the High Authority of the
ECSC, in part to promote EURATOM. He did so
by establishing an elite interest group of political
party and trade union leaders: the Action Committee for the United States of Europe. Although the
Action Committee became a highly visible and
successfullobby for further European integration,
it failed to advance the EURATOM idea over a
contemporaneous proposal to establish a common
market among the six ECSC member states. The
1956-1957 intergovernmental conference (lGC)
to draft plans for further European integration focused on the common market proposal. Yet a report by Paul-Henri Spaak, which laid the basis for
the IGC's outcome, proposed that the two objectives of sectoral integration (atornic energy) and
wider econornic integration (a common market)
be realized in separate organizations, with separate treaties. The IGC culrninated in the signing of
the Treaties of Rome in March 1957, establishing
the European Atornic Energy Community and the
European Econornic Community (EEC).
From the outset EURATOM was a poor relation to the EEC. When the EURATOM institutions merged with those of the EEC and the ECSC
in 1967, EURATOM virtually lost its own identity. Moreover, the other member states' suspicion
of France's nuc1ear policy, an abundance of cheap
imported oil in the 1960s, and-despite the oil crisis in the 1970s-growing environmental and
safety concerns about atornic energy resulted in
EURATOM's marginalization.

European Bank for

Reconstructlon and
Development (EBRD)
The European Bank for Reconstruction and Development (EBRD) is the only international financial institution that has a specific brief to help the
Central and Eastern European states make the
transition to market econornics. The EBRD originated in a call by French president Fran90is Mitterrand in October 1989 to promote reform in
Central and Eastern Europe (inc1uding the Soviet
Union) by establishing a regional investment
bank. In December 1989 the European Council,
meeting in Strasbourg, endorsed Mitterrand's proposal. Although initially France wanted to confine
membership to the EC and its member states, the

European Council agreed that other Western countries, notably the United States, should be invited
to participate. Negotiations opened in Paris in January 1990 and ended five months later with an
agreement to establish the EBRD. The agreement
stipulated that the bank's emphasis would be on
helping eligible countries with private-sector development and transition to free market economics, privatization, reform of the financial sector,
stimulation of direct investment, and environmental rehabilitation. Membership in the bank was
open to European countries, to non-European
countries that are members of the International
Monetary Fund, to the EC, and the European Investment Bank. The bank now has fifty-nine
shareholders, inc1uding the EU and its member
states.
The EBRD began operations in April 1991, in
London. In deference to France, Jacques Attali, one
of Mitterrand's dosest friends and advisers, was
appointed its first president. Attali was a colorful
and controversial character whose avowed antiAmericanism exacerbated tension between the EC
and the United States (the largest single shareholder, although collectively the EU and its member states have far more shares). Attali's undoing,
however, was aseries of revelations in the Financial Times newspaper in 1993 about waste and mismanagement in the EBRD's headquarters. In June
1993 Attali resigned. He was replaced six months
later by Jacques de Larosiere, a former French central bank governor. Under de Larosiere's leadership, the bank regained its credibility, doubled its
capital, and began to reap the first substantial gains
from its portfolio of equity investment in Central
and Eastern Europe.
See also CENTRAL AND EASTERN EUROPEAN
STATES.

European Center for Industrial

Relations (ECIR)
The European Center for Industrial Relations
(ECIR) promotes harmonious industrial relations
by running educational programs for employers
and trade unionists and by providing information
on the structure and operation of employer and
trade union organizations and on EU econornic
and social policies. Part of the EU-funded European University Institute in Florence, the center
was launched in October 1995.

Europeon Cool and Steel Community (ECSC)

European Center for

Infrastructure Studies (ECIS)
Founded in March 1994 by the European Round
Table of Industrialists, the European Center for Infrastructure Studies (ECIS) is a smalI, nonprofit
think tank, supported entirely by membership subscriptions and research contracts, that encourages
the development of infrastructure networks by
providing analysis and information. Fran~ois
Xavier Ortoli, a former Commission president,
was elected the first president of ECIS, which is
located in Brussels.

European Center for the

Development of Vocational
Training (CEDEFOP)
The European Center for the Development of Vocational Training (CEDEFOP) is an independent
agency, funded by the Commission, to analyze the
impact at the European level of new forms of
work organization and training programs. Established in 1975, CEDEFOP was located in Berlin
until it was moved to Thessaloniki in 1994 as a result of a reshuffle of European institution and
agency locations (making it the first European institution or agency to be located in Greece).

European Central Bank (ECB)

The European Central Bank will come into operation at the beginning of Stage 3 of the plan outlined in the Treaty on European Union to achieve
Economic and Monetary Union (EMU). The ECB
will be an independent body with exclusive responsibility for the formulation and implementation of the EU's single monetary policy. An executive board of six individuals, appointed by the
European Council for a nonrenewable term of
eight years, will run the ECB's day-to-day operations. Together with the govemors of the national
central banks, the Executive Board will constitute
the Goveming Council, the chief policymaking
body of the ECB. The ECB will be located in
Frankfurt, where its forerunner, the European
Monetary Institute, is currently located.

See also

ECONOMIC AND MONETARY UNION:

POLITICAL ISSUES; ECONOMIC AND MONETARY

UNION: TOWARD A SINGLE CURRENCY.

1 79

European City of Culture

The Council of Ministers' annual designation of a
European City ofCulture is one ofthe best-known
actions in the developing area of EU cultural policy. The program began in 1985 and is temporarily
included in the EU's KALEIDOSCOPE program
for general cultural events (1996-2000). Designated cities include Stockholm (1998), Weimar
(1999), and Kracow (2000).

See also CULTURAL POLICY.

European Coal and Steel

Community (ECSC)
The initialing of the Treaty of Paris on April 15,
1951, marked the first great step toward the economic and political integration of Europe. Once ratified, the treaty brought into existence the European
Coal and Steel Community (ECSC), which commenced operations in Luxembourg in June 1952.
Europe's first so-called supranational institution,
the ECSC grew out of negotiations launched dramatically on May 9, 1950, with the announcement
of the Schuman Plan proposal by the French foreign
minister, Robert Schuman. Its real author, however,
was Jean Monnet, head of the French Plan de Modemisation et d'Equippement (Modemization Plan).
Monnet chaired and directed the Paris proceedings
as weIl as serving as the first president of the High
Authority, the executive arm of the ECSC, until November 1954. In addition to France, the countries
represented at the negotiations were Belgium, the
Netherlands, Luxembourg, Italy, and the Federal
Republic of Germany. Participation was open to
other nations, but Britain refused to enter the talks.
The six nations that took part in them made up the
eventual membership of the Community.
The founding of the Coal and Steel Community, whose institutions in 1967 formally merged
with those of the European Economic Community
(EEC) and the European Atomic Energy Community (EURATOM), was more significant as an
episode in the diplomatie history than the politieal
eeonomy of Europe. Monnet and his followers
claimed to have diseovered in supranationalism a
new prineiple and in the ECSC a new mechanism
for overeoming the nationalism at the root of the two
tragie European wars of the first half of this eentury.
Yet the High Authority never effectively regulated
the heavy industry ofWestem Europe, whieh though
market responsive eontinued to operate within the

180

Europeon Cool and Steel Community (ECSC)

framework of national producer associations and

legislative environments; consequently the High Authority had no broader economic impacts. For this
reason, but partly also because ofMonnet's unpopularity as president of the High Authority, the supranational ECSC did not provide a model for the institution that launched Europe on the second stage of
integration, the European Economic Community.
The coal-steel pool nonetheless set in motion a
process, led by West Germany, involving the delegation of sovereign powers to a transnational authority
at the European level that began what, for lack of a
better term, can be called integration.
Estoblishing the Europeon Cool ond Steel
Community
Though Jean Monnet's personal contribution was
essential to the creation of the ECSC, he was not
alone in imagining that a coal-steel pool, if set up
in Western Europe, could provide a framework for
peace and prosperity. Robert Schuman shared this
hope, as did many policymakers in wartime Germany, the United States, and elsewhere, France
not least of all. It is worth noting that discussions
in August 1943 among Free French officials in Algiers resulted in highly sophisticated plans far
such an organization. Intellectually, the proposal
for a coal-steel pool had many fathers and, once
launched, could draw on profound sources for
support. However, it also faced a dense logjam of
past and present problems that had to be eleared
before real progress could be made toward its realization. One cannot easily imagine that anyone
other than Monnet, or for that matter any committee or authority of whatever sort, could have done
this job with such dispatch and so effectively; only
he had the necessary connections, know-how, and
energy to manage the task.
Monnet was an international businessman
and civil servant with powerful friends on Wall
Street and in Washington, where he had represented Britain in lend-lease matters during the
war. He was also an influential adviser behind the
scenes and deserves credit for his powerful advocacy of, and help in organizing, the Victory Program. Thanks to his access to the U.S. aid
pipeline, Monnet enjoyed a high degree of autonomy as postwar head of the Modernization Plan,
and his friendships with such movers and shakers
as Secretary of State Dean Acheson and U.S. High
Commissioner in Bonn John J. McCloy proved to
be crucial to the success of the Schuman proposal.

So, too, were lessons leamed in wartime Washington where, Monnet discovered, a few able and
well-placed policymakers, working in elose cooperation, could outperform even the best-oiled bureaucracies. During the Schuman Plan negotiations, as well as during his tenure as president of
the High Authority, Monnet held all the lead
strings. It must be added that this was in no small
part thanks to Schuman, whose loyal backing
helped Monnet circumvent the French administration and cabinet, which, in being called upon to
ratify the Treaty of Paris, faced what amounted to
a fait accompli: Europe: oui ou non! This removal
of the coal-steel pool from quondam politics had,
given the vividness of French war memories, a
critical bearing on the outcome.
The bald presentation of the Schuman Plan as
something unprecedented and transcendentthough it was neither-produced a public relations
coup of titanic proportions that was also an essential ingredient of success. By 1950 the idea for a
coal-steel pool in Western Europe was very much
in the air. Furthermore, there existed in the region a
well-worked tradition of cartel-based producer cooperation that between the wars had given rise to
schemes for conflict-resolution on a broader scale.
These private networks continued operating in
"New Order" Europe. Implicit, furthermore, in the
notion that supranational control of heavy industry
could prevent further world wars was a suggestion
that it had caused them in the first place, something
that no serious analysis would support. Yet lack of
intergovemmental coal-steel cooperation had, after
both warld wars, vexed attempts to structure the
framework of peace settlements. The acute shortage
of combustible materials after 1945 provided daily
reminders of this fact to everyone who slept cold at
night or returned horne from work in a factory unable to operate for lack of power. There existed finally a deep, even unfathomable, longing for peace
that kept only the most skeptical from suspending
disbelief, if only briefly, that new approaches to
Franco-German reconciliation might work.
The harsh reality in postwar Western Europe
was that only the Ruhr disposed of the coal that
everyone needed. Without the interposition of an
effective control mechanism over the Ruhr, economic recovery was thus ultimately hostage to the
smoke stack barons of the ex-Reich. Monnet's attempt to secure a settlement on this basis, backed
strongly by the United States, depended on German chancellor Konrad Adenauer's gaining com-

Europeon Cool and Steel Community (ECSC)

pliance from Ruhr industry to a regulatory regime

that was an anathema to it. This regime represented an application of the trust-busting ideology
of the New Deal; its purpose was to break up the
Ruhr Konzerne and supporting cartel structure.
Chancellor Adenauer managed to square the circle
in the course of two sets of difficult negotiations
running from December 1950 to January 1951
with, on the one hand, a team representing McCloy and Monnet and, on the other, the delegates
of Ruhr heavy industry. The settlement removed
the last obstacle to concluding the Paris talks.
The Treaty of Paris consisted of exactly one
hundred articles, plus annexes, setting aims and
objectives, defining powers, and specifying rules
of business conduct. The new Community was to
serve a number of noble ends. In addition to preventing war, it was to ensure fair competition,
raise and equalize wages and benefits, and stimulate econornic growth. The powerful High Authority held management responsibility, its power
hedged in special circumstances by a Council of
Ministers representing the contracting states. The
Couneil could direct the High Authority to take
action in certain specified emergencies and had
power to ratify certain fundamental decisions,
which in the last analysis required assent from the
contracting states. The treaty also provided for a
high court with broad powers of review and a general assembly composed of appointees from the
national parliaments to debate policy, statutory
bodies with long-run significance for Community
operations.
Accomplishments

The ECSC worked to the satisfaction of no one,

yet its accomplishments were substantial. Monnet,
first of all, tried to run the High Authority as he
had the French Plan, through hand-picked commandos, thereby demoralizing the able industrialists and senior officials recruited to staff it. Monnet's disinterest in coal-steel problems, along with
abiding preoccupation with such extraneous issues
as the European Defense Community, added to the
problem. An advisory committee (AC), which
provided for producer representation within the
High Authority, became a focal point of opposition to Monnet. It stemmed initially from a Ruhr
subject to decartelization decrees but soon also
from other regions once it became clear that they
were to be subject to a sirnilar set of rules. The
disputes between Monnet and the AC in turn rnir-

181

rored a broader systernic conflict that, during the

years of Monnet's presidency, the producers won.
In short, trustbusting got nowhere, the Konzerne
returned, an international steel export cartel reformed, and prewar patterns of producer cooperation in Western Europe revived. The openings of
the common markets for coal and steel, in February and May 1953, had mainly symbolic significance. Regulation by producer assoeiations and
national governments continued much as before.
However, the ECSC made progress in a number of important areas. The social agenda was not
one of them; "wage harmonization," as prornised
in the treaty, went nowhere. "Readaption," meaning worker relocation and retraining, similarly
flopped, in spite of a generous D.S. loan provided
to make it possible. Still, the transitional arrangements provided in order to make Italian steel competitive did work and set a precedent critical for
the subsequent expansion of the EC. The ECSC
also developed a European scrap policy that,
though its execution was open to criticism, nevertheless provided for a strategie reserve that lirnited
hoarding, smoothed out the price cycle, and
demonstrated that a European public authority
could act on behalf of industry where private
arrangements had failed. Breakthroughs also occurred in harmonizing taxes and unifying railroad
rates. Each of these unspectacular developments
was part of a learning process that would continue
to be both cause and effect of the progress of integration itself.
The broader success of the ECSC owed at
least as much to Adenauer and the West Germans
as it did to Monnet, the French, and the Americans. Chancellor Adenauer championed the Schuman Plan as an expedient means of bringing the
occupation to an end, confident that if the principIe of equality were granted-the one point about
which he was adamant-the Federal Republic's
econornic strength would assure West European
respect for the national interest. The political exereise of sovereign powers was, as such, a secondary matter; here concessions could be made
and indeed were. Political dwarfism and econornic
gigantism are more than mere cliches; they are the
basis for the sernisovereign status that has made
Germany a model for the other great nations of
Europe and without which reunification would
have been impossible.
The pursuit of Westintegration worked because of the Wirtschaftswunder (econornic rnira-

1 82

European Cool and Steel Community (ECSC) Consultative Committee

cle): by the mid-1950s West Germany had become

the engine of Europe's economic deve1opment.
The growth of these years provided persuasive evidence, regardless of the specific workings of the
ECSC, of the wisdom of treating the Ruhr and the
producers of the Federal Republic generally as a
European asset. The decision to advance integration by means of a new customs union confirmed
the course taken with the founding of the ECSC.
See also MONNET, JEAN; SCHUMAN, ROBERT.
Bibliography

Gillingharn, lohn. 1991. Coal, Steel, and the Rebirth of

Europe, 1945-1955. Cambridge: Cambridge University Press.

-lohn Gillingham

European Coal and Steel

Communlty (ECSC) Consultatlve
Commlttee
Made up of de1egates from the member states, the
European Coal and Steel Community (ECSC)
Consultative Committee advises the Commission
on ECSC-related initiatives and proposals (energy
policy, research and technological development
policy, external trade agreements, and so on). The
committee meets about six times a year.

European Commlsslon
See COMMISSION.

European Commlttee for

Standardlzatlon

See EUROPEAN STANDARDS COMMITfEE.

European Communitles
There are three European Communities: the European Coal and Steel Community (ECSC), the European Atomic Energy Community (EURATOM),
and the European Economic Community (EEC).
Collectively they are known as the European Community (EC) and comprise the first pillar of the EU.

European Communlty (EC)

In November 1993, when the Treaty on European
Union (TEU) came into force, the European Com-

munity (EC) became the collective name for the

three Communities-the European Coal and Steel
Community (ECSC), the European Economic
Community (EEC), and the European Atomic Energy Community (EURATOM)-that make up the
first pillar of the European Union (EU). Nevertheless, the EC still refers unofficially to the EEC, the
most important and far-reaching of the three Communities. This entry outlines the history and development of the EC from the origins of the EEC
to the launch of the EU.
The EEC originated in a proposal in 1952 by
J. W. Beyen, foreign minister of the Netherlands,
to extend the competence of the proposed European Political Community, wbich was part of the
proposed European Defense Community (EDC).
The Beyen Plan, a scheme for a customs union
and common market embracing the six member
states of the ECSC, survived the defeat of the
EDC in August 1954 and, consequently, the
demise of the European Political Community.
Beyen believed that sectoral integration alone was
insufficient to promote economic development
and, ultimately, political union. Instead, the Six
should abolish quotas and tariffs on intra-Community trade, establish a joint external tariff, unify
trade policy toward the rest of the world, devise
common policies for a range of socioeconomic
sectors, and organize a single internal market.
Beyen's idea was revived at a meeting of
ECSC foreign ministers in Messina, Sicily, in
lune 1955 called to discuss the future ofEuropean
integration. Paul-Henri Spaak, the Belgian foreign
minister, had prepared a memorandum, on behalf
of the Bene1ux countries, suggesting further integration along the lines of Jean Monnet's idea for
an Atomic Energy Community and Beyen's advocacy of a common market. The foreign ministers'
decision at least to give the question of European
integration further thought, by asking Spaak to
form a committee and write areport on future options, constituted the first "relaunch of Europe."
During the next twelve months Spaak steered
the work of a number of committees and subcommittees that drafted specific parts of a precise proposal to advance the European idea. His report,
presented to bis fellow foreign ministers at a meeting in Venice in May 1956, urged that the two objectives of sectoral (atomic energy) integration
and wider economic integration (a common market) be realized in separate organizations, with
separate treaties. The Venice foreign ministers'

European Community (EC)

meeting marked the first stage of a protracted

process of intergovernmental negotiations, culminating in the signing of the Treaties of Rome in
March 1957, which established EURATOM and
the EEe.
The negotiations that led to the establishment
of the EEC were by no means smooth. Following
the failure of the EDC in 1954 and the seeming
overambition of the ECSC High Authority under
Monnet's presidency, supranationalism had acquired a bad name, and politicians had to proceed
cautiously. Nor were all potential member states
eager to embrace competition and open markets.
France, in particular, was loath to abandon protectionism. Robert MaIjolin, a senior French negotiator, fought what he called "the Battle of Paris" trying to promote French interests, on the one hand,
and overcome the resistance of French politicians
and civil servants, on the other.
MaIjolin and others argued the case for a customs union and common market on its own merits
but bolstered their position with the legitimate assertion that France could not have the desirable
atomic energy community without the less desirable economic community. Moreover, they convinced their fellow negotiators of the need to meet
two fundamental French demands-the inc1usion
of agriculture and special provisions for France's
overseas pos sessions in the proposed common
market. The other countries agreed in part because
of the benefits that would accrue to all from a
common agricultural policy and because Be1gium
and the Netherlands would benefit as weIl from
extending market access to the member states'
overseas possessions. But the main reason for the
other states' acquiescence was the irnportance to
them of inc1uding France in the EEe. An EEC
without Britain was perfectly possible; an EEC
without France was impracticable. As FrancoGerman reconciliation lay at the core of the Community, and the Community was the key to Germany's postwar rehabilitation, Chancellor Konrad
Adenauer was willing to pay almost any price to
placate Paris.
The preamble of the EEC treaty was far less
flowery than its ECSC counterpart, referring only
to the signatories' determination "to lay the foundations of an ever c10ser union among the peoples
of Europe." The treaty itse1f outlined the essential
principles of the common market: the free movement of goods, persons, services, and capital; a
customs union and common external tariffs; and

183

various EEC policies. The new Communities' institutional frameworks emulated that of the ECSC
but with a stronger Council of Ministers and a correspondingly weaker Commission. Because Luxembourg, horne of the ECSC, did not want a further influx of foreigners, by default Brusse1s, site
of the intergovernmental conferences that led to
the Treaties of Rome, hosted the new EC institutions. However, the Assembly (Parliament), common to all three Communities, continued to hold
its plenary sessions in Strasbourg.
The first EEC Commission, under the presidency of Walter Hallstein, set about implementing
the Rome treaty. Its responsibilities inc1uded external economic relations, economic and financial
affairs, the internal market, competition, social affairs, agriculture, transport, and relations with
overseas countries and territories. In some of these
areas the treaty laid down a specific timetable to
implement certain measures; in others, the treaty
provided no more than general guidelines and
statements of principle. The most immediate and
tangible task was to establish the customs union.
Thanks to French financial and economic reforms,
the first intra-EEC tariff reductions took place on
schedule on January 1, 1959, and the customs
union came into existence ahead of schedule on
July 1, 1968.
Whereas tariff barriers could easily be identified and eliminated between member states, policies in areas such as competition, social affairs,
transport, energy, and regional disparities were far
harder to formulate. A combination of sometirnes
vague treaty provisions, member state apathy or
outright opposition, and philosophical and ideological differences between and among the Commission and Council-factors that are as cogent in
the EU today as they were in the early years-impeded progress in the Ee. The result was a spotty
record of policy formulation and irnplementation.
The Common Agricultural Policy (CAP) was
the most challenging and controversial ofthe EC's
early initiatives. In order to be politically acceptable and economically practicable, the CAP had to
replace individual member states' systems of customs duties, quotas, and minimum prices with an
EC-wide system of guaranteed prices and export
subsidies. Sicco Mansholt, vice president of the
Commission with responsibility for agriculture,
was the CAP's chief architect. Detailed discussions on the CAP's fundamental principles and
procedures took place in the early 1960s, as the

184

European Community (EC)

Commission and the member states thrashed out

the precise means by which it would operate.
A dispute between French president Charles
de Gaulle and the Commission over a financial
provision for the CAP precipitated one of the
worst crises in the EC's history. Realizing how eager de Gaulle was to secure the financial regulation, the Commission proposed funding the CAP
by a system of EC own resources, thereby increasing the powers of the Commission and the Parliament. De Gaulle strongly opposed a further augmentation of the EC's supranational authority and
especially objected to a move, mandated under the
treaty, to replace unanimity with majority voting
in EC decisionmaking. Following a breakdown of
negotiations with the Commission and the other
member states, in July 1965 de Gaulle stopped
French participation in the Council of Ministers
and the Committee of Permanent Representatives
(COREPER). The so-called Empty Chair Crisis
ended in J anuary 1966 with the Luxembourg
Compromise, which amounted to an agreement to
disagree over majority voting. Under the terms of
the Luxembourg Compromise, France resumed its
full participation in the EC, but the consequences
of the crisis, particularly in terms of the Commission's se1f-confidence and the Council's decisionmaking procedure, persisted into the early 1980s.
In the 1960s the EC also addressed the question of enlargement when Britain, Denmark, Ireland, and Norway applied to join. Accession negotiations began in 1961 but ended abruptly in January
1963 when de Gaulle announced at a press conference in Paris that Britain was not yet ready for
membership. De Gaulle objected to Britain's strategic dependence on the United States, which he
thought would prevent the EC's proper political development. He vetoed Britain's second application
in 1967, essentially for the same reason. Only when
de Gaulle resigned as president of France in 1969
did enlargement become feasible. Georges Pompidou, de Gaulle's successor, called for a special
summit of EC leaders to resolve the enlargement issue. Pompidou advocated enlargement in the context of "completion" and "deepening." Completion
meant moving to a system of "own resources" to finance the CAP; deepening meant extending the
EC's competence into new areas.
The Hague summit on December 1 and 2,
1969, broke the deadlock over enlargement and
set the EC on course for the decade ahead. As a result of decisions taken at The Hague, the follow-

ing year EC leaders endorsed two reports on deepening. The first proposed European Political Cooperation (EPC), a procedure for foreign policy
coordination among the member states. The second outlined a plan for Economic and Monetary
Union (EMU). At the Paris summit on October 19
and 20, 1972, held on the eve of the EC's first enlargement (Britain, Denmark, and Ireland joined
on January 1, 1973), the member states declared
their intention "before the end of the present
decade to transform the whole complex of their
relations into a European Union." This was an extraordinary statement even by the standard of EC
rhetoric and illustrates the member states' high
hopes for European integration at the beginning of
the 1970s. As the decade progressed, however, and
the EC became bogged down in high inflation
rates, soaring unemployment, and low economic
growth, prospects for European union grew more
and more remote.
Thus the 1970s were difficult for the EC. Europessimism replaced the Eurooptimism of 1971
and 1972. The Middle East war in October 1973
and the ensuing oil embargo and price rises threw
the member states' economies into chaos. Instead
of pursuing a joint approach to their common
problems, the member states took individual action. Coup1ed with the demise of member-state
solidarity, bureaucratic inertia in Brussels and decisionmaking paralysis in the Council (a legacy of
the Luxembourg Compromise) virtually brought
the EC to its knees. An effort by French president
Valery Giscard d'Estaing to revive the EC by institutionalizing summits of heads of state and government in a new European Council served only to
emphasize the extent of the EC's malaise.
Yet the EC survived the 1970s and revived
spectacularly in the 1980s, thanks in part to Giscard's initiative. The seeds of the EC's revival
were sown in the late 1970s, during the Commission presidency of Roy Jenkins (1977-1981), and
reaped in the following years. At that time the
member states finally implemented a long-standing plan for direct elections to the European Parliament (EP), the first of which took place in June
1979. The new, directly elected EP proved much
more assertive than its predecessor and, under the
leadership of Altiero Spinelli, drafted a revised
constitution for the EC. The Draft Treaty Establishing the European Union, passed by the EP in
February 1984, contributed to the momentum then
developing to deepen European integration.

European Community (EC)

Also during the Jenkins presidency, the EC

coneluded Greece's accession negotiations and
began negotiations on Spanish and Portuguese
membership. The accession of Greece and imminent accession of Spain and Portugal forced member states to tadde the EC's decisionmaking problems and coincided with the Draft Treaty and the
Genscher-Colombo proposals for institutional reform and greater involvement in foreign and security policy.
A third beneficial development during the
Jenkins presidency was the launch ofthe European
Monetary System (EMS) in March 1979. Eighteen
months earlier Jenkins had made an important
speech advocating monetary union. After initial
hesitation, Chancellor Helmut Schmidt of Germany warmly embraced Jenkins' initiative. At the
Bremen summit in July 1978, Schmidt unveiled a
Franco-German proposal to establish a zone of relative monetary stability in a world of wildly fluctuating exchange rates. The ensuing EMS was a success and helped participating member states to
fight inflation and recover economic growth. It
also gave member states the confidence to embark
on the single market program, which epitomized
the EC's resurgence in the 1980s.
The single market program was a response
not only to the EC's failure to date to bring about a
real common market but also to Europe's perceived deelining competitiveness vis-a-vis the
United States and Japan, especially in the hightechnology sector. Etienne Davignon, a Commission vice-president (1981-1985), developed extensive contacts with European industrialists and
promoted elose Commission-industry cooperation
in research and development. His enterprise
spawned a number of collaborative ventures in the
early 1980s and helped to generate enthusiasm
among industrialists and businesspeople for the
single market initiative.
Arthur Cockfield, a vice president in the first
Jacques Delors Commission (1985-1989) who
had responsibility for the internal market, produced a white paper in 1985 outlining the steps
necessary to bring about a situation in which peopIe, capital, goods, and services could move freely
within the EC. But such an ambitious plan was unlikely to succeed without a radical reform of EC
decisionmaking. Nor could the EC have made
much progress as long as it remained embroiled in
a bitter controversy over Britain's budgetary contribution, which Margaret Thatcher reopened as

185

soon as she became prime minister in 1979. Resolution of the British budgetary question at the
Fontainebleau summit in June 1984, after nearly
five years of frustration and aggravation, freed the
EC's leaders to set their sights on a higher goal.
This was the elimate in which the European
Council convened in Milan in June 1985. In an unprecedented move, a majority of EC leaders outvoted the recalcitrant minority-Britain, Denmark,
and Greece-and called for an intergovemmental
conference (IGC) to revise the Treaty of Rome.
The IGC produced the Single European Act
(SEA), which set a target date of December 31,
1992, for comp1etion of the single market program; stipulated that most of the single market decisions would be subject to majority voting in the
Council; and brought EPC, the environment, research and development, and regional policy explicitly within the treaty framework. Full ratificati on of the SEA (signed in February 1986) was
delayed until July 1987. More hard negotiating followed, especially on compensation for poorer
countries in the single market, before the program
took off in 1988 and 1989.
Jacques Delors personified the EC's extraordinary revitalization at that time. Energetic, ambitious, and farsighted, Delors gave the Comrnission
a new sense of purpose. His elose friendship with
Chancellor Helmut Kohl of Germany and political
affinity with French president Fran90is Mitterrand
gave Delors exceptional influence in the European
Council. However, Delors soon ran afoul of
Thatcher, especially for his espousal of a Social
Charter to allow workers to enjoy the full benefits
of the single market. Thatcher directed much of
her hatred of socialism, supranationalism, and European federalism at Delors and the Brussels bureaucracy.
Thatcher also opposed Delors' effort to cement the single market by relaunching EMU. In
April 1989 Delors produced a plan (the Delors Report) to achieve EMU in three stages: by promoting economic convergence, establishing a European central bank, and ultirnately creating a single
currency. Despite his misgivings about currency
union, Kohl supported the Delors Report, and Mitterrand was enthusiastic. The Spanish govemment,
then in the Council presidency, strongly supported
Delors' initiative. At the Madrid summit, in June
1989, the European Council agreed that De1ors's
plan provided a blueprint for EMU and decided to
launch the first stage by July 1, 1990.

, 86

European Community (EC)

In and of itself the single market program

was insufficient to maintain a powerful momenturn toward EMU. Yet the contemporaneous revolution in Eastern Europe and the imminent reunification of Germany gave a huge boost to EMU and
added political union to the agenda. Delors rapidly
realized that what he called the "acceleration of
history" in Central and Eastern Europe afforded
the EC a unique opportunity to reaffirm its political objectives and to expedite EMU. The other
member states' consent to German unification was
the bargain upon which the EC's future hinged.
The deal was struck at the Strasbourg summit in
December 1989. An exuberant Chancellor Kohl
sought to allay his partners' anxieties about German unification and especially to overcome deep
French suspicion. At the end of the historic meeting, the other member states acknowledged Germany's right to self-determination but only in the
context of European integration and unification. In
concrete terms, this meant an end to German footdragging over EMU and a commitment to proceed
on political union.
The Strasbourg summit set the stage for two
years of frenetic discussions among the member
states and the Commission about the nature,
scope, and competence of the "new" EC in the
"new" Europe. During 1990 member states decided to convene two parallel IGCs, one on EMU
and the other on political union. Both conferences
opened in Rome on December 13 and 14, 1990,
and culminated in the Maastricht summit on December 9 and 10, 1991.
Of the two IGCs, the one on EMU made most
progress. After all, the Delors Report already existed as a blueprint. Member states-including
what seemed like a more compliant Britain following Thatcher's departure as prime ministerbegan to tackle the plan's most pressing particulars, notably convergence criteria, composition of
the European Central Bank (ECB), and the ECB's
relationship to other EC institutions and the member state governments. At Maastricht the heads of
state and government effectively adopted the Delors Report and set the definitive date of 1999 for
a single currency.
By contrast, the parallel intergovernmental
conference on political union lacked focus and direction. Negotiations covered a wide range of issues, including institutional reform, the Social
Charter, and foreign and security policy. The
Dutch, who took over the Council presidency in

July 1991, proposed that member states embrace

EMU, foreign and security policy, cooperation on
horne affairs, and the Social Charter in a unitary
EU structure. The other member states, however,
preferred to keep foreign and security policy and
horne affairs on an intergovernmental basis, outside the formal treaty framework. As a result, the
new treaty established an EU that resembled a
temple resting on three separate pillars: the Communities (now collective1y called the EC), a Common Foreign and Security Policy, and Cooperation on Justice and Horne Affairs. The treaty
reformed decisionmaking, notably by strengthening the EP's legislative power, and extended the
EC's competence to include such matters as education, culture, and consumer protection. British
prime minister John Major's opposition to the Social Charter obliged the other member states at the
last minute to remove it entirely from the proposed union and move it instead to aseparate protocol that Britain alone did not sign.
The TEU was to have been ratified in 1992 in
order to be implemented on January 1, 1993.
However, Denmark's narrow rejection of it in a
referendum on June 2, 1992, sparked a ratification
crisis throughout the EC, especially in Britain. At
the very least, the Danish vote caused a serious legal problem: even if the other eleven member
states ratified the treaty, Denmark's rejection obviously invalidated it. At worst, the failure of the
TEU would scuttle the putative EU and reverse the
rapid advance made by European integration in
the late 1980s and early 1990s. Eventually the ratification crisis-in the narrowest sense-was resolved by concessions made to Denmark at the
European Council in Edinburgh, on December 11
and 12, 1992, and approved in a second Danish
referendum on May 18, 1993. But in a broader
sense-in terms of the new EU's credibility, legitimacy, and self-confidence-the ratification crisis
has persisted into the late 1990s.
See also EUROPEAN UNION; SINGLE EUROPEAN
ACT; TREATY ON EUROPEAN UNION.

Bibliography
Dinan, Desmond. 1994. Ever Closer Union? An Introduction to the European Community. Boulder:
Lynne Rienner.
Urwin, Derek W. 1991. The Community of Europe: A
History of European Integration Since 1945. London: Longman.

-Desmond Dinan

European Company Statute (ECS)

European Communlty Action

Scheme for the Mobility of
Unlverslty Students (ERASMUS)
In order to encourage student and faculty exchanges, and thereby deepen European integration at a personal and professional level, in 1987
the EC launched the European Community Action Scheme for the Mobility of University Students (the ERASMUS program). Managed by the
Task Force for Human Resources (TFHR) within
the Commission, the program provided funding
and logistical support to help university students
spend part of their undergraduate career in another member state and expand their field of
study to include European languages and culture.
ERASMUS also promoted curriculum development across member-state boundaries, facilitated
intensive short-term study-abroad courses, and
provided a badly needed system of credit transfer.
In the acadernic year 1996-1997, nearly 200,000
students were in some way involved in ERASMUS. In 1995 ERASMUS was brought under the
auspices of SOCRATES, an umbrella program for
action at all educational levels. With a budget of
ECU one billion for the years 1995-1999,
SOCRATES seeks to "encourage innovation and
improve the quality of education through
strengthening cooperation between the various
educational institutions."
See also EDUCATION, VOCATIONAL TRAINING,
AND YOUTH POLICY.

European Communlty
Humanltarlan Office (ECHO)
In 1992, the Commission established the European Community Humanitarian Office (ECHO)
to provide emergency humanitarian and food aid
to the former Yugoslav republics; the African,
Caribbean, and Pacific countries (as part of the
Lome conventions); and countries in Latin America, the Mediterranean, the Near and Middle
East, Central and Eastern Europe, the Commonwealth of Independent States, and the Far East. In
1997, ECHO funded nearly two thousand projects in over eighty countries on four continents.
ECHO operates through a wide range of partners,
including nongovemmental organizations (which
administer nearly 60 percent of ECHO funding)
and UN agencies (which administer over 25 percent).

187

European Communlty Law

See EUROPEAN COURT OF lUSTICE.

European Communlty Studles

Assoclatlons (ECSAs)
European Community Studies Associations
(ECSAs) are a network ofnationally based acadernic organizations for research and scholarship on
all aspects of European integration. The European
associations coordinate their activities within
ECSA Europe, an umbrella organization largely
funded by the Comrnission. ECSA U.S. is the
largest and most active of the many national associations.

European Company
Statute (ECS)
The European Company Statute (ECS) is a proposed set of guidelines and mandates to facilitate
transnational business in the EU. The purpose is to
establish a type of company-a so-called European
Company-that could operate throughout the EU
and be governed by a single EC law directly applicable in all member states. The ECS would enable
cross-border associations, commercial entities, and
legal associations to operate with greater flexibility
and mobility. First suggested by the Commission in
the early 1970s, the ECS has been bedeviled by the
inclusion in it of a proposal for greater worker involvement in company decisionmaking. Having
gotten nowhere with this idea in the 1970s and
early 1980s, in the wake of the single market program in the late 1980s the Commission proposed a
European Works Councils Directive to involve employees directly in major decisions of a European
Company. The proposed Works Councils Directive
provoked bitter resistance from the British government, wh ich adamantly opposed anything that
smacked of socialism and workers' rights. At the
Maastricht summit in December 1991, Prime Minister lohn Major negotiated a British opt out from
the Social Chapter of the Treaty on European
Union, thereby obliging the other member states to
attach a protocol to the treaty in order to pursue social policy among themselves. The Works Councils
Directive was eventually passed in 1994 under the
social protocol, thereby bypassing British opposition and excluding Britain from its provisions until
Britain signed the Social Chapter under a new govemment in 1997.

188

Europeon Confidenee Poet on EmpJoyment

European Confidence Pact

on Employment
See

CONFIDENCE PACT ON EMPLOYMENT.

European Convention for the

Protection of Human Rights
and Fundamental Freedoms
The European Convention for the Proteetion of
Human Rights and Fundamental Freedoms was
adopted on November 4, 1950, by the Council of
Europe. Ten protocols were later added to it. The
convention guarantees such civil and political
rights as the right to a fair trial, freedom of expression, free elections, and respect of property. The
EU has not signed the convention, although all of
its member states have.
Concems about the narrowness of rights in the
EC were fIrst expressed in the mid-1970s and grew
with the EC's political transformation in the late
1980s. Accordingly, the Treaty on European Union
(TEU) included a Declaration on Fundamental
Rights and Freedoms, established EU citizenship,
referred to rights to information and redress within
the EU's institutions, and required member states to
agree upon certain transnational political rights.
These provisions and other innovations in the TEU
have not allayed public unease about democratic
unaccountability and citizens' rights in the EU.
Hence the possibility that the EU may accede to the
European Convention for the Proteetion of Human
Rights and Fundamental Freedoms.
See also HUMAN RIGHTS.

European Cooperation
In the Fleld of Sclentific and
Technological Research (COST)
European Cooperation in the Field of ScientifIc
and Technological Research (COST) was an early
pro gram for research and development in the
high-technology sector, notably in informatics and
telecommunications. COST was not specifIcally
an EC program, but in 1971 the EC joined with
neighboring countries to participate in it.
See also RESEARCH AND TECHNOLOGICAL DEVELOPMENT POLICY.

European Councll
A study of the European Council is an essential
part of any attempt to understand the evolution of

European integration, perhaps even that of Western Europe as a whole, over the last twenty years.
The European Council's activities and functions,
its successes and failures, have shaped the European integration process since the 1970s like no
other institution. Indeed, the European Council
has been responsible for such pivotal decisions as
those on the Single European Act (SEA) and the
Treaty on European Union (TEU), in addition to
deciding other "constitutional" questions for the
EU, such as enlargement and fInancial resources.
Yet the European Council, composed of the heads
of state and govemment of the member states and
the president of the Commission, remains the EU
body most difficult to grasp in legal and political
science terms.
To those unaccustomed to the EU, the European Council may appear to be another example
of intergovernmental co operation by means of
summits-a classical realist tool. The dearth of
written rules governing its operation serves only
to reinforce this impression. However, this would
be a superficial interpretation of a body that fInds
itself playing a key role at the top of a unique,
highly developed and intermeshed institutional
and political system. The fact that the leaders of
fIfteen Western European states meet together at
least twice a year to take decisions on subjects
ranging from the Common Foreign and Security
Policy to Economic and Monetary Union and Justice and Horne Affairs is indicative of the extent to
which the policy decisions and tools of the EU
and its member states have become fused.
The highest political representatives of the
member states have developed a form of collective
responsibility for this new European system. The
European Council is, however, not an institution
of the EU in the legal sense. Founded on a decision of the governments of the member states at
the Paris summit in 1974, the European Council
was only given a formal legal base in Article 2 of
the SEA, though no reference was made to it
within the EC treaty itself. A similar arrangement
is to be found in the TEU, with the European
Council being dealt with in the seetion entitled
"Common Provisions" (Article D), outside the EC
treaty proper, and therefore not subject to the latter's constitutional-like checks and balances.
The RoJe of the Europeon CounciJ
According to Article D of the TEU, "the European
Council shall provide the Union with the neces-

European Council

sary impetus for its development and shall define

the general political guidelines thereof." The actual role of the European Council can be characterized by referring to three basic functions.
First, there is what can be described as constitutional architect of the EU. This function is often
vaguely attributed to the European Council, in the
form of providing a "general political impetus"
for the European construction and of identifying
answers to the fundamental questions facing the
EU. Especially in the 1980s, the European Council agreed to numerous important initiatives, such
as the convening of the intergovernmental conferences on the SEA (Milan summit, 1985), economic and monetary union (Strasbourg summit,
1989), and political union (Dublin summit, 1990),
which in the end were to lead to agreement on the
TEU itself.
By means of these decisions, the heads of
state and government have significantly enlarged
the scope and magnitude of joint activities. They
have repeatedly identified the problems of Western Europe as areas for some kind of common or
coordinated policy to be pursued either by the EU
or by the member states cooperating in some other
manner (often intergovernmental), on each occasion indicating the way in which the particular
problem should be approached.
A second and quite different function of the
European Council concerns agenda setting: the
adoption of general guidelines in econornic, social,
and foreign policy issues and of especially important declarations on specific subjects. Accordingly,
the European Council can be described as the
"stimulator" and "agenda-setter" of the EU and its
policies. The foreign policy profile of the EU has,
in particular, benefited greatly from the statements
of the heads of state and government. There are
European Council declarations on virtually all international political crises since the 1970s: on
South Africa, the Middle East, ex-Yugoslavia, and
the collapse of the Soviet Union, among others. As
a result, the European Council can now be seen as
the highest symbol of the EU vis-a-vis the world. It
is also the case that the European Council has
played a key and facilitating role in furthering the
member states' cooperation in the areas of Justice
and Horne Affairs covered by the third pillar of the
TEU: numerous declarations are to be found on issues such as terrorism and international crime as
well as on annual "work programs" to be undertaken in the areas concerned.

189

A third function of the European Council,

which has been of key importance to the development of the EU, is decisionmaking, both for the
EC and for the EU's other two pillars. As such, the
European Council can be seen as the EU's "ultimate decisionmaker." Thus the European Council
often steps in to decide on particularly controversial financial and institutional questions, although
it never itself adopts the legally binding decisions
for the EU. Rather, it is left to the EU's normal decisionmaking procedures to turn a political agreement reached in the European Council into a binding legislative act.
The decisionmaking process in the European
Council is highly informative. Many crucial decisions are arrived at as a result of the forging of
"package deals": a number of distinct issues,
which are often from different policy areas and
have not on their own found the agreement of all
member states, are put on the table in the hope that
transsectoral comprornises can be reached. Only
the heads of state and govemment are in a position
to be able to bargain with one another about each
others' relative gains and losses in various policy
areas at the same time. It may well require considerable time and energy on the part of the national
leaders, but the further development of the EU is
highly dependent on this summit-style of bargaining; the way in which substantial parts of the TEU
came to be agreed upon is once again witness to
this. On such occasions, the heads of government
and state find themselves, contrary to their nature,
in situations where they are forced to discuss concrete formulations in great detail. It is only by discussing the technical details of a text that the real
political issues upon which there is disagreement
can come to the fore, and it is only then that the
tough decisions can be taken.
One less significant, but nonetheless interesting, feature ofthe European Council is the style of
interaction that takes place within it. The leaders
of the larger member states tend to dorninate debate in the European Council to a greater extent
than in the Council of Ministers, despite the fact
that in theory, at least, each member state's voice
or weight within the European Council is of equal
value. On some issues, however, the president of
the Commission or some of the leaders of smaller
member states mayaIso playa considerable role.
It is also the case that the country holding the European Council presidency plays a greater leadership role in the preparation and formulation of de-

190

European Council

cisions than it plays in the Council of Ministers.

As for voting in the European Council, it is quite
exceptional that the heads of state and government
ever proceed to anything like a formal vote on an
issue (one exception, however, was the decision at
the Milan summit in 1985 to convene an intergovernmental conference against the wishes of
Britain, Denmark, and Greece); it is more usual
that the presidency notes simply that consensus
has been reached.
Consequences for
the EU's Institutional Balance
When the European Council was first established,
there was concern in some quarters that it would
permanently alter the original institutional balance
of the Ee. The expectation of some was that the
heads of state and government would undermine
the Commission's monopoly of the right of initiative, would downgrade the Council of Ministers to
some kind of subordinate chamber, and would effectively circumvent the lirnited rights of the European Parliament (EP). The development of the
European Council has shown, however, that these
trends have not been fully realized. In many areas,
especially those of a less controversial nature, the
European Council has had little or no effect on the
normal institutional workings of the Community.
Moreover, the Commission and especially its
president have gained in profile and status through
their involvement in the European Council and by
being able to use the European Council's declarations as some kind of mandate for much of their
policy activity.
The consequences for the EP appear to be
less positive. While it may be the case that the
president of the EP has, since 1988, been able to
put forward Parliament's opinion at the beginning
of each session of the European Council, this does
not hide the fact that more often than not the rights
of the Parliament (according to the treaty) vis-avis the European Council are given purely lip-service by the latter. The heads of state and government also determine the constitutional rights of
the EP without showing a great deal of desire to
enter into discussion on the subject with Parliament itself. The Council of Ministers, on the other
hand, has not seen itself become a second-class
chamber, with its position in the EU's institutional
structure being sustained by the way in which it
both prepares and follows up the work of the European Council.

More problematic in constitutional terms is

the fact that the European Council finds itself outside the checks and balances of the EU system,
something that was stated emphatically once
again in the TEU. Indeed the activities of the European Council remain beyond the reach of the judicial control of the European Court of Justice
(Article L).
Conc/usion
Given the considerable challenges that have confronted European integration over the last twenty
years, the European Council has made a significant
contribution to the overall strengthening of Western Europe. Since the mid-1980s, its decisions
have helped to shape the evolution of the Community into the EU. It can only be expected that in the
remainder of the 1990s the European Council will
continue to be the constitutional architect, the
stimulator, and the ultimate decisionmaker not
only for the EU but also for the whole of Europe,
thereby reinforcing the European Council's (and
the EU's) role in the international system. This status will be boosted by such activities as meetings
between the president of the European Council and
the president of the United States and other key international actors. Within the EU system, the European Council's position will be reinforced by its
role in areas such as the nomination of the Commission president (Article 158 [2] EC). This not
only serves to augment the symbolic nature of the
European Council's leadership within Europe and
beyond but also clearly underlines the agenda-setting character of its role with regard to the work
undertaken by the EU's institutions.
Finally, the European Council should be seen
not as an accidental product of the political whim
of the heads of state and government but rather as a
sign of a fundamental development in Western Europe toward the common use of state instruments
and the accompanying institutional fusion. Far
from being the champion of arealist, state-centric
approach to European integration, the European
Council will continue to exemplify the pooling of
member states' policymaking tools and decisions.
The European Council can, therefore, be seen as a
manifestation of the way in which the interdependent welfare states of Western Europe have chosen
to integrate their activities and instruments in virtually al1 areas of public policy in order to meet the
overall economic, social, and foreign policy expectations of their electorates. However, the fact that

European Court of Justice (ECj)

this body comprises the heads of state and govemment (the highest representatives of the EU member states) reflects the desire of the member states
to ensure the efficiency of the EU system by, on
the one hand, reforming the constitutional architecture of the EU while, on the other, seeking to
maintain the influence of national govemments
over the decisions that shape the future of Europe.
The balance between these two concems of the
member states is a hard one to strike. Accordingly,
the European Council is as much a symbol of the
member states' struggle for unity as a manifestation of their obstinacy.
See also APPENDIX 7; APPENDIX 8.
Bibliography
Bulmer, Simon, and Wolfgang Wesse1s. 1987. The European Couneil: Decision-making in European Polifies. Basingstoke: Macmillan.

-Philip Myers and Wolfgang Wesseis

European Court of Justlce (ECJ)

The Court of Iustice-formally the European
Court of Iustice (ECI)-is the Court of the EU.
Although located in Luxembourg, the ECI is often
confused with the European Court of Human
Rights in Strasbourg (the court for the European
Convention of Human Rights). The ECI is composed of a judge from each member state, selected
by the national govemment to serve a six-year renewable term.
Origins and Development

of the EU's Legal System

The ECI was created in 1951 as part of the European Coal and Steel Community (ECSC), prirnarily to protect firms and states from the new, supranational European institutions (the model was the
high French administrative court-the Conseil
d'Etat-that protects individuals from abuses of
authority by the French govemment). In the
ECSC, the High Authority enforced the treaty
through decisions and recommendations and, with
the Council of Ministers' assent, could fine member states that failed in their obligations and firms
that broke ECSC rules. Decisions of the High Authority could be appealed to the Court, which had
the authority to reverse the decision and award
damages to injured parties. The Court also heard
challenges to the validity of Council decisions,

191

contract disputes between the ECSC and private

contractors, and personnel disputes by employees
of the European institutions.
The ECSC's legal system was adapted for the
European Econornic Community (EEC) but in a
way that made it rather weak and ineffectual. In
the Treaty of Rome, the Comrnission (which incorporated the High Authority) lost the authority
to fine states or firms for breaking EC law. Instead
the Comrnission or another member state had to
bring charges of treaty infringements before the
Court (Articles 169 and 170). If a breach was
found, the Court could declare that the member
state had failed to fulfill its treaty obligations, but
no sanctions or penalties could be levied. Especially in the 1960s and early 1970s the Comrnission and the member states were reluctant to use
the legal mechanisms of the treaty; thus the Court
had few significant cases to consider and few opportunities to develop its jurisp,rudence. When it
did have cases, its decisions were unenforceable.
The original EC legal system was eventually
transformed by a number of key decisions that the
Court of Iustice rendered in cases referred to it by
national courts under the preliminary ruling procedure (Article 177). The procedure works as follows: an individual argues before a national court
that anational law or policy conflicts with European law. If there is a question about the meaning
of the European law, the national judge can make
a "prelirninary ruling reference" to the ECI asking
for an interpretation of the EC law. The parties in
the case are allowed to submit arguments to the
ECI, as are EC institutions and national govemments. The Court's advocate general suggests to
the Court what it should do, based on an analysis
of the arguments, the case law of the Court, and
the laws in question. The Court issues its decision,
and the national judge applies the ECI ruling to
the case at hand. Altematively, the national court
can resolve the dispute on its own, based on previous ECI jurisprudence. Individuals do not have
the option of raising infringement charges directly
in the ECI, and if the national judge refuses to
make a reference or follow ECI jurisprudence,
there is little that the individual can do except to
appeal the decision to a higher national court.
In its 1963 Van Gend en Loos decision, the
Court established the doctrine of direct effect,
which declared that the treaty created individual
rights that national courts had to protecl. In other
words, the decision established that European citi-

1 92

European Court of justice (ECj)

zens had a right to have their govemment respect

its European legal obligations. In its 1964 Costa v.
Enel decision, the ECJ established the doctrine of
the supremacy of EC law, which granted EC law
primacy over national law-even national laws
adopted subsequent to the EC law. These decisions transformed the preliminary ruling system
from a mechanism primarily designed to allow individuals to challenge EC laws into a mechanism
to challenge the compatibility of nationallaw with
EC law (Mancini, 1989; Weiler, 1991). The doctrines of direct effect and supremacy of EC law
created a means for individuals to pull the European Court into national policy debates (Burley
and Mattli, 1993) and an obligation for national
courts to set aside laws and policies that violate
European law.
The transformation of the preliminary ruling
system fundamentally altered the EC legal system.
Preliminary ruling references became the largest
source of ECJ cases, and most of the ECJ's landmark decisions were made in preliminary ruling
decisions. Individuals raised legal questions that
the Commission and member states never would
have asked, allowing the Court greatly to expand
the reach and scope of European law in the national realm. Because of national court references
to the ECJ, national govemments found their ability to keep national policy issues out of the EC legal realm to be significantly diminished. The
transformed preliminary ruling system also made
ECJ decisions enforceable, reducing a significant
political threat against the ECJ-noncompliance.
National courts became key intermediaries in the
EC legal system and a significant source of political leverage for the ECJ against national govemments (Alter, 1996; Weiler, 1994).
Although many legal scholars regard the
Court as a "motor of European integration" in the
early years, most observers consider the Court's
political impact to have been rather marginal in
the 1960s and 1970s. As many have pointed out,
without the direct effect and supremacy of Community law, the EC legal system would have remained remote to European citizens and European
politics, and many violations of European law
would have remained unaddressed. Thus the
Court's jurisprudence in the 1960s transforming
the preliminary ruling system was very significant. But in the 1960s and 1970s ECJ decisions
tended to be more legally bold than politically
provocative, and the Court did not start to wield its

power to significantly influence national or EC

policy until the late 1970s and 1980s.
The Role of the Court in the EU
In today's EC legal system, the Court serves three
main functions: it helps ensure that EU institutions do not exceed their authority; it helps resolve
disputes between EU institutions and between
member states; and it helps to ensure national
compliance with EC law. In all of these roles, the
ECJ is the highest authority, and its decisions are
binding and final.
A check on EU institutions. The ECJ is the
constitutional court of the EU, reviewing the validity of EC laws and Commission decisions to
make sure that EU institutions do not violate
Community law or exceed their authority. Challenges to the validity of EC law and Commission
decisions can be raised in national courts and referred to the ECJ or brought to the Court through
"direct appeals" by individuals, member states, or
one of the EU institutions. There are many reasons
why an EC law or a Commission decision might
be found to be invalid. The law could be ultra
vires, exceeding the authority of the EC institutions under the treaties; the law could violate basic
rights guarantees of national constitutions or the
European Convention of Human Rights; or a
Commission decision could have lacked due
process or have been based on insufficient or incorrect information.
Dispute resolution between EU institutions
and member states. The European Court also

hears disputes among its constituent parts: the

member states and the different institutions of the
EU. Anational govemment or the Commission
can challenge a Council decision if it believes
that the decision was adopted under the wrong
voting rule or that policymaking in the area under
question is best handled at the level of the national, regional, or local govemment. In light of
amendments in the Treaty on European Union
(TEU), the European Parliament can now challenge the Council if it believes that its own prerogatives in the policymaking process have been
infringed.
Ensuring national compliance with European law. The Commission is the primary moni-

tor of member states' compliance with the treaty.

It gathers and investigates complaints from indi-

viduals, firms, and other member states and raises

infringement cases before the ECJ if it suspects a

European Court of Justiee (ECj)

violation of European law. Member states can also

raise infringement suits, but they usually let the
Commission pursue the issue.
In light of the ECJ's jurisprudence on the direct effect and supremacy of EC law, individuals
can also raise challenges in national courts to the
compatibility of nationallaw with European law.
Preliminary ruling references have been used
to challenge national policies that serve as barriers
to the free movement of goods, people, services,
and capital, such as health and safety rules designed primarily to keep out products produced in
other countries. Preliminary ruling references
have also been used to challenge national policies
that seemingly have little to do with the free
movement of goods, people, capital, or services.
For example, Irish student groups challenged an
Irish ban on the advertisement of abortion services, and the British Equal Opportunities Council
challenged British gender equality laws. Especially in cases such as these, the Court has been
accused of overstepping its authority and meddling in the affairs of member states.
The Role of the Court
in EU and National Polities

The ECJ is primarily a legal body. But in fulfilling

its legal mandate it inevitably plays a political role
and influences the process of European integration. Its influence extends both to EU policymaking and national politics.
At the EU level, the ECJ influences the rules
of the policymaking process and policy outcomes.
By resolving disputes about policymaking procedure, the Court influences the negotiation process,
allowing different institutions and member states
greater or lesser influence in decisionmaking. In
addition, when the Court decides on the validity of
an EU regulation or directive, it influences what
policies EU institutions can pass and how EU law
is interpreted and implemented. Usually the Court
becomes involved in EU policy issues when a national govemment, EU institution, or interest
group disagrees with an EU policy or, concemed
about its lack of influence over the policymaking
process, turns to the legal realm to challenge the
status quo. But the Court also engages in its own
activist policymaking, reading into the treaties
meanings that were not necessarily intended by
national govemments, in order to influence the
process of European integration (Rasmussen,
1986). For example, in its Cassis de Dijon deci-

193

sion the Court read into the treaty a requirement

for the mutual recognition of national health,
safety, and technical standards and provoked a
fundamental change in EU harrnonization policy
(Alter and Meunier-Aitsahalia, 1994).
At the national level, the ECJ has influenced
the domestic policy of member states in areas as diverse as educational policy, industrial relations,
gender equality, and the advertising of aborti on services. In these cases, the European legal system was
used by individuals and domestic groups to challenge national policies with which they disagreed,
in hopes of achieving policy outcomes that they had
faiIed to achieve through national channe1s.
There are of course limits to the role the
Court can play in the policymaking process. A significant limit comes from the nature of the legal
process itself. The Court must wait for cases to be
raised; thus it must wait to be invited into a policy
debate by anational govemment, European institution, individual litigant, or national court. The
Court must also stick to the legal method and the
language of law lest it undermine its legal legitimacy or lose the support of national courts
(Slaughter and Mattli, 1995). In addition, public
opinion and political concems also create limits
on what the Court can do. Although limits to judicial activism exist, the Court has shown itself
quite capable of acting independently and influencing policy at the EU and national levels. In
many respects, judicial politics is part of the EU
policymaking process, and the opinion of the ECJ
can be important in shaping policy outcomes.
Changes in the European Legal System
Sinee 7989

Since 1989, there has been aseries of changes in

the organization and functioning of the European
legal system. The most important institutional
changes were the creation of a Court of First Instance and the ECJ's acquisition of sanctioning
authority. On a political level, greater scrutiny of
the Court has led it to moderate some of its jurisprudence.
Creation of the Court of First Instanee. The
ECJ suggested the establishment of a lower European tribunal in the late 1970s to relieve the Court
of some of its caseload, especially ECSC cases
and personne1 disputes. It took a number of years
for member states to agree to create the Court of
First Instance, but by the late 1980s there was a
consensus that the Court of Justice was overbur-

194

European Currency Unit (KU)

dened. The Court of First Instance was established

in 1989; like the Court of Justice, it is composed
of a judge from each member state. Its jurisdiction
was extended in 1993 and 1994, so that now the
Court of First Instance he ars virtually all cases
brought by private individuals, with the important
exception of cases referred by national courts under the pre1iminary ruling procedure. The "direct
appeals" tend to involve fairly technical legal issues, including competition policy, antidumping
cases, and state aids.
Adding sanctioning power to the Court in
infringement cases. One of the greatest weaknesses of the original EC legal system was the
lack of sanctioning power for the Court and the
unenforceability of ECJ decisions. Transforrning
the pre1irninary ruling system he1ped address this
weakness by harnessing national courts to enforce
ECJ jurisprudence. In 1991 the ECJ won for the
EC legal system the right to provide remedies for
some violations of European law, declaring that
national courts could require compensation by the
national government for individuals hurt by a failure of anational government to implement EC directives punctually and properly (Franeovieh v.
Italy). As part of the TEU, the ECJ was also
granted authority to order fines against states in
infringement suits raised by the Commission or
other member states. With these changes, violating European law has become more costly, and the
ECJ has gained greater leverage to induce compliance with EC law.
Achanging political context. For many
years, the Court operated in astate of "benign neglect" by the public and by political bodies. Legal
representatives from member states monitored the
Court's activities, but seldom did ECJ decisions
arouse significant political or public passion. For a
number of reasons, the Court has become a focus
of attention by political bodies and public opinion,
leading to a significant change in the political climate in which the Court operates (Weiler, 1993).
National displeasure with the Court was shown
when it was excluded from the TEU's two intergovernmental pillars-the Common Foreign and
Security Policy and Cooperation on Justice and
Horne Affairs. Subsequently the Court was vilified
by the anti-TEU forces in Denmark and France
and by the Euroskeptics in Britain. It has even
been criticized by some of its traditional supporters, including the German government. There has
also been significant debate over whether the

Court's jurisdiction should be expanded to include

new intergovernmental agreements regarding a
Customs Information System, fraud against the
Community, and the European Police Office
(EUROPOL). Finally, the ECrs tendency toward
expanding EC authority at the expense of national
sovereignty has been criticized by the Court's crucial intermediaries-national courts. In light of
this criticism and the broader crisis of legitimacy
facing the EU, the Court has started to moderate
its jurisprudence. The ECJ still applies its established doctrine to cases but has started to find limits to EC authority in the national realm.
See also APPENDIX 1.
Bibliography
Alter, Karen. 1996. "The European Court's Political
Power: The Emergence of the European Court as an
Influential Political Actor in Europe." West European Politics 19, no. 3, pp. 458-487.
Alter, Karen, and Sophie Meunier-Aitsahalia. 1994. "Judicial Politics in the European Community: European Integration and the Pathbreaking Cassis de Dijon Decision," Comparative Political Studies 24, no.
4, pp. 535-561.
Burley, Anne-Marie, and Walter Mattli. 1993. "Europe
Before the Court." International Organization 47,
no. 1, pp. 41-76.
Cappelletti, Mauro. 1989. The Judicial Process in Comparative Perspective. Oxford: Clarendon Press.
Mancini, Federico. 1989. "The Making of a Constitution for Europe." Common Market Law Review 24,
pp. 595-614.
Rasmussen, Hjalte. 1986. On Law and Policy in the European Court of Justice. Dordrecht: Martinus
Nijhoff Publishers.
Slaughter, Anne-Marie, and Walter Mattli. 1995. "Law
and Politics in the European Union: A Reply to Garrett," International Organization 49, no. 1, pp.
183-190.
Weiler, Joseph. 1991. ''The Transformation of Europe."
Yale Law Journal 100, pp. 2403-2483.
- - - . 1993. "Joumey to an Unlmown Destination: A
Retrospective and Prospective of the European Court
of Justice in the Arena of Political Integration." Journal of Common Market Studies 31, no. 4, pp.
417-446.
- - - . 1994. "A Quiet Revolution: The European
Court of Justice and Its Interlocutors." Comparative
Political Studies 26, no. 4, pp. 510-534.

-Karen J. Alter

European Currency Unlt (ECU)

SeeEcu.

European Defense Community (EDC)

European Defense Communlty

(EDC)
On lune 25, 1950, North Korean forces invaded
South Korea. The attack was perceived in the West
as a possible precursor to a Soviet attack on Western Europe. In this situation the issue arose of the
reservoir of man power available in the Federal
Republic of Germany for western defense. The
question was how to utilize this reserve, just five
years after the defeat of Germany in May 1945.
The answer proposed by the French prime minister, Rene Pleven, to the French National Assembly
on October 24, 1950, was a solution modeled on
the earlier Schuman Plan for a coal and steel community. Pleven was clear that the new European
army was not to be a traditional coalition but
would instead involve a fusion of forces and
equipment under a European political authority
(the putative European Political Community), although he was careful to add that member states
would retain control of their forces not integrated
into the European army.
The announcement came against a background of two conflicting pressures: the adamant
view of a clear majority in France and elsewhere
against German rearmament and the reaction to
Korea. Although the political debate became torrid, the European Defense Community (EDC)
treaty was signed on May 27, 1952, by the six European Coal and Steel Community (ECSC) member states (France, Germany, Italy, Belgium, the
Netherlands, and Luxembourg). It consisted of
132 articles and 12 associated protocols as weIl as
a number of declarations and conventions, principally concerning reciprocal security guarantees
and cooperation arrangements between the EDC
and NATO and among Britain, the United States,
and the EDC. The treaty defined the EDC as a
supranational community, with common institutions, armed forces, and budget. The EDC was
supranational because its decisions (some of
which could be taken by a majority vote) would be
binding and because the treaty envisaged the fusion of forces, not just their coordination.
The EDC had an exclusively defensive remit,
was to be within the NATO framework, and would
operate on the basis that an attack on one member
state constituted an attack on all. NATO's supreme
commander in Europe would supervise the organization, equipping, and instruction of the force.
Member states would be able to retain national
forces for overseas defense and international mis-

195

sions. The institutional system consisted of a

council, composed of a representative from each
participating states' government, which was to
oversee the actions of a board of commissioners
and the member states. Voting in the council was
to be weighted to reflect the military contributions
made by the states. The Board of Commissioners,
consisting of nine members, was to be the EDC's
executive organ.
InitiaIly, the EDC Assembly was to be shared
with that of the ECSC, although France, Germany, and Italy would have three additional
members each. The assembly could force the
board's resignation by a two-thirds majority. According to Article 38 of the treaty, the assembly
was also to "examine problems arising from the
co-existence of different agencies for European
cooperation ... with a view to ensuring coordination within the framework of the federal or confederal structure."
The basic military units would be composed
of troops of the same national origin, who would
depend on supranational echelons to fulfiIllogistical functions. The general staff would be integrated. EventuaIly the board was to take over recruiting, the formulation of a common doctrine,
plans for mobilization, and the territorial distribution of forces, but aIl within a NATO framework.
The board was to prepare common equipment and
infrastructure programs as weIl as authorizing the
import and export of war materials, although Germany had to accept continuing restrictions on the
production of certain weapons. The treaty was to
last fifty years and to cover the European territory
of the member states only, although its forces
might be used to defend the European territory of
non-EDC but NATO members.
French une ase continued to grow after the
treaty was signed. There were fears about German
preponderance and German rearmament, about the
apparent abandonment of France's own national
forces, and the ability of the new European defense
force to deter or stop a Soviet attack. There was
also concern that, despite a gradual firming up of
British and V.S. commitments, these assurances
did not go beyond existing obligations and did not
answer the fears about German revanchism. In addition, the French were increasingly preoccupied
with events in Indochina, suffering a decisive defeat at Dien Bien Phu in May 1954. It was feared
that the EDC would dilute French ability to fight
elsewhere for their overseas territories. The French

196

European Defense Industry Group (WIG)

government's attempts to meet these criticisms by

proposing additional protocols to the treaty that
would in effect have allowed France to retain a national army were rejected by its partners.
Ratification of the treaty proved controversial
in most member states. Whereas the Dutch would
have preferred a NATO solution, they accepted
that France would only allow German rearmament
on the basis of an integrated European army. In
Germany, the opposition Social Democratic Party
(SPD) argued that Germany was not being treated
as a genuinely equal partner. The SPD also feared
the EDC's impact on German unification, and its
members were anxious about the political implications of rearmament in Germany itself. There
were additional questions as to whether the EDC
was compatible with the German Basic Law (constitution). The chancellor, Konrad Adenauer, only
gained a sufficient majority after elections in September 1953 to change the Basic Law and secure
ratification. He saw German membership in the
EDC as a way to avoid German neutralization or
incorporation into the Soviet bloc. Membership
would also have the advantage of easing historic
Franco-German tensions and achieving full equality for Germany.
There were a number of difficulties in Italy,
where a ratification bill passed the relevant parliamentary committees but had not been sent to the
full chamber before events in France rendered the
issue moot. The decisive French vote took place in
the National Assembly in August 1954, on a procedural motion that the occasion was not appropriate for debate and that the proposed treaty be
rejected without further consideration. The EDC
mustered 264 supporters, but 319 opposed, 12 abstained, and a further 31 deputies (including 23
members of the government) took no part in the
vote. All the Communists voted against the EDC,
as did all but 2 of the Gaullists (1 also abstained).
Only the Movement Republicain Populaire voted
solidly for (albeit with 2 against and 4 abstentions). Other parties were about equally divided.
Yet the fundamental question of German
rearmament remained unresolved. It was the
British who salvaged the situation, convening a
conference that led to the Paris agreements of October 1954. By these agreements Italy and Germany joined the Western European Union (WEU),
which was integrated militarily into the NATO
framework. At the same time a sovereign Germany joined NATO, although the WEU was to en-

sure that Germany did not produce certain categories of armaments. A further gesture to reassure
those anxious about German rearmament was
Britain's agreement to maintain specified military
forces on the European mainland and to allow the
WEU a role in determining whether they could be
withdrawn from there.
With the collapse of the EDC, hopes for an
overarching European Political Community collapsed too, and aspirations to build a federal or
confederal structure had to be put into abeyance.
For that reason, the collapse of the EDC was
widely seen as a serious setback for European integration.
See also NORTH ATLANTIC TREATY ORGANIZA3.

nON; WESTERN EUROPEAN UNION; APPENDIX

Bibliography

Fursdon, Edward. 1980. The European Defense Community: A History. London: Macmillan.
Lerner, Daniel, and Raymond Aron, eds. 1957. France
Defeats EDC. New York: Praeger.

-Trevor C. Salmon

European Defense Industry

Group (EDIG)
The European Defense Industry Group (EDIG) is
an interest group representing defense contractors
in the EU. Although defense is not an EU competence, greater economic integration and the possible development of an EU defense policy greatly
interest European armaments manufacturers, not
least at a time of defense expenditure cutbacks.
The group is dominated by British, French, and
German manufacturers and united by a mutual
concern about competition from the United States.

European Development
Fund (EDF)
The European Development Fund (EDF) is used
to finance EU aid to the African, Caribbean, and
Pacific countries that are signatories of the Lome
convention. Because the member states are also
signatories of the convention in their own right
and want to control spending as much as possible,
the EDF is not included in the development cooperation section of the EU's general budget (much
to the European Parliament's chagrin).
See also LOME CONVENTION.

Europeon Economic Area (EEA)

European Economlc Area (EEA)

The European Economic Area (EEA) extends the
EC's single market to three countries of the European Free Trade Association (EFTA): Iceland,
Liechtenstein, and Norway. The EEA is only concemed with the EC, the first pillar of the EU, and
does not extend to the EU's Common Foreign and
Security Policy and Cooperation on Justice and
Horne Affairs. The EEA agreement, which was
signed in Oporto, Portugal, on May 2, 1992, and
came into effect on January 1, 1994, established the
largest integrated economic zone in the world, covering 370 million people in eighteen countries.
Since 1994 the EEA has facilitated the smooth transition of Austria, Finland, and Sweden (former
EFTA countries) to full EU membership and provided Iceland, Liechtenstein, and Norway open access to their most important market (the EC) without requiring them to take the politically impossible
step of joining the EU. The present organization,
however, falls short of the original vision.
Background
The accession to the EC of Britain, Denmark, and
Ireland in 1973 prompted the remaining EFTA
countries-Austria, Iceland, Norway, Portugal,
Sweden, and Switzerland-to negotiate bilateral
free trade agreements (FTAs) with the EC. The
FTAs created a successful sixteen-nation free
trade area by eliminating tariffs on industrial
goods and some processed agricultural products
(Pedersen, 1991). Their scope, however, was limited, and by the early 1980s both the EC and
EFTA were ready to expand their re1ationship.
In April 1984, the EC and EFTA issued a
joint declaration in Luxembourg committing the
two organizations to increased cooperation with a
view to creating a European Economic Space (re-designated "Area" in 1990). EFTA's interest in
closer EC ties increased with the Community's
launch of the single market project in 1985, but
the "Luxembourg process" proved inadequate to
meet the EFTA countries' need for a permanent,
dynamic, and wide-ranging re1ationship with the
newly energized EC (Wallace, 1988; Wallace and
Wesseis, 1991; Hegg, 1993). The EC too wanted
to expand the dialogue with its EFTA partners, if
only to delay their likely applications for EC
membership. In January 1989, Commission president Jacques Delors invited EFTA to negotiate
with the EC a more extensive and structured partnership. Two months later EFTA accepted Delors'

197

invitation, thus launching the "Delors-Oslo

process" that eventually led to the 1992 EEA
Agreement.
The negotiation and enactment of the EEA
Agreement proved difficult (Danspeckgruber,
1992; Hegg, 1993; Sreter, 1993; Reinisch, 1993).
First, the EC and EFTA came into the negotiations
with divergent objectives. The EC wanted integration with EFTA countries as long as it did not require changes to existing EC law, extensive exceptions and derogations tailored to the needs of
specific EFTA countries, or substantial EFTA participation in EC decisionmaking. EFTA, on the
other hand, wanted the EC to adjust to individual
national needs and to grant EFTA countries full
participation in the govemance of areas covered
by the EEA. This basic dispute was settled largely
in the EC's favor, with EFTA assigned a marginal
role in decisionmaking. Second, the negotiations
required EFTA to forge a common position before
bargaining with the Commission. EFTA had never
before negotiated on behalf of its members and
sometimes found it difficult to find a single voice.
This led to the third difficulty: the presence of parallel bilateral negotiations between individual
EFTA members and the Ee. These negotiations
over transit, fish, and other issues on which EFTA
did not take a common position only complicated
the proceedings. Fourth, the European Court of
Justice (ECJ) objected to the draft treaty in 1991
because the proposed EEA court would have superseded the ECJ, requiring unacceptable changes
in the Treaties of Rome. This forced arevision of
the EEA agreement in early 1992 to satisfy the
ECrs concems. Finally, the Swiss failed to ratify
the EEA agreement after a referendum on December, 6, 1992, resulted in a narrow majority against.
The Swiss defection forced the renegotiation of
certain parts of the agreement and delayed implementation until January 1994 (Nell, 1994).
The EEA Agreement
The EEA agreement extends the four freedoms of
the single market program-the free movement of
goods, services, capital, and persons-to the three
contracting EFTA countries. To ensure that mIes
goveming the enlarged market were identical in
content and interpretation (i.e., "homogeneous"),
the agreement required EFTA countries to adopt
wholesale the relevant portions of the EC's acquis
communautaire and associated case law. Specifically, this meant that the EFTA countries (1) ac-

198

European Economic Area (EEA)

cepted articles of the EEC treaty goveming the

single market by writing them into the EEA agreement, (2) adopted approximately fourteen hundred
Community acts listed in annexes to the EEA
agreement, (3) rewrote their own domestic legislati on to incorporate Community law, and (4)
agreed to abide by previous ECJ interpretations of
Community law (Reinisch, 1993). In short, the
EFrA countries agreed to bear the heaviest burden
of adjustment in creating the enlarged European
market.
Detailed mIes implementing the four freedoms are at the heart of the EEA agreement. First,
duty-free trade in industrial goods, the primary accomplishment of the FrAs, continues in the EEA
under simplified mIes of origin. In addition the
EEA reduces technical barriers to trade. State aid
to industry, for instance, is prohibited if it distorts
competition; public sector contracts must be open
to competitive bid from companies in all EEA
countries; and common product standards are accepted throughout the EEA. A safeguard clause,
however, is included in the agreement that allows
a party to suspend a specific treaty obligation for a
limited time to alleviate a serious economic, social, or environmental problem. Second, trade in
services-including road, rail, air, and maritime
transport; financial services (banking, insurance,
and securities trading); telecommunications; and
television-is also liberalized by the EEA agreement. The key principle governing services is the
right of establishment: EEA companies have the
right to offer their services or establish a branch
anywhere covered by the agreement. Third, almost all restrictions on capital movements have
been eliminated. EEA govemments may still grant
concessions as a means of controlling their natural
resources, such as waterfalls and offshore petroleum deposits (a major point of contention for
Norway), but must treat all EEA companies as domestic applicants. Fourth, the agreement guarantees free movement of people by allowing those
looking for work to remain in an EEA country
when they find employment. The agreement also
provides for mutual recognition of diplomas and
other formal qualifications for work. Finally, the
EEA goes beyond the four freedoms by incorporating several "horizontal provisions." For exampIe, much EC law regarding social policy, consumer protection, environmental policy, the
establishment of corporate enterprises (company
law), and the compiling of economic statistics is

included. Moreover, the agreement contains measures to facilitate greater cooperation in education,
training, research and development, tourism, and
disaster preparedness (Reinisch, 1993).
Through the EEA agreement, the EFrA signatories participate in most of the EU's single
market, but not all of it. Most notably, EFrA
countries do not participate in the Common Agricultural Policy, nor does the EEA cover trade in all
agricultural goods. Some markets for agricultural
products, particularly processed foods, are liberalized by the agreement, but no comprehensive approach is attempted. The EEA represents some
liberalization of trade in fish and fish products,
and efforts continue in this direction, but no comprehensive fisheries or fish trade policies are envisioned in the near future owing to the political
sensitivity of these sectors in Iceland and Norway.
Tax harmonization and monetary policy also remain outside the EEA agreement. Furthermore,
extemal trade policy escapes EEA govemance because EFrA and the EU have formed a glorified
free trade area, not a customs union with a common extemal tariff that would require a common
stance toward third countries. Thus, while comprehensive, the agreement does not cover sensitive
areas in which EFrA countries still guard their
sovereignty.
The EEA agreement achieved "homogeneity"
by adopting most of the EC's existing single market legislation. But both EFrA and the EC also
wanted a dynarnic area--one that could incorporate new integrative policies. As the EC was the
recognized engine of economic integration, the
question was how to incorporate EFrA countries
into the EC's decisionmaking process. The EFrA
countries wanted equal participation; what they
received was the right to be consulted in the early
stages of policy formation but no formal role until
after the EC had taken adecision. Once the EC decides, the EFTA countries, speaking with one
voice, must accept the new policy, win agreement
on a compromise, or reject the policy and risk suspension of sections of the EEA agreement (Reymond, 1993). The result was less than satisfactory
for EFrA countries, contributing to the decision
by the majority of them to apply for outright EC
membership before completing the EEA negotiations.
The institutions of the EEA give the organization a supranational appearance, though this
now seems more cosmetic than real. At the highest

European Economic Area (EEA)

level stands the EEA Council, composed of representatives of the EC member states, the Commission, and the EFfA member states. It meets twice
a year and functions primarily as the EEA's political rudder. The Joint Committee is the main legislative and administrative body. Its several tasks
indude exchanging views and information on current and pending EEA law, transforming new EC
law into EEA law, overseeing the implementation
and operation of the EEA agreement, and settling
disputes between the EC and EFfA (Reinisch,
1993). The committee meets at least once a month
and is composed of high-level representatives of
member states. In decisionmaking, the EC and
EFfA must each speak with one voice, and decisions must be unanimous. The agreement also
calls for the establishment of an EEA joint parliamentary committee (composed of members of the
European Parliament and the parliarnents of the
EFfA states) and an EEA consultative committee
(composed of representatives of the social partners). Neither institution has any genuine decisionmaking power.
The one institution that could have given the
EEA a true supranational character was the proposed EEA court. But the ECJ objected to the
court precisely because of its ability to question
ECJ decisions. Accordingly, relations between
EFfA and the EC are now based more on traditions of internationallaw that emphasize interstate
bargaining rather than supranational decisionmaking. Therefore, to assure compliance with its EEA
commitments, EFfA, by separate agreement, has
had to further institutionalize its relations. First, it
has created a European Surveillance Authority
(ESA) to oversee competition policy in its three
EEA countries. Second, it has created an EFfA
court to enforce EEA treaty obligations within
EFfA. Again, disputes arising between EFfA and
the EC must be settled politically in the EEA Joint
Committee or the EEA Council.

Conclusion
The EEA has worked reasonably well for the parties involved, but it is certainly far from what European leaders originally envisioned. From the
EU's perspective, the EEA lost its raison d'etre
when Switzerland rejected the agreement and
Austria, FinIand, and Sweden joined the EU. The
EEA performed a valuable service by preparing
the way for Nordic and Alpine accession, but now
it is little more than a minor economic arrange-

1 99

ment with three rather quirky nations who cannot

or will not become EU member states. As a consequence, the EC has downgraded its political participation in the EEA Council, to the displeasure
of the EFfA countries.
From EFfA's point of view, the EEA is a necessary disappointment. The EFfA countries need
the single market but have very little ability to influence policymaking in Brusse1s. With only three
small countries in its EFfA pillar, the EEA has for
all practical purposes (although not in a legal
sense) ceased to function as a multilateral organization and instead provides a forum for bilateral
relations between the EC and each EFfA country.
Moreover, far from being attractive to other countries seeking a stepping-stone to EC membership,
as some envisioned (Peers, 1995), the EEA has
become a European backwater that no country is
eager to join.
Can the EEA survive? It will for the time being because the EFfA countries depend on it for
their participation in the single market. The real
question is how long democratic countries can accept rules coming from Brussels without their
genuine participation in the decisionmaking
process. At the heart of the EEA lies a democratic
deficit that perhaps only EU membership can
erase.
See also EUROPEAN FREE TRADE ASSOCIATION.

Bibliography
Danspeckgruber, Wolfgang. 1992. "The European Economic Area, the Neutrals, and an Emerging Architecture." In Gregory F. Treverton, ed., The Shape 0/
the New Europe. New York: Council on Foreign Relations Press.
Hegg, Han WesseI. 1993. "Negotiating the European
Economic Area Agreement." In Brent F. NeIsen, ed.,
Norway and the European Community: The Political
Economy 0/ Integration. Westport, CT: Praeger.
NeU, Philippe G. 1994. "Rules of Origin: Problems and
Solutions to the Swiss Non-Participation in the European Economic Area." Journal 01 World Trade 28,
no. 6, pp. 65-82.
Pedersen, Thomas. 1991. "EC-EFTA Relations: An Historical OutIine." In Helen Wallace, ed., The Wider
Western Europe: Reshaping the ECIEFTA Relationship. London: Pinter.
Peers, Steve. 1995. "An Ever Closer Waiting Room?
The Case for Eastern European Accession to the European Economic Area." Common Market Law Review 32, pp. 187-213.
Reinisch, August. 1993. "The European Economic
Area." The Journal 0/ Social, Political and Economic Studies 18, no. 3, pp. 279-309.

200

European Economic Community (EEC)

Reymond, Christophe. 1993. "Institutions, DeeisionMaking Proeedure and Settlement of Disputes in the
European Eeonomie Area." Common Market Law
Review 30, pp. 449--480.
Sreter, Martin. 1993. "Norwegian Integration Poliey in a
Changing World: The Primaey of Seeurity." In Brent
F. Nelsen, ed., Norway and the European Community: The Political Economy oi Integration. Westport,
CT: Praeger.
Wallaee, Helen. 1988. "Introduetory Report." In J. Jamar and H. Wallaee, eds., EEC-EFTA: More Than
lust Good Friends? Bruges: De Tempel.
Wallaee, Helen, and Wolfgang WesseIs. 1991. "Introduetion." In Helen Wallaee, ed., The Wider Western
Europe: Reshaping the EC/EFTA Relationship. London: Pinter.

-Brent F. Nelsen

European Economlc
Communlty (EEC)
The European Economic Community (EEC) is
popularly known as the European Community
(EC). It was established on March 25, 1957, by
the Treaty of Rome, and began operating on January 1, 1958. The EEC is the most important and
far reaching of the three European Communities-the other two are the European Coal and
Steel Community (ECSC) and the European
Atomic Energy Community (EURATOM). Since
November 1993, when the Treaty on European
Union (TEU) came into force, the EC is the official name for the three Communities and makes
up the first pillar of the European Union (EU).
Nevertheless, the EC still refers unofficially to the
EEC alone.
See also EUROPEAN COMMUNITY.

operation set by the EU and must register and

publish their organization in the Official Journal
ofthe European Communities.

European Economlc Space

See EUROPEAN ECONOMIC AREA.

European Economlc
Stability Pact
See

STABILITY AND GROWTH PACT.

European Electrotechnlcal
Standards Commlttee
(CENELEC)
The European Electrotechnical Standards Committee (CENELEC) is the counterpart of the Europe an Standards Committee (CEN) that deals
specifically with electrotechnical standards, both
voluntary standards and those required to demonstrate compliance with EC directives (e.g., on
electromagnetic compatibility). Members of
CENELEC are the national electrotechnical committees in charge of standardization within the EU
member states plus Norway, Iceland, and Switzerland; these committees are in turn composed of
representatives from national industry. CENELEC
maintains elose liaison with the global International Electrotechnical Committee (1EC) as well
as electrotechnical committees in Central and
Eastern Europe and Turkey in developing European Norms (ENs) to be applied through the European Economic Area (EEA).
See also EUROPEAN STANDARDS COMMITTEE;
REGULATORY POLICY; SINGLE MARKET PROGRAM;

European Economlc Interest

Grouplng (EEIG)
A European Economic Interest Grouping (EEIG)
is a legal entity created to accommodate fmns or
other associations wanting to pool their resources
for a common goal but not wanting to merge (Airbus is perhaps the best-known example). Some
trade associations have also applied for recognition as an EEIG. The EU encourages EEIGs as
part of its single market strategy, airned at increasing the competitiveness of European firms by allowing them to become larger and more efficient.
EEIGs are bound to the terms of organization and

STANDARDS AND CONFORMITY ASSESSMENT.

European Employment
Services (EURES)
As part of a continuing EU effort to promote employment, in 1996 the Commission launched the
European Employment Services (EURES), a computer network that provides access to three services: a database of job vacancies throughout the
EU, a database of general information on living
and working conditions in participating countries
(members of the European Economic Area), and
an electronic mail system for rapid and easy com-

European Free Trade Association (EFTA)

munication. EURES succeeds SEDOC, the European System for the International Clearing of Vacancies and Applications for Employment.

European Environment
Agency (EEA)
In May 1990 the EC created a European Environment Agency (EEA) to collect and disseminate information on the environment, thereby partially
filling the information gap that has plagued EC efforts to formulate and enforce environmental policy. A dispute over the siting of European agencies
delayed establishment of the EEA until October
1993, when it opened in Copenhagen. The EEA's
work covers air quality and atmospheric emissions; water quality and resources; the state of the
soil, flora, and fauna; land use and natural resources; waste management; noise emissions; environmentally hazardous chemicals; and coastal
protection. An executive director is responsible for
the everyday operations of the agency, and a management board (consisting of one representative
from each of the EU's member states, two senior
Commission officials, and two scientists designated by the European Parliament) oversees the
agency's activities. At the end of 1994 the management board appointed five European Topic
Centers (ETCs) to coordinate information on air
quality, air emissions, inland waters, nature conservation, and marine/coastal issues. A scientific
comrnittee, composed of two representatives from
each member state, scrutinizes the EEA's reports.
The EEA has no enforcement powers and can only
report cases of noncompliance and violation of
EU environmental policy to the Comrnission. Although the EEA is an EU agency, membership is
not limited to EU member states: Norway, Iceland, and a number of Central and Eastern European countries are also members.
See also ENVIRONMENTAL POLICY.

European Free Trade

Associatlon (EFTA)
In the early 1960s it was often said that Europe
was "at sixes and sevens." "Sixes" referred to the
EEC, which had six member states, and "sevens"
referred to the European Free Trade Association
(EFfA), with its seven member states. The term
not only made a clever numerical distinction be-

201

tween the two recently established organizations

but also indicated a degree of competition and
conflict between them.
During the Messina conference in 1955 the
UK had proposed establishing a free trade association instead of the putative EEC. The British preferred a limited, intergovernmental free trade area
rather than a comprehensive, supranational Community and feared that the EEC would be protectionist and damaging to nonmember state interests. Some Scandinavian countries as weIl as
neutral Austria and Switzerland favored Britain's
approach. But the six persevered with their negotiations and launched the EEC in 1958.
Britain nevertheless pressed ahead with the
idea of a free trade area that would incorporate
and possibly supplant the new Community. Having decided not to pursue EC membership, the
British sought instead to enjoy the benefits of free
trade in Europe while eschewing a common external tariff, a common agricultural policy, and any
form of economic integration. French president
Charles de Gaulle especially disliked the implications of Britain's proposal for agriculture, a sector
specifically excluded from the proposed free trade
area. Although talks about a possible free trade
area to include the six and the other Western European countries had continued since the second
half of 1956, de Gaulle brought them to an abrupt
end in November 1958, soon after coming to
power. Undaunted, in 1960 Britain formed the European Free Trade Association with Austria, Denmark, Norway, Portugal, Sweden, and Switzerland.
Using a small secretariat in Geneva and occasional ministerial meetings, EFTA restricted its
activities solely to promoting free trade among its
member states. By contrast, the Community established a customs union, a common external tariff,
and a Common Agricultural Policy (CAP). In the
early 1960s and 1970s the EC negotiated trade
agreements with each of the EFfA countries, and
the relationship between both organizations became cooperative and harmonious. After all, the
member states of both organizations continued to
trade actively with each other.
Paradoxically, it was Britain, EFfA's instigator, that almost immediate1y broke ranks and applied to join the EC in 1961. Prime Minister
Harold Macmillan advocated Britain's accession
to the Treaty of Rome for negative rather than pos-

202

European Information Centers (EICs)

itive reasons. By the end of the 1950s, Macmillan

grasped that EFfA and the British Commonwealth were inadequate vehicles for promoting
British influence and prosperity in the world. He
saw EC membership as the only response to
Britain's declining economic position. Denmark,
economically dependent on Britain, followed suit
and also applied to join the EC. Both countries
eventually did so in 1973.
The remaining EFfA member states (later increased in number by the accession of Iceland,
Finland, and Liechtenstein) were content to remain outside the EC, although the EC-EFfA Luxembourg Declaration of 1984 stressed both sides'
interest in developing closer relations. The success
of the single market program in the late 1980s
gave added impetus to the Luxembourg Declaration, as EFfA member states feared that they
would be blocked out of the EC's expanded, frontier-free market. At the same time, reform and revolution in Central and Eastern Europe brought the
Cold War to an abrupt end and opened the way for
the neutrals to apply for EC membership. Attracted by the single market and unencumbered by
the Cold War conception of neutrality, Austria
submitted an application in July 1989. Sweden,
Finland, and Switzerland followed suit over the
next three years.
The EC was simultaneously flattered and
alarrned by the prospect of so many new applicants, espeeially as the single market had not been
completed and the Treaty on European Union was
still under negotiation. In an effort to ward off
EFfA applieants for EC membership, at least for a
few years, and at the same time extend the benefits
of the single market to the wealthy EFfA countries, the EC proposed a joint EC-EFfA European
Economic Space, later called the European Economic Area (EEA).
Negotiations for an EEA treaty began in June
1990 and ended in Oetober 1991. The three most
contentious issues, unresolved until the last moment, were fishing rights, Alpine trucking rights,
and a cohesion fund for the EC's poorer members
to eompensate for better EFfA aceess to EC markets. To everyone's surprise, the EC's Court of
Justice rejected the EEA treaty in Deeember 1991
on the grounds that the proposed EC-EFfA tribunal to adjudicate EEA-related disputes was ineompatible with the Treaty of Rome. After hasty
EC-EFfA renegotiations in early 1992, the Court

removed its objections. That left the EC and EFfA

member states free to ratify the EEA treaty so that
it could come into force in January 1993, simultaneously with the single market.
1\vo years later, on January 1, 1995, Austria,
Finland, and Sweden joined the European Union,
thus making the EEA virtually meaningless and
reducing EFfA's ranks to three eountries: Iceland,
Liechtenstein, and Switzerland.
See also EUROPEAN EcONOMIC AREA.

European Information
Centers (EICs)
The Commission established a network of European Information Centers (EICs) in 1987 to help
small and medium-sized enterprises (SMEs) acquire information on the single market program
(notablyon public procurement, marketing, and
standardization). EICs also provide information
on EU programs, arranged in five categories:
struetural funds, the environment, training, research and development, and the information society. Information on external relations is organized
by geographical area. There are nearly three hundred EICs throughout Europe, the vast majority of
which are in the EU itself. Many EICs have some
form of a subnetwork, thereby multiplying the
points of contaet for information on the EU. All
together, EICs provide information to around
300,000 firms.

European Investment
Bank (EIB)
The European Investment Bank (EI) is an autonomous financial body within the EU. 1\vo faetors highlight the importance as well as the mystery surrounding its operations. First, the EI
finances a sizable part of the European integration
effort. In 1996, the EI approved ECU 23.2 billion worth of loans, a figure that exeeeds the
yearly prograrnmed average disbursements for EU
structural operations financed from the EU budget
over the period 1993 to 1999. Indeed, the EI has
beeome the largest multilateral disburser of loans,
its yearly lending volume exceeding that of the
World Bank sinee 1993. Second, the EI stands
virtually alone among EU institutions in forging
direet eontaet with eeonomie agents operating in
the EU, in both the public and private sectors: al-

European Investment ank (EI)

most everything else the EU does relies on the intermediation of agencies of the member states.
The EIB is a telling hieroglyph of Europe's
constitution. EU finances, whether on or off budget, have always been and continue to be strictly
controlled by the member states. The EIB started
its career as an ancillary institution whose statute
is a protocol mandated by Part Three, Title IV
(Artieles 129-130) of the Treaty of Rome. It graduated to the status of an EU institution approximately equal in rank with the Council, Commission, and the European Parliament (EP) in the
Treaty on European Union (TEU), at least with respect to textual placement alongside them in Part
Five, Title I (Chapter 5, Artieles 198d-198e). Despite this, the EIB is "owned" by the member
states, in the sense that they contribute the capital
subscriptions that allow it to function. Reflecting
this reality, the bank's goveming bodies are appointees of the member states' central govemments. A board of govemors (composed of the finance ministers of the member states) exercises
general supervision and sets overall policy. The
board of directors, again appointed by national
govemments, formally approves loans and other
activities prepared by the bank's management
committee (comprising a president and seven vice
presidents and invariably ineluding large-memberstate representatives). Directors are in most cases
civil servants, although several, drawn entirely
from the large member states, have banking experience at the senior management level.
Still, the EIB has a very large dose of autonomy in decisionmaking, reinforced by generous
endowments of capital and further enhanced by a
high gearing ratio of loans to subscribed capital.
The institution was meant to conform to the basic
integrated market design of the EEC. An enduring
culture of restraint with respect to direct political
intervention by member states is a legacy of the
original concrete aim of the bank to create a nongrant, technically justifiable supplement to development funds for areas of the Community that
could not otherwise attract capital. Though exceptions exist, the EIB is no capital trough for politically motivated and econornically unworthy projects.
Two analytically separable but intimately related developments sustain the bank's autonomy.
The first is the bank's success rate. The EIB never
provides full financing but usually takes a stake in

203

the range of 30 to 40 percent of the total project

cost. Most projects are proposed to the bank at an
advanced stage of development, only after having
attracted some other form of finance. Consequently, loan volume in excess of ECU 80 billion
has supported projects worth over ECU 250 billion between 1991 and 1995 (5 percent of total
gross fixed capital formation in the EU during that
period). Yet there have been virtually no outright
defaults, though some payment schedules have
been renegotiated, even as the public sector share
of EIB lending-and therefore the amount secured by sovereign cover-plunged from nearly
80 percent to elose to 40 percent of loan volume.
This rnight be interpreted as evidence of excessive
risk averseness of bank management, but it is just
as easily attributable to the checks and balances at
work in the loan appraisal process.
A tripartite synergy involving the interaction
between geographically oriented lending directorates, the functionally oriented economic studies
directorate, and the Technical Advisory Service
(TAS), whose staff are engineers with a minimum
of ten years prior experience, also contributes to
the ank's autonomy. The chemistry that has developed between the three EIB subcultures associated with these functions contributes to the success of projects while at the same time conferring
a kind of "Good Housekeeping seal of approval"
upon the borrowers, a demonstrable if intangible
value added when compared to the commercial
banking sector. These synergies redounded to the
EIB's own borrowing success. Its bonds invariably
have the highest ratings and correspondingly the
lowest interest, a fact that gives the EI a small
price advantage over commercialloans that can be
passed along to borrowers. Taken together, these
elements have produced a virtuous cirele that lend
such prestige to the bank that, aside from exceptional situations, heavy-handed political interventions by national govemments would be easy to
resist. The three subcultures will probably persist
despite the 1995 organizational reform that
merged the econornic studies directorate and the
TAS in a new projects directorate.
Nevertheless the EIB is and must be responsive to political direction. After all, the EIB was
founded to advance the airns of regional integration
in Europe. It would be surprising if the development and refinement of these aims were not reflected in its operations. Lending criteria evolved

204

European Investment Bank (ElB)

incrementally in response to specific loan demand

but also in response to the evolving legal and political situation in the Community. The main channe1s
are the Commission, the member states (through
the system of vice presidents), and the EP.
The EIB's position in relation to the EU has
been designed for operational autonomy within a
general legal framework. The bank's board of govemors has the authority to decide on new lending
operations within the EU. When operating outside
of the EU in support of EU development and cooperation policies, however, the EIB acts on new
mandates from the Council of Econornic and Finance Ministers (ECOFIN), whose legal bases originate in decisions taken by the Council and the EP.
The Commission is represented on the bank's
board of directors, and the two institutions have
developed an intensive dialogue, conducted on the
Comrnission's part by way of an interagency
process led by directorate-general (DG) 11 (econornic and financial affairs). Other important DGs
in the process are development (VIII), environment (XI), regional policy (XVI), and industry
(ill). Relations with the EP are more distant and
somewhat more contentious, as the EU budget
functions at least implicitly as security for loan
guarantees issued by the bank. The EIB is bound
to safeguard its autonomy, whereas some in the
EP insist on a general political oversight role.
Political interest of another kind also plays a
role in EIB operations, as some vestiges of member-state influence remain, at least for the big
states. This is manifested in the collegiality of the
management committee, a practice that dirninishes the effectiveness of assigning spheres of responsibility to individual vice presidents. A fully
professionalized institution would more like1y assign executive responsibility for specific departments to the vice presidents, thus integrating them
into the structure of the organization. Though superficially like the Commission, a body that is
also appointed and collegial, in reality this practice encourages national preference.
Regional development was the bank's first focus, though employment and support of the single
market were not far behind. In 1984 the bank
added environmental modernization as an explicit
lending criterion. A variety of instruments has
been developed to carry out policy. Global
loans-EIB credit tranches provided to other financial intermediaries-were introduced to help
smaller firms and to contribute to job creation.

The accession of Spain, Portugal, and Greece to

the EC led to bank-supported Integrated Mediterranean Programs (a form of regional assistance)
and introduced a programming dimension to EID
operations. This dimension has been expanded
since 1990 to EU nonmembers through METAP, a
lending program oriented to the environment, and
new "horizontal" lending operations designed to
support the EU's new regional development goals
in the Mediterranean. The bank has also supported
EU deve10pment policy with lending to the
African, Caribbean, and Pacific countries with
which the EU has a development assistance program and since 1993 to countries in Asia and
Latin America. Furthermore, the EID contributes
to the EU's preaccession strategy for the countries
of Central and Eastem Europe. Nevertheless, the
volume of lending to projects located in non-EU
countries accounts for only 8 percent of the total,
although no predeterrnined ceiling has been set in
either absolute or percentage terms.
Rounding out the bank's operational profile
is the expertise (project appraisal) it provides to
developers whose projects, although not financed
by the EID, are deemed important to the integration project in general. Inc1uded under this category are appraisal of Cohesion Fund and TransEuropean Networks (TENs) projects, as weIl as
advice given on nuc1ear modemization projects
supported by European Atornic Energy Community (EURATOM) loans and other funds in Central and Eastem Europe. Moreover, in acknowledgment of its institutional conservatism, the EID
helped give birth to a sister agency, the European
Investment Fund (ElF), agreed to by the Council
in 1993 and launched in 1995 to support projects
whose risk profile the EID was unwilling to accommodate. The EID is a 40 percent shareholder
in the ElF; the chairman of the ElF supervisory
board is the president of the EID.
Last but in no way least, the EID also contributes to integration on the borrowing side, floating its own bonds denorninated in all of the EU's
fourteen separate currencies, thus assisting in the
maturation of local capital markets. In fact, some
80 to 85 percent of its issues are in EU currencies.
But the bank also borrows in other currencies, particularly the U.S. dollar and the Japanese yen.
Taken together, these practices make the bank one
of the world's leading benchmark borrowers, although it has also moved into structured issues in
recent years (EID, 1996a).

European Investment Bank (ElB)

Also worthy of mention in this context is the

bank's preparations for Stage 3 of econornic and
monetary union (the irrevocable fixing of exchange rates). Since the December 1995 Madrid
summit, the EI has been issuing promise payment in euros (the future single currency), whose
price will be fixed in terms of the currencies participating in the monetary union; the ecu-euro settlement will occur on a one-for-one basis. The first
issue of this kind was an ECU 500 million borrowing carrying a coupon of 6 percent. Thus, the
EI is already playing an important role in underpinning Stage 3 (EI, 1996b).
Gradually, EI operations were expected to
conform with current and (in light of investment
time horizons) anticipated EU policy. Especially
after the ratification of the Single European Act
(SEA), EU environmental and procurement legislation found its way into the loan appraisal
process and the TAS staff increased correspondingly, for the bank's engineers were tasked with
assuring compliance with standards in these areas.
ecause the engineers in most cases visited the
project sites, they developed an unparalleied familiarity with the sec tors in which the bank does
most of its business: infrastructure for transport,
energy, and communications; energy systems; and
parts of manufacturing industry (e.g., petrochernicals). Staff expertise (in econornic analysis and financing as weIl as in engineering) has given the
bank a certain leverage over borrowers. As a result, although the EI is fundamentally responsive
to specific project proposals that must pass the
tests of financial soundness, econornic sense, and
compliance to EU policy and law, its contribution
to integration is multifaceted and direct.
Growing EU policy multiplicity complicated
the EI's task, requiring the balancing of competing priorities. For instance, it remains to be seen
how much effect the sustainability mandate of the
EU's fifth Environmental Action Program, the
SEA mandate to integrate environmental policy
into other EC policies, and the enshrining of the
principle of sustainable development as a core EU
value will have on EI operations. Though a new
environmental charter was adopted by the board
of directors in 1995, there is little to suggest that
the EI is willing to apply sustainability criteria to
big projects: doing so would have major implications for the bank, perhaps requiring it to suggest
alternatives to whole systems, for example, in the
transport sector. Significantly, a strategic environ-

205

mental impact assessment of the TENs apparently

was not undertaken.
Will the EI become a victirn of its own success? Multilateral development banks the world
over are in relative decline, consonant with significant increases in worldwide financial integration
and market reforms. In the EU, the single market
and preparations for Econornic and Monetary
Union (EMU) point to a significant maturing of financial markets, to the point that questions have recently been raised about whether, in a market-based
EU, a public lending institution still has a role to
play. Although a certain degree of skepticism may
be merited, the record shows an ever-increasing
role and a differentiation of functions. What this
points to is a legacy of success and a reservoir of
trust that will carry the EI into new territory.
Despite changes in the EI's ethos and identity, three factors are likely to enhance the bank's
irnportance in the future. First, because it is off budget, the EI is the only EU entity in a position to
provide some relief from the econornic adjustment
and fiscal rigor necessary to meet the EMU convergence criteria and to contribute to the fight against
unemployment. Second, the EI is in a unique position to implement EU policy impartially, thereby
helping to achieve the transnational uniforrnity of
econornic opportunity essential for the proper functioning and credibility of the EU. This is particularly the case in procurement and environmental
legislation. To the extent that recent organizational
changes have dirninished the role of the bank's engineers in project appraisal, however, there is legitimate cause for concern. Finally, the EI will have a
traditional role to play vis-a-vis EU candidate states
in Central and Eastern Europe. Stabilization of the
Mediterranean-a vital foreign policy interest of
the EU-will also require EI activity.
See also TRANs-EuRoPEAN NETWORKS.

Bib/iography
European Investment Bank (EIB). 1983. European Investment Bank: 25 Years, 1958-1983. Luxembourg:
EIB.
- - - . 1996. Information. Luxembourg: EIB, quarterly.
Heinemann, Friedrich. 1996. "Europische Investitionsbank: Subsidirer Finanzintermedir oder Umverteilungsinstrument?" Wirtschaftsdienst 73, pp.
98-103.
Honahan, Patrick. 1995. ''The Public Policy Role of the
European Investment Bank Within the EU." Journal
of Common Market Studies 33, pp. 315-330.

206

European Investment Fund (ElF)

Lankowski, Carl. 1994. "Environment Impact Assessment Review in the European Investment Bank: A
Report on Current Practices." Manuscript for the
World Wide Fund for Nature, EU Brussels Office.
Lewenhak, Sheila. 1983. The Role oI the European Investment Bank. London: Croom Helm.
Wenning, Marianne. 1992. Greening the EI. Brussels:
World Wide Fund for Nature.

-earl Lankowski

European Investment Fund (ElF)

As part of its emergency growth package to stimulate economic recovery in the EC, the European
Council in Edinburgh in December 1992 decided to
establish a European Investment Fund (ElF) to support projects whose risk profile the European Investment Bank (EI) was unwilling to accommodate. The EI subscribed 40 percent of the EIF's
ECU 2 billion capital; the Commission and other financial institutions subscribed 30 percent each. Operational since 1995, the ElF provides guarantees
worth between ECU 5 and 10 billion for various infrastructural projects. The president of the EI is
chairman of the EIF's supervisory board.
See also EUROPEAN INvEsTMENT BANK.

organized European space). Ideological opposition from neoliberals, however, and a biting economic recession in the early 1990s tempered Delors's vision and weakened EC social policy.
Nevertheless the European model of society still
appeals to many on the center-left and center-right
in Europe, not least because it distinguished Europe from what many Europeans see as an inhumane, nakedly capitalistic United States.
See also DELORS, JACQUES.

European Monetary
Institute (EMI)

The European Liberal, Democratic, and Reformist

Party (ELDR) is one of the oldest party groups in
the European Parliament, although only the fourth
largest and with far fewer seats than the socialist
and Christian Democratic groups, the two other
established European political "farnilies."
See also PARTY GROUPS IN THE EUROPEAN

In its provisions for Economic and Monetary

Union (EMU), the Treaty on European Union stipulated that a European Monetary Institute (EMI),
a forerunner of the European Central Bank, would
be constituted at the outset of EMU's second
stage. Accordingly, the EMI was established on
January 1, 1994, in Frankfurt and supplanted the
Committee of Central Bank Govemors, which had
met monthly in Basel, Switzerland.
The EMl's purpose is to facilitate closer cooperation between member states' central banks,
coordinate member states' monetary policies,
monitor the European Monetary System, and advise the European Council in 1998 as to each
member state's eligibility for participation in
Stage 3 of EMU (the irrevocable fixing of exchange rates). The EMI acts as a watchdog, ensuring that member states make a good faith effort to
meet the EMU convergence criteria. In order to
ensure the single currency's stability and credibility, the EMI has rejected any suggestion that the
criteria be relaxed.
See also ECONOMIC AND MONETARY UNION:

PARLIAMENT.

POLmCAL

European Market Access

Strategy

European Monetary
System (EMS)

See MARKET ACCESS

The EU's exchange rate regime, the European

Monetary System (EMS), began operation on
March 13, 1979, under a cloud of almost universal
skepticism.'Its predecessor, the European currency
"snake," had failed to stabilize nominal exchange
rate values, and there was little on the political or
economic front to indicate that the new regime
would keep European currencies in line. However,
the EMS confounded the skeptics over the next
decade, as exchange rate fluctuations decreased

European Liberal, Democratlc,

and Reformist Party (ELDR)

STRATEGY.

European Model of Soclety

The European model of society espoused by Commission president Jacques Delors and others during the height of the single market program in the
late 1980s posited social policy, redistributive
policies, and market liberalization as essential elements of a harmonious and prosperous EC (i.e., an

IssUEs.

European Monetary System (EMS)

and EMS membership widened. Indeed, the perceived success of the EMS contributed to a revived
European integration movement, most notably the
push for monetary integration and a single currency that culrninated in the plan for Economic and
Monetary Union (EMU) in the Treaty on European
Union. However, aseries of exchange rate crises
and the exit of several member states in the 1990s
once again raised doubts about the ability of the
EU governments to cooperate in the monetary
realm. The varied history of monetary cooperation
in the EMS has engaged political scientists, economists, and historians in aseries of lively, albeit inconclusive, debates about the sources, extent, and
implications of this monetary cooperation.
European politicalleaders have sought to stabilize the value of their currencies vis-a-vis other
EU states for three main reasons. First is the belief
that large swings in nominal currency values can
disrupt trade and investment flows within the
common market (Commission, 1990), although
there is little empirical evidence linking exchange
rate volatility to a decrease in cross-border economic activity (Krugman, 1988). A more certain
trade-related effect is in the area of the EU's Common Agricultural Policy, which becomes more
complicated and costly to administer with each
currency fluctuation (McNamara, 1993). Second,
European leaders view fixed rates as a way to promote political unity within Europe, as many
equate floating exchange rates with the economic
dislocations and political conflicts of the interwar
era. A final, contemporary reason why member
states have pursued exchange rate cooperation is
the perception that linking national currencies to a
regime that includes the strong and stable German
mark williower inflationary expectations and thus
inflation itself (Woolley, 1992). The EMS has
been seen as a way to borrow credibility for govemments trying to keep inflation low.
The EMS was constructed in aseries of negotiations held throughout 1978 (Ludlow, 1982). The
core of the EMS proposal was its Exchange Rate
Mechanism (ERM), in which member-state moneys
would be allowed to fluctuate vis-a-vis other EC
currencies only within predeterrnined bands of
2.25 percent of the currency's value. The project
got an initial boost from Commission president Roy
Jenkins, who saw the EMS as having the potential
to reinvigorate a flagging European integration project. However, the crucial impetus for the EMS
rested in the personal determination of French pres-

207

ident Valery Giscard d'Estaing and German chancellor Helmut Schmidt. Since the currency snake's
demise, changes in the international geopolitical environment had made the idea of exchange rate stabilization, with the potential for further monetary integration and a heightened profile for Europe in
international affairs, more attractive. Schmidt's immediate concern was the appreciation of the German currency against the U.S. dollar, which he
feared would make German exports uncompetitive,
squeezing profits and increasing unemployment.
More fundamentally, both Giscard and Schmidt
viewed the depreciation of the dollar as indicative
of a broader decline in U.S. leadership under President Jimmy Carter, one that, in their view, could
only be met with a deepening of European economic cooperation and increased political unity.
The critical role of this elite level commitrnent
to monetary cooperation by Schmidt and Giscard
was reflected in the insulated nature of the EMS negotiations. Aides drew up the initial proposal entirely outside, and in secret from, the normal channels of national and EC policymaking, and the two
leaders then presented it to the EC heads of state at
the Copenhagen summit in April 1978. The German and French leaders convinced their cOlleagues
to launch a study of a new European exchange rate
system, with routinized policy coordination, foreign exchange intervention obligations, and a new
institution, the European Monetary Fund, to manage a pool of foreign exchange reserves and provide balance of payments assistance.
The contentious details of how the system
would work were further harnmered out at another
summit meeting in Bremen in July 1978. The
stronger currency countries (led by Germany's
Bundesbank) insisted on ensuring that the system
would not be set up in a way that might dilute their
anti-inflationary efforts, whereas the weaker currency countries (primarily France and Italy) pushed
for a more flexible system to ensure their continued
participation. At issue was the degree to which the
onus would be on a weaker currency state to act to
keep its exchange rate in line (i.e., by fiscal or monetary policy changes or by currency interventions)
and the degree to which the other states would
guarantee exchange rate stability (i.e., by such actions on behalf of their partner states). In the end,
despite some cosmetic innovations to the contrary,
the stronger currency view prevailed, and states
were largely left responsible for adjusting their
policies to stay within the EMS. Most irnportantly,

208

European Monetary System (EMS)

while the European Currency Unit (ECU) was

adopted as the formal pivot for the system, the German mark became the de facto pivot, meaning the
weaker currency states would have to adjust to a
low inflation standard. The agreement to create a
European Monetary Fund with its own pool of
ecus, in an effort to keep the system from relying
heavily on the mark and to help the weaker currency states adjust, was quietly dropped. Finally,
the very short term financing facilities (VSTF), a
system of central bank swap arrangements intended
to increase the financial resources available to
member states, were not widely used, as most interventions occurred within the exchange rate bands,
whereas VSTF funds were reserved for interventions at the margins of the agreed bands.
The ERM began functioning in March 1979.
With the exception of Britain, all the then member
states of the EC (Belgium, Denmark, France, Germany, Ireland, Italy, Luxembourg, the Netherlands) participated (although Britain remained a
member of the EMS). The ERM performed weH
beyond expectations. The new regime managed to
weather the severe shocks of the second oil crisis
of 1979 and the recession of the early 1980s and
did so with an increasing sense of collective responsibility and communication among the members of the Committee of Central Bank Governors
and the Council of Econornic and Finance Ministers (ECOFIN), the two bodies overseeing the
functioning of the EMS. Not only did the new system retain its membership, but it went from an initial period of wide currency swings and frequent
exchange rate realignments (1979-1983) to a transitional period of decreasing fluctuation and realignment (1983-1987) to aperiod of extraordinary exchange rate stability (1987-1992) (IMF,
1990). Capital controls decreased over this time as
weH, driven by numerous factors, including national level imperatives, the single market program, and moves toward EMU. With the entry of
three more members to the ERM-Spain in 1989,
Britain in 1990, and Portugal in 1992 (albeit within
larger fluctuation bands initially)-the EMS was
lauded as one of the most successful and visible
parts of the European integration movement.
Aseries of exchange rate crises starting in
September 1992 tarnished the reputation of the
EMS, however. Multiple devaluations, the exits of
Britain and Italy from the ERM, and the decision
to widen the allowed bands of fluctuation from
2.25 percent to 15 percent cast doubt on the stabil-

ity of the currency regime. Yet by 1994--1995, currency values had stabilized, and most currencies
were trading within narrow fluctuation bands,
even though the wide bands remained the official
exchange rate grid. Despite this, Britain and Italy
still remained outside the ERM.
The political workings of the EMS have been
the source of some dispute among acadernics, particularly the relationship between Germany and
the other EMS participants. Germany has played a
critical role in the EMS, one that defies easy categorization. The mark has functioned as the anchor
currency of the system, and thus German monetary policy can be said to set the benchmark for
Europe (Giavazzi and Giovannini, 1989). However, Germany has not acted autonomously in its
interest rate, money supply, and currency intervention policies but has been somewhat affected
by its partner states as weIl.
Germany's role rnight be better understood as
promoting the defense of price stability before
other goals, a prioritization that became increasingly popular within the other EU states over the
life of the EMS (McNamara and Jones, 1996).
This has resulted in a convergence in monetary
policies toward the price stability emphasis of the
Germans, with an eventual convergence in inflation rates, which has underpinned increased stability in the EMS. Most strikingly, the French, key
partners with the Germans in the quest for monetary integration, became proponents of a "strong
franc" philosophy that appeared much closer to
German hard currency policies than to former
French exchange rate strategies (Cameron, 1996).
An emerging consensus in econornic policy ideology, driven in part by international economic pressures and the failures of past Keynesian-based expansionary policies, has been an important factor
in this development (McNamara, 1997). Nonetheless, efforts continued to ease the burden of the
system's operations on the weaker currency states,
most notably the Basle-Nyborg reforms of 1987,
which aHowed for earlier and easier financing of
government interventions to support currency
rates. The proposal to move from the EMS to an
EMU was also viewed by some as a way to ensure
that decisionmaking over the direction of monetary and exchange rate policy would be shared
among all member states, not determined by de
facto German leadership.
Developments in the early 1990s put a heavy
strain on the cooperative consensus that had devel-

European Movement

oped in the EMS. InternaIly, the EMS had become

overly rigid as currency realignments ceased by
the late 1980s, making the system ripe for attack
by currency traders. Externally, the reunification
of Germany and the uncertain process of ratification of the Treaty on European Union produced
heavy waves of currency speculation against
member states whose governments were perceived
as being less committed to the system (such as
Britain) or less able to stay within the system because of domestic economic problems or political
pressures (such as Italy) (Eichengreen and
Wyplosz, 1993). Even France, whose economic
fundamentals by the 1990s outshone the traditionally strong German economy, suffered from speculative attacks. However, a coordinated defense of
the franc by France and Germany managed to
keep the EMS intact at the core. By mid-decade,
the EMS appeared to have weathered the worst.
The key issue now facing the EMS member
states is how to manage the transition from exchange rate regime to monetary union. Difficult
questions remain about the relationship between
those member states that go ahead with EMU and
those that continue within the ERM, as weIl as
how to minimize the impact of speculative flows
during the transition period (Kenen, 1995). The
EMS may confound observers once more by successfully evolving into a monetary union, or it
may be tom apart by the effort to move beyond
fixed exchange rates.

Bibliography
Cameron, David. 1996. "Exchange Rate Politics in
France, 1981-83: The Regime-Defining Choices of
the Mitterrand Presidency." In Anthony Daley, ed.,
The Mitterrand Era. New York: Macmillan.
Commission. 1990. "One Market, One Money." European Economy 44.
Eichengreen, Barry, and Charles Wyplosz. 1993. The
Unstable EMS. Brookings Papers on Economic Activity 1.
Giavazzi, Francesco, and Alberto Giovannini. 1989.
Limiting Exchange Rate Flexibility. Cambridge:
MIT Press.
International Monetary Fund (lMF). 1990. The European Monetary System: Developments and Perspectives. Washington, DC: IMF.
Kenen, Peter B. 1995. Economic and Monetary Union
in Europe: Moving Beyond Maastricht. Cambridge:
Cambridge University Press.
Krugman, Paul. 1988. Deindustrialization, Reindustrialization and the Real Exchange Rate. NBER Working Paper 2586.

209

Ludlow, Peter. 1982. The Making ofthe European Monetary System. London: Butterworth Scientific.
McNamara, Kathleen R. 1993. "Common Markets, Uncommon Currencies: Systems Effects and the European Community." In Jack Snyder and Robert Jervis,
eds., Coping with Complexity in the International
System. Boulder: Westview Press.
- - - . 1998. The Currency of Ideas: Monetary Policy
in Europe. Ithaca: Cornell University Press.
McNamara, Kathleeen R., and Erik Jones. 1996. "The
Clash of Institutions: Gerrnany in European Monetary Affairs." German Politics and Society (Fall).
Woolley, John. 1992. "Policy Credibility and European
Monetary Institutions." In Alberta Sbragia, ed.,
Euro-Politics. Washington, DC: Brookings.

-Kathleen R. McNamara

European Movement
The European movement was a popular and political drive for cooperation and integration that
swept Europe in the immediate post-World War 11
years; the European Movement is the name of an
influential lobby group for deeper European integration. Repugnance against the slaughter of two
European civil wars in as many generations, and
the economic depression and political extremism
of the intervening years, fueled widespread support for a reorganization of the international system. Words like federation, union, and supranationalism were bandied about as panaceas for
Europe's ills. This trend gave rise in the late 1940s
to the European movement, a loose collection of
individuals and interest groups that ranged across
the political spectrum from the noncommunist left
to the discredited far right but had in common a
shared advocacy of European unity.
The intellectual ancestry of the European
movement stretched into antiquity, but its immediate roots lay in the interwar years. In 1923 an Austro-Hungarian aristocrat, Count Richard Coudenhove-Kalergi, buoyed by the success the previous
year of his book Pan-Europa, launched an organization of the same name. Inspired as much by the
devastation of the Great War as by the emergence
during it of a powerful United States and a potentially menacing Soviet Union, Pan-Europa quickly
acquired an ardent following, not least among influential politicians. The zenith of the pan-European movement was a stirring speech by Aristide
Briand, then French foreign minister, before the
League of Nations in 1929. But the lofty ideals of
European unity were soon swept aside by the

210

European Norms (ENs)

flood tide offascism in the 1930s.1t took the bitter

experience of defeat and occupation in 1939 and
1940 for pan-European ideas to revive and flourish in European minds.
The wartime Resistance movement, itself a
loose collection of individuals and groups opposed to Axis occupation, took up the cause of European unity as one plank of a proposed radica1 reorganization of postwar politics, economics, and
society. Resistance literature, secretly circulated in
occupied Europe, espoused the goal of intemationa1 cooperation and integration as a basis for
future peace and prosperity. In 1944, Altiero
Spinelli, a fervent federa1ist and a future commissioner and member of the European Parliament,
helped to write one of the most influential
wartime tracts on integration, the Draft Declaration of the European Resistance.
The legacy of the prewar Pan-Europa and of
the wartime Resistance movement generated a
groundswell of support for European unity in the
early postwar years. Politicians as different as
Konrad Adenauer (a German Christian Democrat), Paul-Henri Spaak (a Belgian Socialist), and
Winston Churchill (an English Conservative) espoused the cause of economic and political integration. They were typica1 of the diverse individua1s, sharing adetermination to promote European
co operation and reconciliation, who came together in May 1948 at the Congress of Europe, a
glittering gathering of more than six hundred influential Europeans from sixteen countries. The
Council of Europe, which emerged from their
lengthy deliberations, represented the high point
of the European movement. Thereafter political
interest in European integration concentrated
more on sectora1 economic integration, culminating in the establishment of the three European
Communities in the 1950s.
Since then a specific group called the European Movement, organized intemationally but
with national branches, has lobbied intensively
and at a high level for deeper European integration. In recent years, the group has focused its attention on generating political support for major
constitutiona1 reform, notably EU treaty revision.
The European Movement's president in 1997, at
the conclusion of the 1996-1997 intergovemmental conference, was Mario Soares, former president of Portugal.
See also RIGINS OF EUROPEAN INTEGRATION.

European Norms (ENs)

See EUROPEAN STANDARDS COMMITIEE; REGULATORY POLICY; STANDARDS AND CONFORMITY AsSESSMENT.

European Parllament (EP)

The European Parliament (EP) is unique. It is a
parliament with a role unfarniliar to most Europeans and with members often little known in the
countries that elected them, but it contains four former prime ministers, several prominent mayors
and regiona1 leaders, and no fewer than fifty-nine
members who have held nationa1 ministeria1 office.
It can dismiss the Commission but has no power
over the Council of Ministers, it can veto future
EU enlargement and say no to an agreement as important as the EU-Turkey customs union, and yet it
is not even forma1ly consulted on some other international agreements. The EP is a parliament that
can reject certain categories of EU legislation under co-decision with the Council and yet issues
purely consultative opinions that can be ignored in
other areas of legislation and does not even have a
forma1 power of legislative initiative. It is a parliament that shares responsibility for EU budgetary
expenditure with the Council and yet has more say
over some areas of budgetary expenditure than others (and more than many national parliaments) and
virtua1ly no say over revenue. Some member states
wish to endow the EP with more powers, and yet it
is seen by many Europeans as subordinate in 1egitimacy to nationa1 parliaments. Fina1ly, the EP is a
parliament that is seen as important or potentia1ly
important by some Europeans and as an irrelevant
ta1king shop by others. These are just some of the
differences and in some cases apparent paradoxes
that inevitably have a blurring impact on the public
image of the EP.

A Parliament Unlike Any Other

A key factor affecting public perception is that the
EP has a number of features that sharply distinguish it from more farniliar nationa1 parliaments.

A directly elected supranational parliament.

The first and most obvious point is that it is still
the only example of a directly elected supranationa1 parliament, with its 626 members from fifteen countries elected in simultaneous elections
(over a four-day period) every five years. These
elections are still held under nationa1 mies, how-

European Parliament (EP)

ever, in the continuing absence of a unifonn electoral procedure.

Unusual composition. Unlike the U.S. Congress, in which the Senate represents the states on
an equal basis and the House of Representatives
reflects the respective population of each state, the
EP has to reconcile the representation of both
states and peoples. As a result, 99 members of the
European Parliament (MEPs) are from Gennany
and only 6 from Luxembourg, but that represents
1 MEP for every 800,000 Gennans compared to 1
MEP for every 60,000 Luxembourgers.
A multilingual parliament. The EP is probably the most genuinely multilingual of all parliaments, with its eleven official languages in full
use. Unlike the situation in the UN with its five official languages, MEPs are politicians and not
diplomats, so ability to speak foreign languages,
although highly desirable, cannot be a mandatory
requirement for those seeking election to the EP.
A nomadic parliament. A confusing feature
of the EP (and one that is costly and inefficient) is
that it is a nomadic parliament. The European
Council has decided that the "seat" of the EP is
Strasbourg in France, and yet it meets there in plenary sessions for an average of only four days a
month. Most of its committee meetings are held
three hundred miles away in Brussels, where an increasing number of shorter additional plenary sessions are also held. 1\vo thirds of the Parliament's
staff is still based in Luxembourg (approximately
halfway between Strasbourg and Brussels), but one
third is based in Brussels. Facilities are thus duplicated between the three working places, and an additional travel burden is imposed on EP staff and,
of course, on MEPs besides the nonnal to-and-fro
to their individual countries and constituencies.
Since the question of the EP's seat is, under the
treaties, a matter for national governments, the battle over the seat has become an enduring one, with
a majority (but not an overwhelrning one) of MEPs
preferring Brussels to be the center of operations
but without the power to impose their will.
A rapidly changing parliament. The EP's
turnover at successive elections (typically 50 percent and even 60 percent at the 1994 elections) has
been exceptionally high by parliamentary standards, and its overall membership has grown after
direct elections and successive EU enlargements
from 198 before 1979 to 626 today. Even more
important, the EP's powers and role within the EU

211

system have also been continuously evolving.

New budgetary powers were given to the EP in
1970 and 1975. In 1987 the Single European Act
(SEA) created a new legislative procedure (the cooperation procedure) and gave the EP the right of
assent (i.e., to say yes or no) for accession treaties
and association agreements. In 1993 the Treaty on
European Union (TEU) gave a whole series of
new powers to the EP, induding co-decision with
the Council in jointly approving certain types of
legislation, extension of the existing cooperation
and assent procedures, new rights with regard to
certain EU appointments, and reinforced control
powers. A number of interinstitutional agreements
between the EP, Council, and Commission have
further consolidated these changes. In 1997 the
Amsterdam Treaty greatly extended the scope of
co-decision and deepened the EP's involvement in
a number of EU activities. Moreover, the EP, besides its other functions, has itself constituted a
lobby for promoting further EU institutional
change (i.e., the treaty for a European Political
Community drafted by the members of the first ad
hoc European Assembly after 1952, the Draft
Treaty Establishing a European Union that was
adopted in 1984, and the draft constitution prepared but never fonnally endorsed in 1994).
A parliament operating within a unique institutional structure. The EP exists within an EU
institutional structure that is itself unique (and not
fully understood by most EU citizens) and within
which farniliar national distinctions between executives, legislatures, and judiciaries cannot easily
be applied. Moreover, like the EU itself, the EP
has to operate in both intergovernmental and
supranational frameworks. Unlike national parliaments, the EP has not been allocated a dear role in
a fixed constitutional framework (whether written
or unwritten) but has seen its role evolve as a result of successive intergovernmental negotiations.
Perhaps most important for its image, unlike
most national parliaments the EP does not have
the right to create or bring down a government. It
can bring down the Commission (but has never
done so) but not the Council of Ministers or the
European Council, which have the most powerful
position within the EU's institutional structure.
Nor can the EP be separated into groups or parties
consisting of those who support a government and
those who support an opposition. Voting patterns
within the EP are based on variable national, re-

212

Europeon Parliament (EP)

gional, sectoral, and ideological c1eavages rather

than on consistent majorities and minorities.
Moreover, membership of the EP is drawn
from fifteen different national parliamentary traditions (sorne, for example, more deferential to executives or less concemed about detailed legislative scrutiny or control work than others) that
inevitably affect individual MEPs' perceptions of
their own role, let alone the perceptions of the European public at large. Given that the latter's main
point of reference is their national parliament, the
role of the EP is thus even less c1ear to individual
European citizens. It is tempting, therefore, for
many of them to conc1ude that the EP is not areal
parliament.
The fact that the EP's role is not the same as
that of national parliaments in the EU member
states does not necessarily mean that it must be
weak. The U.S. Congress, for example, does not
create or dismiss U.S. administrations but is still
arguably the strongest parliament in the world. In
an EU that is not fully supranational, the EP cannot expect to have similar powers, but it can nevertheless have a distinctive and important role.
A parliament with uneven powers. In a number of areas the EP's powers are already greater
than those of certain national parliaments. A feature
of its powers, however, is that they are so uneven:
strong or very strong in some areas, weak or very
weak in others. The result of all this is that the EP
starts from a base of much greater influence in
some policy areas than in others. It has a strong
role, for example, on single market matters where it
is generally involved in co-decision. It is obviously
Iess influential in the predominantly intergovemmental areas of Common Foreign and Security Policy and of Justice and Horne Affairs, where the Parliament's extremely weak roIe mirrors that of other
Community institutions such as the Commission
and the European Court of Justice (ECJ). The EP's
role is also, however, relatively weak in certain policy areas falling under the EU's first pillar, such as
Economic and Monetary Union (EMU), and in areas in which the Commission, for example, has a
very strong role, such as the Common Commercial
Policy, competition policy, and even the Common
Agricultural Policy. The EP is only involved by
means of simple consultation in an area such as fiscal policy with direct consequences for the single
market. In some cases Parliament's powers vary
considerably even within a relatively narrow policy
area. In the environment policy artic1e of the Treaty

of Rome (Artic1e l30 S), the EP is respectively involved by means of consultation, cooperation, and
co-decision, depending on the specific policy area.
In the field of Trans-European Networks (Artic1e
129), the EP's involvement is by means of co-decision on the general guidelines but only by means of
cooperation on the accompanying financial measures and other implementing measures. (However,
under the terms of the Amsterdam Treaty, the cooperation procedure was virtually abolished, and most
of the areas subject to it were made subject to the
co-decision procedure.)
One final consequence of these uneven powers is that they increase the need for cooperation
between the EP and the national parliaments
within the EU institutional structure. Although
there is a tendency for the EP and national parliaments to see each other as rivals, their work on EU
matters is in fact often complementary, with different roles and different strengths and weaknesses in different areas.
Functions
In spite of these unusual features, the EP has a
number of functions that are more irnmediately familiar to any student of parliaments. The EP is
c10sely involved in the EU legislative process and
is one of the two arms of the EU budgetary authority. It has a small but evolving role in approving
EU appointrnents and a vital, but often difficult,
role in scrutiny and control of EU institutions and
of EU programs and policies. It has' an important
information function on EU matters.
Involvement in legislation. The EP has no
power of legislative initiative (although since the
TEU it can ask the Commission to submit proposals), but it is now consulted on practically all
Community legislation. It also gives its views on
prelegislative documents from the Commis si on,
such as green papers and important background
documents. It is reconsulted on legislation when
significant changes are proposed in the course of
examination by Commission or Council. The ECJ
has made it c1ear (in the 1980 Isoglucose case)
that the Council has to wait for Parliament's opinion before adopting legislation. The EP is increasingly involved in EU legislative planning. It has
also played an important role in putting new issues
on the EU policy agenda.
Parliament's influence on legislation varies
according to the procedure used. The single-reading consultation procedure gives it least influence

European Parliament (EP)

but is still used in such important cases as agriculture, taxation, certain international agreements,
and new Community initiatives taken pursuant to
Article 235 of the Rome treaty.
The two-reading cooperation procedure introduced under the Single European Act was less
used after the co-decision procedure was introduced under the TEU and was virtually abolished
in the Amsterdam Treaty. Before amendment of
the TEU, the cooperation procedure applied in
eighteen areas, including transport and development policy, several areas of social policy, and implementation of mIes in a variety of areas. That
procedure kept the EP involved longer in the legislative process and gave the EP's opinions real
weight when parliament rejected a proposal on
second reading (when the Council could only
overrule it unanimously) or when the EP's amendments on second reading were supported by the
Commission (when the Council could again only
reamend the text by unanimity).
It is the co-decision procedure (Article 189 b)
that gives the Parliament the most say, first by enabling the EP to reject draft legislation without
any possibility of being overruled and second by
providing a formal negotiating mechanism (the
Conciliation Committee between Council and
Parliament). The procedure applied in fifteen areas before its use was extended in the Amsterdam
Treaty, most frequently in the case of single market harmonization but also in other areas such as
the Framework Program for Research and Technological Development, measures on the free
movement of workers and the right of establishment, services, and certain cultural, environmental, public health, and consumer protection measures. Although seemingly long and cumbersome,
the procedure has generally worked smoothly
since it came into operation in November 1993,
and few proposals have been finally rejected by
the Parliament.
Besides these main legislative procedures,
the EP also has to give its assent in a few areas of
legislation. In these cases it can only approve or
reject the measure and not amend it. The assent
procedure is also used in other nonlegislative
cases, such as for the enlargement of the EU
(when the EP, for example, had to approve the accession of Sweden, Finland, and Austria) and for
the conclusion of association agreements (including revisions or additions to such agreements,
such as financial protocols). The EP has used the

213

assent procedure to effect on several occasions, as

when it initially refused an agreement with Israel
and turned down financial protocols with Syria
and Morocco. The scope of the assent procedure
was increased by the Amsterdam Treaty to cover a
new provision: sanctions in the event of a serious
and persistent breach of fundamental rights by a
member state.
As regards other international agreements entered into by the EU, the EP's role has been a
more limited one, with no formal consultation at
all on Article 113 trade agreements (such as those
under the GATT and the World Trade Organization), although the Parliament's right to information has gradually developed. Moreover, the EP's
involvement in important international agreements was extended by the TEU.
Involvement in the budgetary process. The
EP has considerable budgetary powers as regards
expenditure but not revenue. It can increase or reduce Community expenditure within certain limits, can redistribute spending from one part of the
budget to another, and can reject the EU budget
(as it did in 1979 and 1984) or a supplementary
budget (as it did in 1982). The EP also has the exclusive right to grant a discharge to the Commission as regards the way in which it has implemented the budget (it refused such a grant in
November 1984). The EP has less power and autonomy with regard to so-called compulsory expenditure (essentially agricultural expenditure)
than for other, noncompulsory expenditure. Over
the years the EP's involvement in longer-term
budgetary planning has been increased through
two interinstitutional agreements (agreed to in
1988 and 1993) over permitted levels of annual
spending covering periods of several years.
Involvement in EU appointments. At the
outset the EP had no role in EU appointments,
which were an exclusive matter for the member
states. As a result of the TEU the EP's role has increased, aIthough it does not have the U.S. Senate's power formally to reject any appointments.
The EP is now consulted on the choice of the
Comrnission president (and in 1994 only accepted
Jacques Santer by 260 votes in favor and 238
against: although he was not obliged to do so, he
would almost certainly have stood down if the vote
had gone against him) and then votes on the Commission as a whole (but not on individual comrnissioners). The EP is consulted on appointments to
the Court of Auditors (on one occasion successfully

214

European Parliament (EP)

pushing for the withdrawal of a French nominee)

and to the presidency of the European Monetary Institute (this first taking place in November 1993).
When the European Central Bank is established, the
EP will be consulted on appointments to its presidency and to its executive board. The EP is also exclusively responsible for the choice of the EU ombudsman (the first such appointment was made by
the EP in 1995). To build on its new powers in this
field, the EP has begun to introduce confirmation
hearings of the nominees (with the highest profile
hearings being held for the individual nominees to
the Santer Commission in January 1995).
Involvement in scrutiny and controf. Besides its role in budgetary control (i.e., in granting
the budgetary discharge mentioned above), the EP
is also involved in numerous other scrutiny and
control activities. Its most spectacular power is
that of dismissing the Commission as a whole, but
the handful of censure motions that have been put
down so far have all been easily defeated or withdrawn.
The EP's normal means of scrutiny, however,
are less dramatic, such as putting oral and written

Table 7
Term

questions to the Comrnission and the Council,

grilling comrnissioners and national ministers in
individual parliamentary committees, drawing up
annual reports in particular policy areas and urgent resolutions on current political topics or human rights issues, holding public hearings on controversial issues, and setting up temporary
committees of inquiry (which have been given formal status under the TEU: an inquiry on fraud in
the field of Community transit was the first one
under the new rules). When all else fails the EP
can, subject to certain restrictions, also take a case
before the ECJ.
Other functions. Besides the above, the EP
also plays an important intermediary role in EU
issues. It has increasing contacts with nongovernmental organizations (NGOs) and other
interest groups, with individual citizens (who
also have the right to petition the Parliament),
and, of course, with the media. Moreover, MEPs
not only put forward national, regional, and constituency points of view to decisionmakers in
other EU institutions (as weIl as requests for
Community funding) but also seek to explain EU

Presldents of the European Parllament

President

Presidents oi the Common Assembly oi the ECSC

Paul-Henri Spaak
1952-1954
Aleide De Gasperi
1954
1954-1956
Guiseppe Pella
Hans Furier
1956--1958
Presidents oi the European Parliament
Robert Schuman
1958-1960
1960--1962
Hans FurIer
Gaetano Martino
1962-1964
Jean Vuvieusart
1964-1965
Victor Leemans
1965-1966
1966--1969
Alain Poher
Mario Scelba
1969-1971
Walter Behrendt
1971-1973
1973-1975
Cornelius Berkhouwer
1975-1977
Georges Spenale
Emilio Colombo
1977-1979
Simone Veil
1979-1982
Piete Dankert
1982-1984
1984-1987
Pierre Pflimlin
Lord Henry Plumb
1987-1989
Enrique Bar6n Crespo
1989-1992
Egon Klepsch
1992-1994
1994-1996
Klaus Hnsch
Jose Maria Gil-Robles
1997-1999

a. Formerly Christian Democratic Group.

b. Formerly Socialist Group.

Country

Political Group

Belgium
Italy
Italy
Germany

Socialist Group
Christian Democratic Group
Christian Democratic Group
Christian Democratic Group

France
Germany
Italy
Belgium
Belgium
France
Italy
Germany
Netherlands
France
Italy
France
Netherlands
France

Christian Democratic Group

Christian Democratic Group
Christian Democratic Group
Liberal Group
Christian Democratic Group
Christian Democratic Group
Christian Democratic Group
Socialist Group
Liberal Group
Socialist Group
Christian Democratic Group
Liberal Group
Socialist Group
European People's Party"
European Democratic Group
Socialist Group
European People's Party
Party of the European Socialistsb
European People's Party

UK

Spain
Germany
Germany
Spain

European Parfiament (EP)

Table 8

European Parllament Commlttees and Subcommlttees

CI
SCIA
SCIB
C2
C3
C4
SC4
C5
C6
C7
CS
C9
CIO
CH
CI2
CI3
CI4
CI5
CI6
CI7
CIS
CI9
C20
TC

Committee on Foreign Affairs, Security, and Defense (policy)

Subcommittee on Security and Disarrnament
Subcommittee on Human Rights
Comminee on Agriculture and Rural Development
Comminee on Budgets
Comminee on Economic, Monetary Affairs, and Industrial Policy
Subcomminee on Monetary Affairs
Comminee on Research, Technological Development, and Energy
Comminee on External Economic Relations
Comminee on Legal Affairs and Citizens' Rights
Comminee on Social Affairs and Employment
Comminee on Regional Policy
. Comminee on Transport and Tourism
Committee on the Environment, Public Health, and Consumer Protection
Comminee on Culture, Youth, Education, and the Media
Committee on Development and Cooperation
Comminee on Civil Liberties and Internal Affairs
Committee on Budgetary Control
Committee on Institutional Affairs
Committee on Fisheries
Committee on the Rules of Procedure, the Verification of Credentials, and Immunities
Committee on Women's Rights
Comminee on Petitions
Temporary Comminee on Employment

issues back horne. Contacts between the EP and

national parliaments have also multiplied in recent years, as have contacts with regional and 10cal authorities.
Strudures

In order to carry out these various functions, the

EP has developed a set of distinctive structures
(and incidentally also has complete autonomy over
its own agenda and its internal budget). The 626
MEPs represent almost one hundred different national political parties, but they are now grouped
together in eight party groups, with only 30 MEPs
remaining nonattached. Although the groups vary
in homogeneity and have not yet evolved into Europe-wide political parties, they playa fundamental role in the life of the EP.
Parliament's president (who plays a key representational role for the EP) is elected every two
and a half years (see Table 7), as are the fourteen
vice presidents and five quaestors. Much of the
EP's preparatory work (such as drawing up reports) is carried out in its twenty committees (see
Table 8). In contrast to the U.S. Congress, there
are only three subcommittees. There are also a
considerable number of interparliamentary delegations to third countries. A phenomenon worth
mentioning is that of the EP's intergroups (consisting of MEPs from different countries and from

215

different political groups with a common interest

in a particular third country or policy subject) that,
although having no formal role, can have an important mobilizing function. Finally, it should be
noted that the EP's individual members have considerable powers, and one of the advantages of not
having a government to support is that individual
"backbenchers" often have greater independence
and more interesting tasks than their equivalents
in national parliaments.
Future Rofe

The EP is a relatively young institution. Its role

has evolved significantly in recent years, and it
now has considerable, if uneven, powers that are
still unfamiliar to most Europeans. The further
evolution of its role is essentially linked to the future of European integration itself, and the degree
to which the EP's powers will be reinforced in the
future is thus highly uncertain. Moreover, even if
EU "deepening" does go ahead, it is unlikely to
take a centralizing form, and the future tasks of
democratic control within any new EU institutional structure will continue to have to be shared
between the EP and national and, in some cases,
even regional parliaments. Whatever happens,
however, democratic accountability at the EU
level will have to be strengthened, and in the
course of this process the EP will have to seek to

216

European Payments Union (EPU)

make itself better known and better accepted, and

its powers will have to become more coherent and
less uneven.
In the shorter term, the most probable change
in the EP's powers is in the legislative area, where
the EP is pushing for co-decision to become the
general procedure for all legislation. The EP's
general control powers mayaiso be reinforced.
Greater EP power over the budget and in the field
of appointments will be more difficult to achieve,
but the EP will continue to push for them with
vigor and will also continue to push for greater involvement in those policy areas where it is currently particularly weak, such as Common Foreign and Security Policy, Justice and Horne
Affairs, and certain aspects of EMU. The Amsterdam Treaty put a ceiling of seven hundred on the
EP's overall membership, but disputes over its
seat and over a uniform electoral system are likely
to continue for some time to come.
See also BUDGET; COMMISSION; COUNCIL OF
MINISTERS; DECISIONMAKING PROCEDURES; DEMOCRATIC DEFICIT; NATIONAL PARLIAMENTS; PARTY
GROUPS IN THE EUROPEAN PARLIAMENT; APPENDIX

1; APPENDIX 5.
Bibliography
Corbett, Richard, Francis Jacobs, and Michael Shackleton. 1995. The European Parliament. 3d ed. London:
Cartennill.
Westlake, Martin. 1994. The European Parliament: A
Modem Guide. London: Pinter.

-Francis Jacobs

European Payments
Union (EPU)
Established in September 1950 under the Marshali
Plan, the European Payments Union (EPU) facilitated currency clearing among the central banks of
sixteen Western European countries and contributed to the reconstruction of postwar Europe.
The EPU ceased operating in 1958, when the participating countries had restored their own currency convertibility.

European People's Party (EPP)

The European Peoples's Party is the Christian Democratic group in the European Parliament. It is
second in size to the European Party of Socialists.

See also

PARTY GROUPS IN THE EUROPEAN

PARLIAMENT.

European Police Office

(EUROPOL)
During the 1991 intergovernmental conference
(IGC) on political union, Germany pressed for
greater police collaboration to combat organized
crime, particularly in anticipation of increasingly
porous European borders following the end of the
Cold War. This pressure was the basis for a provision in the Treaty on European Union's pillar on
Justice and Horne Affairs (JHA) stipulating the
possible establishment of "a Union-wide system
for exchanging information within a European Police Office" (Article Kl [9]). Accordingly, the European Police Office (EUROPOL) was set up in The
Hague in January 1994 to collect and analyze criminal intelligence on a transnational basis. However,
a dispute between member states over EUROPOL's
role and scope and between Britain and its partners
concerning the jurisdiction of the Court of Justice
(ECJ) over EUROPOL's activities (Britain objected
to what it saw as a further surrender of national
sovereignty) delayed ratification of the agency's
convention. The dispute marred the June 1995
Cannes summit, although member states signed the
Iong-delayed convention to establish EUROPOL a
month later (on July 26) on the understanding that
the ECJ's role would be resolved by June 1996. In
the event, the dispute continued beyond that time,
having become a victim of the British government's obstructionism in mid-1996 in retaliation
against the EU's ban on British beef exports as a
result of the bovine spongiform encephalopathy
(BSE) crisis. Apart from the BSE debacle, lack of
progress on EUROPOL was a source of mounting
EU irritation with Britain. Germany, which saw
EUROPOL as a vital weapon against organized
crime from the east, especially resented Britain's
behavior. Finally, on Franco-German insistence,
the European Council in Dublin in December 1996
identified the granting of "operative powers" to
EURO POL as a priority for the IGe then in session, and Britain won an opt out from the ECJ's jurisdiction over the agency. At the Amsterdam summit in June 1997, the heads of state and
government reiterated the priority they attached to
ratification by all member states of the EUROPOL
convention before the end of 1997. In the meantime EUROPOL continued to operate on a re-

European Political Cooperation (EPC)

stricted basis, dealing with twenty-four hundred

cases in 1996 alone (mostly having to do with
drugs and money laundering).
See also JUSTICE AND HOME AFFAIRS.

European Polltlcal Communlty

French prime minister Rene Pleven's proposal in
October 1950 for a European Defense Community
(EDC) contained a proposal also for a political authority to oversee the putative military organization. The six member states of the European Coal
and Steel Community (ECSC)-France, Germany, Italy, Belgium, the Netherlands, and Luxembourg-went on to sign the EDC treaty in May
1952. The ECSC's Assembly (forerunner of the
European Parliament) then took the initiative and
drafted a treaty for a European Political Community. The collapse of the EDC in August 1954,
when the French National Assembly refused to
ratify the treaty, doomed the European Political
Community, with its far-reaching prospects for a
federal or confedera1 structure binding the six
member states.
See also EUROPEAN DEFENSE COMMUNITY.

European Polltlcal
Cooperatlon (EPC)
Although the EC did not embrace foreign policy,
security, or defense cooperation, the founding fathers sought to create "an ever doser union"
(Treaty of Rome, preamble) and to fashion a single
European voice in world affairs. In their view, only
a united Europe could regain the pre-World War TI
influence of major Western European states.
There were several false starts in operationalizing these aspirations, notably the failure of the
European Defense Community (EDC) and the associated European Political Community in the
1950-1954 period and the abortive Fouchet Plan
of 1961-1962. Progress was only made after the
Hague sumrnit of heads of state and government
in December 1969 that agreed, among other
things, to instruct the foreign ministers to report
on "the best way of achieving progress in the matter of political unification" and on paving the way
"for a united Europe capable of assuming its responsibilities in the world." The ensuing foreign
ministers' report of November 1970 daimed that
such progress was likely to be achieved by cooperation in the field of foreign policy, involving ex-

217

changes of information, consultation, and attempts to coordinate the member states' international actions. The mechanism for performing
these tasks became known as European Political
Cooperation (EPC).
Procedural issues were tackled by a comrnittee under the chairmanship of Etienne Davignon,
a Belgian diplomat (and later comrnissioner). EPC
was to consist of foreign ministers' meetings twice
a year; those meetings were to be prepared by the
Political Comrnittee, consisting of the heads of the
foreign ministries' political departments, meeting
at least four times a year. Special working parties
would be created to deal with specific functional
and regional problems, and a "group of correspondents" Gunior foreign ministry officials) would be
responsible for day-to-day liaison. The system
was to operate separately from the Community
proper and was avowedly intergovernmental.
There was no question of voting in EPC; all participants had a right to veto. EPC was to be
chaired by the state occupying the presidency of
the Council of Ministers, that state providing the
secretarial and organizational backup. EPC had no
treaty base; it depended instead on political agreement among the member states.
EPC evolved informally, and a European "reflex" of foreign policy coordination began to develop. Member states we1comed the informal nature of EPC, its pragmatic mechanisms, its
flexibility, and its usefulness for concerted action.
As part of the growing intensity of consultation, a
telex liaison system, known as COREU, was established between the foreign ministries.
In 1974 the foreign ministers decided to hold
EPC meetings at the margin of Council meetings,
thus avoiding arepetition of the situation in November 1973 when foreign ministers had an EPC
meeting in Copenhagen in the morning (under the
auspices of the Danish presidency) and moved to
Brussels in the afternoon for a meeting of the
General Affairs Council (foreign ministers). Informal ministerial meetings to allow exchanges of
view (so-called Gymnich meetings) were also introduced, as was the troika arrangement, whereby
each rotational presidency would be assisted by its
immediate predecessor and successor. Especially
important was the Paris sumrnit decision of 1974
to create the European Council (regular meetings
of heads of state and government) that, among
other things, was to provide a platform for EPC
discussions at the highest level.

218

Europeon Politica/ Cooperation (EPC)

EPC's pragmatic development was accompanied by rhetorical flourishes about European

union, but a document on European Identity, published in December 1973, was noticeab1y thin on
content. By that time, rhetoric had been overtaken
by the reality of disparate member state reactions
to the Arab-Israe1i war of October 1973. This
demonstrated that although able to agree on routine matters, on major international disputes member states were still driven by perceived self-interest. The habit of working together had grown, but
as one participant pointed out, "we have reached a
plateau" (de Schoutheete, 1980, p. 81).
Further periodic attempts were made to give
EPC more structure and to make it more binding
and coherent. These ineluded the London Report of
1981 and the Genscher-Colombo initiative of November 1981, which culminated in the Solemn Deelaration on European Union (the Stuttgart Declaration) in 1983. The London Report (adopted by
foreign ministers at a meeting in London on October 13, 1981) codified and intensified existing practice but also agreed on the need for EPC to become
less reactive and more anticipatory in its approach
to international deve1opments. Member states had
debated the appropriate content of EPC, and the report noted their agreement to discuss in EPC "certain irnportant foreign policy questions bearing on
the political aspects of security." On November 19,
1991, Hans-Dietrich Genscher and Emilio
Colombo, the German and ltalian foreign ministers,
presented to the European Parliament their governments' proposals for a European Act, which ineluded proposals for eloser political cooperation.
Eventually, the heads of state and government
adopted the Solemn Deelaration on European
Union at their surnrnit in Stuttgart on June 17-19,
1983. But the Solemn Deelaration did little more
than expand the scope of EPC discussions to "the
political and economic aspects of security."
The next major development was the incorporation of EPC into the Single European Act
(SEA) of 1986: Title m (Artiele 30) of the SEA
codified the basic organizational structure and operational parameters of EPC. Despite having been
incorporated into the SEA, EPC still entailed political obligations, not legally binding ones, and
foreign policy cooperation remained strictly intergovernmental.
The SEA confirmed EPC's organizational
structure, ineluding a central role for the Council
presidency; quarterly meetings of foreign minis-

ters; the Political Comrnittee's preparatory role;

the group of correspondents' responsibility for
monitoring day-to-day liaison; and the role of the
working groups (consisting of foreign ministry officials ) to taelde specific matters under the direction of the Political Committee. The SEA also set
up a secretariat, based in Brussels, to "assist the
presidency in preparing and implementing the activities" of EPC, under the authority of the presidency. According to the SEA, EPC encompassed
the "political and economic aspects of security,"
which by implication exeluded the military aspeets. The Irish government confirmed this in a
declaration attached to the SEA, affirming that the
SEA's provisions on EPC did not affect "lreland's
long established policy of military neutrality."
Developments in Central and Eastern Europe
in 1989 and the consequent decision in 1990 to
hold an intergovernmental conference (IGC) on
political union foreshadowed the transformation
of EPC into the Common Foreign and Security
Policy (CFSP) in the Treaty on European Union
(TEU), but this was not before EPC's fragility on
major international issues was exposed in the Gulf
and Yugoslav crises. The member states adopted
twelve different responses to the 1990 Gulf erisis;
in 1991, on the eve of the Maastricht summit, the
twelve divided again over their response to the Yugoslav war, especially over the issue of whether
and in what cireumstances to recognize Croatia
and Slovenia (Salmon, 1992). On major foreign
policy issues member states eontinued to maintain
their freedom of maneuver, and hence their
propensity to diverge.
Often such divergenee was eovered over by
the deelaratory nature of EPC, and the member
states' ability to unite "behind a eommon position
sufficiently loosely defined to allow each to add his
own interpretation, so produeing some forward
movement without eonfronting the major obstaeles
ahead" (Wallaee, 1983). Yet apart from words,
Commission president Jaeques Delors lamented in
1991, the EC and EPC system possessed only three
foreign poliey instruments: publie opinion, the
threat of withholding diplomatie reeognition, and
eeonomie sanetions (De1ors, 1991).
There was never a eomplete or wholly predietable pattern of EPC solidarity. Yet third eountries inereasingly viewed member states as a eoherent foree in international relations and as a
diplomatie bloc on a wide range of issues. On routine foreign poliey matters, EPC established a pol-

European Research Coordination Agency (EUREKA)

icy line from which member states found it difficult

to depart, and the evolving European reflex made it
normal to search for consensus. Moreover, EPC
was notably successful in coordinating member
states' positions at the Conference on Security and
Cooperation in Europe, especially in the mid-1970s
and early 1980s, and in promoting a distinctive European position on the Middle East, especial1y in
the form of the landmark Venice Declaration of
May 1980, which called for Palestinian autonomy.
See also COMMON FOREIGN AND SECURITY
POLICY.

Bibliography
Delors, Jacques. 1991. Quoted in The Week (European
Parliament) (September 9-13), p. 1.
de Schoutheete, Phillippe. 1980. La Cooperation Politique Europeenne. Paris: Nathan.
Ginsberg, Roy. 1989. Foreign Policy Activity of the European Community. Boulder: Lynne Rienner.
Holland, Martin, ed. 1991. The Future of European Political Cooperation: Essays on Theory and Practice.
London: Macmillian.
Nuttall, Simon. 1992. European Political Cooperation.
Oxford: Clarendon Press.
Salmon, Trevor C. 1992. "Testing Times for European
Political Cooperation: The Gulf and Yugoslavia,
1990-1992." International Affairs 68, no. 2 (April).
Wallace, William. 1983. "Cooperation and Convergence
in European Foreign Policy." In C. Hill, ed., National Foreign Policies and European Political Cooperation. London: Allen and Unwin.
-Trevor C. Salmon

European Polltlcal Union (EPU)

European political union (EPU) encompasses the
noneconomic aspects of European integration,
ranging from the EU's institutional structure to
foreign and security policy. Interest in EPU revived in the late 1980s not only because of the
success of the single market program but also because of the revolution in Central and Eastern Europe and German unification. Commission president Jacques Delors realized that what he called
the "acceleration of history" in Central and Eastern Europe threatened to derai1 the single market
program and undermine European integration. Accordingly, he seized the opportunity to rethink the
EC's political agenda and expedite Economic and
Monetary Union (EMU).
Delors received a huge boost from German
chancellor Helmut Kohl and French president

219

Mitterrand. In a famous letter in April

1990, both leaders endorsed European union and
called for "fundamental reforms-economic and
monetary union as weIl as political union-[to]
come into force on January 1, 1993." This was the
starting point for two years of frenetic discussions
in the EC, including the intergovemmental conference of 1991, about the nature, scope, and competence of EPU. The ensuing Treaty on European
Union included greater majority voting in legislative decisionmaking, greater EC competence,
more power for the European Parliament, a Common Foreign and Security Policy, and Cooperation on Judicial and Horne Affairs.
See also TREATY ON EUROPEAN UNION.
Fran~ois

European Recovery Program

See MARSHALL PLAN.

European Regional
Development Fund (ERDF)
The European Regional Development Fund
(ERDF) is one of the EU's "structural funds," that
is, one of the means by which the EU prornotes
social and economic cohesion. The ERDF originated in the Paris summit of October 1972, when
leaders of the EC's then six member states endorsed a proposal to develop regional policy in the
Community, which could only succeed if the
member states committed funds to regional development. In reality, however, the ERDF was designed to make side payments to Britain in lieu of
Common Agricultura1 Po1icy (CAP) subsidies
(Britain, which joined the EC in January 1973,
had the smallest and most modem agricultural
sector in the EC). PoliticaIly, the ERDF fai1ed to
buy off British critics of the CAP or of the EC.
Economically, the ERDF became an effective instrument of regional and cohesion policy after the
Delors I budgetary package of 1988 doubled the
fund's size.
See also COHESION.

European Research
Coordlnatlon Agency (EUREKA)
The European Research Coordination Agency
(EUREKA) was launched in 1985, on the initiative of the French govemment, as a direct response to the U.S. Strategic Defense Initiative

220

European Round Table of Industrialists (ERT)

(SOl). More broadly, EUREKA was one of a

number of European initiatives in the 1970s and
1980s to help reduce the gap between research
and applicable results and to restore Europe's international competitiveness vis-a-vis the United
States and Japan. EUREKA is not an EU program,
but the EU and its member states were founding
members and participate in it with other European
countries. EUREKA promotes advanced technology in nine areas: medicine and biology, communications, energy, the environment, information,
lasers, new materials, robotics, and production,
automation, and transport. By the mid-1990s
EUREKA focused mostly on the development of
High-Definition Television (HDTV) and the harmonization of European standards of broadcasting
and reception.

European Round Table of

Industrial1sts (ERT)
The European Round Table of Industrialists (ERT)
is one of the most influential business organizations in Brussels. Considered both an interest
group and a think tank, the ERT is composed of
forty-five chief executive officers (CEOs) or
chairpersons of major European companies. The
purpose of the organization is to shape the larger
industrial and economic policy initiatives of the
EU. Recognized as one of the primary forces behind the single market program, the ERT continues to be an important voice in EU industrial matters both in Brusse1s and across the European
continent.
The ERT's political clout is due, in part, to its
novel form. Historically, European-Ievel business
groups were made up of national industry associations, which were in turn composed of sectoral industry associations. The ERT's membership, however, consists of leading individuals in European
industry. ERT members-most of whom enjoy
close relations with national political leadersmeet with and directly lobby EU and member
state officials (Cowies, 1995b).
The ERT also differs from traditional Europe an-level organizations in its approach to EU
policy making. For example, UNICE-the Union
of Industrial and Employers' Confederations of
Europe-is the industrial "peak association" in
Brusse1s, which reviews and provides position papers on most horizontal (cross-industry) EU legislation. The ERT does not seek to duplicate

UNICE's work and rare1y focuses on individual

legislation. Instead, the ERT serves as an "idea
generator and agenda-setter" vis-a-vis the Commission and other EU institutions for those issues
of importance to its membership, including competitiveness, Trans-European Networks (TENs),
information highways, and education (Cowies,
1995b).
Modeled after the CEO-led Business Round
Table in the United States, the ERT was created in
1983 by CEO Pehr Gyllenharnmar of the Swedish
automaker Volvo. With strong support from industry commissioner Etienne Davignon, Gyllenhammar recruited seventeen CEOs to come up with a
plan to address Europe's economic malaise of the
time. The early ERT membership included CEOs
from such large European companies as Bosch,
Fiat, ICI, Lafarge Coppee, Olivetti, Philips, and
Saint-Gobain, among others. The ERT developed
a goal to revitalize the EC by setting the agenda
for creating a single European market. The group
sought to influence EC policymakers through direct contacts with Commission and member state
officials as well as by promoting pan-European
projects, funded partly or completely by the companies, that would demonstrate the firms' commitment to a united Europe. In early 1984, the ERT
issued areport, Missing Links, that outlined the
development of three major trans-European projects, including a roadlrail transport route between
Britain and continental Europe. The latter served
as aprecursor to the Channel tunnel project. ERT
members also played a significant role in influencing then French president Fran~ois Mitterrand to
renew his support for the European Community in
1984 with a major industrial initiative. Mitterrand
later proved to be an important proponent of the
single market program (Cowies, 1995a; Cowles,
1996).
In 1985, Wisse Dekker, CEO of Philips, the
Dutch electronics firm, unveiled a plan to create a
single market in 1990 by focusing on four key areas: ending border controls, opening up public
procurement, harmonizing technical standards,
and promoting fiscal harmonization. The plan was
presented to the heads of state and govemment as
weH as leading Commission officials. Dekker's
"Europe 1990" proposal was revolutionary not
only because it came from an important business
leader but also because it was a bold, simple plan
to create a single market in five years. The paper
was soon embraced by the ERT. Meetings were

European Round Table of Industrialists (ERT)

held between Commission officials and ERT

members to promote the single market agenda. In
many respects, the Dekker paper was the precursor to the white paper issued six months later that
served as the blueprint for the 1992 pro gram
(CowIes, 1995a; Cowles, 1996).
Following the signing of the Single European
Act in February 1986, the ERT set up a "watchdog
group" to follow implementation of the single
market prograrn. Every six months, ERT members
would meet with leading officials in the country
holding the Council presidency to encourage action on the 1992 prograrn. Throughout this period,
the ERT enjoyed elose relations with Commission
president Jacques De10rs and key members of his
cabinet. The Commission president publiely acknowledged the influential role of major business
actors, notably the ERT, in promoting the single
market project (Krause, 1992).
Since the establishment of the single market
program, the ERT has continued to influence the
EU industria1 agenda in other important ways.
Under the leadership of ERT chair Jerme
Monod, CEO of Lyonnaise des Eaux, the ERT began to issue aseries of megareports to the heads
of state and govemment, commissioners, and
other leading politicians. The megareports became "visiting cards" for ERT members to use to
call personallyon their govemment leaders and
present the ERT's concems. The first report, Reshaping Europe, outlined steps to improve the
competitiveness of the European economy (ERT,
1991). Negotiators at the 1991 intergovemmenta1
conferences (lGes) discussed Reshaping Europe
among themse1ves and noted the industrialists'
positions when revising the treaty. Before the Edinburgh summit in December 1992, the ERT presented another report, Rebuilding Confidence,
which called for concerted govemment action to
address the economic and po1itica1 crisis in Europe and increase infrastructure funding (ERT,
1992). Although the results of the Edinburgh
summit were mixed, the European Counci1 did
agree to spend $200 billion for infrastructure projects. The third ERT megareport, Beating the Crisis, was launched to coincide with the De10rs
Commission's white paper, Growth, Competitiveness and Employment. The ERT report called for
"a radical shift in Europe's approach to industrial
deve10pment and growth" (ERT, 1993). Like
other megareports, Beating the Crisis received
considerable coverage by the European press.

221

Over twenty-two thousand copies of the report

were printed in English, French, and German and
distributed to European opinion makers.
Beating the Crisis also proposed the creation
of a European competitiveness council to ensure
that EU 1egislation did not hinder European industrial productivity. This proposal was made again in
another ERT report, European Competitiveness:
The Way to Growth and Jobs (ERT, 1994). At the
Essen summit in December 1994, the heads of
state and govemment supported the proposal, and
the following year Commission president Jacques
Santer established the Competitiveness Advisory
Group (CAG). Several ERT members have served
on the CAG, which formal1y advises the European
Council on competitiveness issues prior to each
summit.
In addition to the megareports, the ERT has
p1ayed a very active ro1e in promoting the information society and TENs as weIl as the improvement of education throughout Europe. For eXampIe, Carlo De Benedetti, the former CEO of
Olivetti, 1ed European companies in negotiations
with U.S. and Japanese fmns in an effort to ensure
that practica1 global information society proposals
were on the agenda for the Halifax G7 summit in
June 1995. In the area of TENs, the ERT created
the European Center for Infrastructure Studies
(ECIS) in March 1994, which now operates as a
nonprofit association supported entire1y by membership subscriptions and research contracts. The
ERT has been active in the education domain for
several years. In 1988, for examp1e, the ERT established the European University-Industry Forum
to bring together rectors, presidents, and vicechancellors of European universities to promote
curriculum changes to prepare students for "li felong leaming." Many of the ideas found in the
1995 ERT report, Education Jor Europeans, can
be found in the Commission's own White Paper
on Education and Training. More than thirty-six
thousand copies of the ERT report were pub1ished
in seven 1anguages and sent to education ministers
and other authorities throughout Europe.
The ERT also has contributed to policy debates on Economic and Monetary Union and the
1996-1997 IGe. ERT members, for example, met
Car10s Westendorp, chairman of the pre-IGC reflection group, to discuss industry concems. As in
the ear1ier single market debate, the ERT members' goal was not to promote narrow points of interest but to advocate a larger policy approach to

222

European Security and Defense Identity (ESDI)

the IGC. As one permanent representative and

IGC negotiator noted in a personal interview in
July 1996, the ERT's purpose is "to orient and influence European decisionmaking . . . at the beginning of the debate .... [The ERT's role] is not
so much as a lobbyist ... but as a group of individuals who have a certain view of what Europe
should look like-and they are willing to put
money on the table [to promote these views]."
Since its inception, members of the ERT have
preferred to promote their views in private discussions with national and European government officials, in formal reports to European opinion
leaders, and in contacts with the European media.
Even though avoiding a public role, the ERT has
grown in visibility over the years. As a result, the
ERT has increasingly come under attack by
groups who charge that the big business organization has unduly influenced European policymaking to the detriment of larger societal interests.
ERT members formally meet twice a year in
plenary sessions that serve as the organization's
primary decision- and policymaking sessions
(Cowies, 1995b). Usually held in the member
state holding the Council presidency, the plenaries
also provide an opportunity for ERT members to
hold direct meetings with leading government officials-including prime ministers, foreign ministers, and central bank presidents. The ERT Steering Committee, made up of seven members and
headed by the ERT's chairman, is responsible for
the organization's overall political strategy. This
core group deterrnines the ERT's primary foci,
arranges telephone and face-to-face meetings with
heads of state and government, and discusses the
timing of ERT activities.
In addition, the ERT has several policy groups
that focus on issues such as competitiveness and
bench marking, export controls, the environment,
North-South relations, Central and Eastern Europe
and Russia, and employment-Iabor markets. ERT
associates--designated company officials who
work on ERT matters-generally run the policy
groups and play an important behind-the-scenes
role in the organization. In recent years, several
members have hired major European political figures to serve as their ERT associates. In 1997, for
example, ERT associates included Riccardo Perrissich of Pirelli, former director-general of directorate-general III (industry) during the Delors
commission; Elmar Brok of Bertelsmann, adviser
to German chancellor Kohl and member of both

the European Parliament and the IGC reflection

group; and Paavo Raantanen, former foreign minister and ambassador of Finland.
The ERT also holds ad-hoc meetings for specific events. In September 1993, for example, ERT
members met with French prime minister Edouard
Balladur to express their concerns regarding the
status of the Uruguay Round GATT negotiations.
The following year, an ERT delegation went to
Moscow, where they met with Prime Minister Victor Chernomyrdin to discuss market access, legal
reform, and investment opportunities in Russia.
Since 1988, the ERT secretariat has been 10cated in Brussels. Secretary-General Keith
Richardson, who joined the ERT that same year, is
widely recognized as a key force behind the ERT
and its development. As of 1997, seven full-time
staff as well as several part-time outside consultants were working in the ERT secretariat.
See also ECONOMIC AND MONETARY UNION;
SINGLE MARKET PROGRAM.

Bibliography
Cowles, Maria Green. 1995a. "Setting the Agenda for a
New Europe: The European Round Table of Industrialists and EC 1992." Journal of Common Market
Studies 33, no. 4 (December), pp. 501-526.
- - . 1995b. ''The European Round Table of Industrialists: The Strategie Player in EU Affairs." In
Justin Greenwood, ed., European Business Allianees, pp. 225-236. Herts, UK.: Prentiee-Hall.
--.1996. "Business Means Europe: Who BuHt the
Market?" In Martyn Bond, Julie Smith, and William
Wallaee, eds., Eminent Europeans. London: Greyeoat Press.
European Round Table of Industrialists (ERT). 1991.
Reshaping Europe. Brussels: ERT.
--.1992. Rebuilding Confidence. Brussels: ERT.
--.1993. Beating the Crisis. Brussels: ERT.
- - . 1994. European Competitiveness: The Way to
Growth and Jobs. Brussels: ERT.
--.1995. Educationfor Europeans. Brussels: ERT.
Krause, Axel. 1992. Inside the New Europe. New York:
HarperCollins.

-Maria Green Cowles

European Securlty and Defense

Identlty (ESDI)
The Treaty on European Union mentioned the development of a European Security and Defense
Identity (ESDI) as an important step in the evolu-

European Standards Committee (CEN)

tion of European integration. The two potentially

controversial aspects of an ESDI were the fonn it
would take and its impact on NATO-and more
broadly on U.S.-European relations. Some EU
member states saw the ESDI as an opportunity to
emphasize Europe's independence ofWashington;
others argued that the ESDI should be anchored
finnly in NATO. The TEU itself suggested the
fonn that an ESDI would take: a revived Western
European Union (WEU) linked to the EU's Common Foreign and Security Policy. In the aftennath
of the Cold War and with the lessons of Bosnia
obvious to all, a consensus emerged among Europeans on the need to keep the United States militarily engaged in Europe and on the danger of advocating an independent ESDI. Thus reassured, at
the NATO summit of January 1994 the Atlantic
Alliance gave its full support for the deve10pment
of ESDI, with the EU and WEU as the main tools.
NATO proc1aimed that the transatlantic link
would be reinforced by the strengthening of the
European pillar of the Atlantic Alliance and that
the establishment of the ESDI would enable the
European allies to take more responsibility for
managing their security and defense. The U.S.-EU
New Transatlantic Agenda (1995) further endorsed the ESDI.
See also COMMON FOREIGN AND SECURITY
POLICY; WESTERN EUROPEAN UNION.

European Soda. Fund (ESF)

As part of its social policy provisions, the Treaty
of Rome (Artic1es 123 to 128) established a European Social Fund (ESF) to finance training and relocation prograrns for displaced workers. The ESF
is an important instrument of structural policy,
which aims to promote economic and social cohesion in the EU. Since the refonn of structural policy-and doubling of the structural funds-in
1988, the ESF has contributed greatly to fighting
long-tenn unemployment and facilitating the occupational integration of young people through
vocational training, subsidies for recruitment in
newly created jobs, and promotion of self-employed activities.
See also COHESION POLICY; SOCIAL POLICY.

European Space Agency (ESA)

The European Space Agency (ESA) is a consortium of countries that produces the Ariane rocket

223

launcher used to send commercial satellites into

orbit (France's Aerospatiale is the primary contractor). The ESA succeeded the European
Launch Development Organization (ELDO), established to riYal the U.S. space prograrn. Despite
the June 1996 launch failure of the Ariane-5
rocket, the ESA has areputation for cost effectiveness and competence. Ariane rockets are launched
from the European Space Center in Kourou,
Guyana, where the ESA opened a new control
center in January 1996. The agency's large operating costs, as well as unprecedented developments
in telecommunications technology and policy (Ariane generally launches communications satellites), suggest that the ESA's nature and composition may change markedly in the near future.

European Standards
Commlttee (CEN)
The European Standards Committee (CEN) is an
organization of EU member state standards bodies
such as the Gennan and the British standards institutes, which are in turn composed of representatives
from national industry. The goal of CEN is to develop Europe-wide product standards, both those to
which manufacturers adhere voluntarily and those
needed to demonstrate compliance with EU directives. Standards are developed within committees
of experts drawn largely from industry, that is, companies that are members of CEN's national constituent associations. CEN and its companion body
CENELEC (European Electrotechnical Standards
Committee) play a vital role in the development of
the single internal market by producing the detailed
technical standards needed to demonstrate compliance with the general "essential requirements" set
forth in most EU product safety directives under the
new approach. These standards, known as European Norms (ENs), may, among other objectives,
ensure compatibility of products; set out minimum
levels of safety, quality, or efficiency; and establish
procedures for testing or assessing conformity with
these requirements. Adherence to an EN standard is
presumed to demonstrate compliance with the applicable directives and thus allows producers to offer goods freely throughout the EU; over time, ENs
are expected to overtake national standards as the
primary methods of demonstrating adherence to essential requirements. Following criticism of CEN
for its closed membership and opaque processes in
the early years of the drive toward the single mar-

224

European Strategie Program for Research and Development in Information Technology (ESPRIT)

ket, CEN (and CENELEC) also took on responsibilities for liaison with non-European standards
groups such as the American National Standards
Institute. As European bodies, CEN and CENELEC have elose links with the International Standards Organization (ISO) and International Electrotechnical Committee (lEC) respectively as weil
as with Central and Eastern European standards organizations.
See also REGULATORY POLICY; SINGLE MARKET PROGRAM; STANDARDS AND CONFORMITY AsSESSMENT.

European Strategie Program

for Research and Development
In Information Teehnology
(ESPRIT)
The European Strategie Program for Research
and Development in Information Technology
(ESPRIT) was one of the EC's earliest initiatives
in the field of technological research and development. ESPRIT originated in a climate of acute
difficulty for Europe's high-technology sector,
not least because of intensive competition from
the United States and Japan. Under the circumstances, manufacturers, politicians, and government officials became more susceptible to the
idea that eloser collaboration under the EC's auspices held the key to European industry's survival
and success. By contrast, the notion of national
champions became increasingly outmoded.
Etienne Davignon, Commission vice president
with responsibility for industrial affairs between
1981 and 1985, took the lead in promoting Community-wide technological collaboration. By cultivating the chief executive officers of major European manufacturers in the high-technology sector,
Davignon developed powerful industrial support
for cross-border collaboration. In May 1982 the
Commission unveiled aproposal, "Toward a European Strategic Program for Research and Development in Information Technology," that the Council
of Ministers, already lobbied by Davignon's group
of European manufacturers, approved the following
June. The ensuing ESPRIT program called for major European manufacturers, smaller firms, universities, and institutes throughout the Community to
collaborate on "precompetitive" or basic research.
That distinction helped reduce friction between the
industrial participants and satisfy the concerns of
the Commission's competition watchdog. A pilot

scheme of thirty-eight projects, funded by the Community and the private sector, got underway in
1983. The EC launched a fuil-fledged ESPRIT the
following year.
ESPRIT facilitates partnerships and joint
ventures among representatives of government,
industry, universities, and research institutes. Programs are concerned with information technology,
specifically microelectronics (the manufacture of
semiconductors), the manufacture of computer
equipment, and software and systems design.
Originally managed by directorate-general (DG)
XIll (telecommunications, information, and innovative industry), following a Commission reorganization in 1993 responsibility for ESPRIT was
given to DG m (industry).
See also RESEARCH AND TECHNOLOGICAL DEVELOPMENT.

European Survelllanee
Authorlty (ESA)
The European Surveillance Authority (ESA) was
established by the European Free Trade Association (EFTA) in 1993 to oversee competition policy
in Iceland, Liechtenstein, and Norway, the three
EFTA countries that, together with the EU, form
the European Economic Area (EEA). It was necessary to establish the ESA to ensure compliance
with EEA commitments after the European Court
of Justice (ECJ) rejected a proposed EEA court,
which would have ensured compliance with the
EEA's obligations but would also have superseded
the ECJ, thereby necessitating unacceptable
changes in the Treaty of Rome.
See also EUROPEAN EcONOMIC AREA.

European System of Central

Banks (ESCB)
The European System of Central Banks (ESCB),
consisting of the European Central Bank (ECB) and
national central banks, will formulate and implement monetary policy for the euro zone. Thus, the
ESCB will conduct foreign exchange operations,
hold and manage the official foreign reserves of the
participating member states, promote the smooth
operation of payments systems, advise EU institutions and national authorities within its field of competence, and collect relevant statistical information.
See also ECONOMIC AND MONETARY UNION:
TOWARD A SINGLE CURRENCY.

European Union (EU)

European Telecommunlcatlons
Standards Institute (ETSI)
The European Telecommunications Standards Institute (ETSI) harmonizes telecommunications
standards in the EU by developing mandatory
norms called Common Technical Regulations
(CTRs).
See also EUROPEAN STANDARDS COMMITIEE;
REGULATORY POLICY; STANDARDS AND CONFORMITY ASSESSMENT.

European Trade Union

Confederatlon (ETUC)
The European Trade Union Confederation
(ETUC) is a highly influential interest group of
national trade unions and trade union confederations in the EU. Reflecting European labor's early
skepticism about integration (many trade unionists
saw the EC as inimicable to workers' interests),
ETUC was established only in 1973, with its
headquarters in Brussels. ETUC became prominent a decade later when, in conjunction with the
single market prograrn, the Comrnission proposed
a charter of workers' rights (the so-called Social
Charter). Although the Social Charter never became law, it was the basis for the social protocol
attached to the Treaty on European Union (TEU),
which excluded Britain from its provisions until
Britain opted back in under the terms of the 1997
Amsterdam Treaty. Under the terms of the TEU
(as amended by the Amsterdam Treaty)-and in
keeping with established Comrnission practiceETUC is one of three "social partners" with which
the Comrnission negotiates draft social and economic policy legislation. The other partners are
the Union of Industrial and Employers' Confederations of Europe (UNICE) and the European Center of Public Enterprise.

European Trade Union Institute

Founded in 1978 on the initiative of the European
Trade Union Confederation, the European Trade
Union Institute analyzes social, economic, and political developments in the EU that are especially
relevant for workers.

European Union (EU)

European union has always been the objective of
European integration. A common analogy de-

225

scribed European union as the destination toward

which the EC train was headed. But European
union was an ill-defined terminus. Despite many
exhortations over the years, there was never a
clear idea of what a union would look like. Thus
the preamble of the Treaty of Rome called for "an
ever closer union" among the peoples of Europe;
the Paris sumrnit in October 1972 was famousor infamous-for declaring that "the me mb er
states of the Community, the driving force of European construction, affirm their intention before
the end of the present decade to transform the
whole complex of their relations into a European
Union"; the European Council in Stuttgart in June
1983 adopted a Solemn Declaration on European
Union; and the preamble of the Single European
Act affirmed that European union was the ultimate goal of European integration. Yet none of
these documents or initiatives spelled out exactly
wh at the competence or structure of the EU
would be.
The European Parliament's Draft Treaty Establishing the European Union was the first coherent and reasonably detailed description of a putative EU. According to the Draft Treaty, the EU
would incorporate the existing Communities' institutional structure and competences but include
numerous institutional reforms and additional
competences, notably in the field of foreign and
security policy. In deference to member states'
sensitivities to the centralization of power in Brussels, the Draft Treaty explicitly mentioned the
principle of subsidiarity.
It was not until the late 1980s, however, that a
combination of circumstances in Western and
Eastern Europe-notably the success of the single
market program, growing support for Economic
and Monetary Union (EMU), and imminent German unification-led the member states to convene two intergovemmental conferences (IGCs) in
1990 that resulted in the Treaty on European
Union (TEU). In it the member states defined European union for the first time and, indeed, established the EU. The treaty declared that the EU is
founded upon the European Communities supplemented by an intergovernmental Common Foreign and Security Policy (CFSP) and intergovernmental Cooperation on Judicial and Horne Affairs.
The treaty sets out the union's objectives: to promote economic and social progress, to assert the
EU's identity on the international scene, to
strengthen and protect the rights of EU citizens, to

226

European United Left

develop elose cooperation on justice and horne affairs, and to maintain in full the body of existing
Community law. At the same time, one of the
treaty's Common Provisions states that the TEU
"marks a new phase in the process of creating an
ever-eloser union among the peoples of Europe."
The TEU was to have been implemented on
January 1, 1993. However, Denmark's narrow rejection of it in a referendum on June 2, 1992,
sparked a ratification crisis throughout the EC.
Eventually the ratification crisis-in the narrowest
sense-was solved by concessions made to Denmark at the European Council in Edinburgh, on
December 11 and 12, 1992, and approved in a second Danish referendum on May 18, 1993. But in
the broader sense of the new EU's legitimacy,
credibility, and confidence, the ratification persisted well beyond the TEU's eventual coming
into force on November 1, 1993.
The EU's first enlargement-the accession of
Austria, Finland, and Sweden on January 1,
1995-failed to dispel the atmosphere of gloom
brought about by the TEU ratification debac1e and
deepened by a lingering economic recession, in
which preparations took place for an IGC to review the treaty. Unlike previous IGCs, which were
the culmination of a process of deepening integration, the 1996 IGC took place only because it was
mandated by the TEU. Doubtless there were cogent reasons in any case for holding another
IGC-the TEU was c1early flawed and the inevitable accession of numeroUS Central and Eastem European countries made institutional reform
imperative-but in the prevailing political climate
neither the Commission nor the member states
were eager to launch another round of negotiations. Hence the desultory nature of the 1996--1997
IGC, culminating in the Amsterdam Treaty, which
failed to bring about the kinds of sweeping reforms
that, by any objective measure, the EU urgently
needs.
The inadequacy of the Amsterdam Treaty is
symptomatic of the EU's situation in the late
1990s. On the one hand, the EU is about to embark on the third stage of EMU; on the other hand,
it seems incapable of confronting the challenge of
enlargement into Central and Eastem Europe. The
EU's indecisiveness reflects the member states'
uncertainty in the face of a rapidly changing
post-Cold War political-security and global political-economic environment. New strains and ten-

sions in the EU are putting old standards and

tenets to the test: Will France and Germany continue to overcome their differences and provide
strong leadership? Will the large and small member states continue to pull together? Will the EU's
institutional structure continue to absorb serious
political and economic shocks? The course of European integration has always been difficult to divine, and the EU's current predicament makes
predicting the EU's future even more hazardous
and exacting. One thing, at least, is sure: the EU
established in 1993 and reformed in 1997 is neither final nor definitive. In that sense, European
union remains an uncertain destination.
See also AMSTERDAM 'fREATY; 'fREATY ON EuROPEAN UNION.

European Unlted Left

See PARTY GROUPS IN THE EUROPEAN PARLIAMENT.

European Unlverslty-Industry
Forum
In 1988 the European Round Table of Industrialists established the European University-Industry
Forum to bring together rectors, presidents, and
vice-chancellors of European universities to promote curriculum changes to prepare students for
"life-long learning."
See also EUROPEAN ROUND TABLE OF INDusTRIALISTS.

European Unlverslty
Institute (EUI)
The European University Institute (EUI) is an EUfunded institute for doctoral research and scholarship on European affairs (with concentrations in
history, economics, law, and culture). EC member
states signed a convention establishing the EUI in
1972, and the institute officially opened in 1976 in
a former monastery outside Florence. The institute
houses the EU's archives.

European Women's
Lobby (EWL)
The European Women's Lobby (EWL) is a large
and influential pressure group founded in 1990 to
promote the interests of women in the EU. Apart

Europe of Nations Group

from its impaet on EU social poliey, the EWL is

signifieant beeause it arose direetly from the initiatives of a group of women in the Commission
itself.

European Works
Counclls (EWCs)
European Works Couneils (EWCs) are made up of
representatives of management and labor within
transnational eompanies or organizations operating in the EU. The purpose ofthe eouneils is to faeilitate worker eonsultation and information on
deeisions regarding eompany operations. Eaeh
eouncil may eonsist of up to thirty members and
meets at least onee a year. Subeommittees may be
formed on an ad hoc basis to focus on issues regarding employee-manager relations and strategie
decisionmaking.
EWCs are mandated under the provisions of
the European Works Couneils Direetive, one of
the most eontroversial pieces of legislation in the
EU's history. The direetive originated in the infamous draft Vredeling direetive of 1980 (named after the eommissioner for social poliey), whieh
proposed expanding workers' information and
eonsultation rights in multinational eompanies.
Whereas previous proposals relating to information and eonsultation in the workplaee had largely
followed eurrent member state praetiees, the Vredeling direetive went weIl beyond existing provisions at the national level by requiring multinationals to give employees details of the eompany's
entire operations, inc1uding those outside the Ee.
Lingering Eurosc1erosis and resurgent neoliberalism pushed social poliey onto the baek burner in
the early 1980s, and the draft direetive languished.
The Commission returned to the eharge in the
late 1980s, when President Jaeques Delors proposed a eharter of workers' rights (the so-ealled
Soeial Charter) to eomplement the single market
program. Under the auspiees of the Social Charter,
the Commission proposed a European Works
Couneil Direetive to involve employees direetly in
major deeisions of a "European Company"-a
new legal entity that eould operate throughout the
EU and be govemed by a single EC law direetly
applieable in all member states. The proposed
Works Couneil Direetive provoked bitter resistanee from the British govemment, whieh
adamantly opposed anything that smaeked of so-

227

eialism and workers' rights. At the Maastrieht

summit in Deeember 1991, Prime Minister John
Major negotiated a British opt out from the Social
Chapter of the Treaty on European Union; the
other member states then attaehed a protoeol to
the treaty in order to pursue social poliey among
themselves.
The Works Couneil Directive was eventually
passed in 1994 under the social protocol (thereby
bypassing British opposition and exc1uding Britain
from its provisions, until a new British govemment
signed the Social Chapter in 1997). By the time the
directive was adopted, more than thirty agreements
eoneerning information and eonsultation were already in use in the EU, mainly in Freneh and German multinationals. Although Britain was not associated with the directive, many companies based
there made voluntary agreements on worker eonsultation and information.
See also SOCIAL POLICY.

Europe by Satellite (EBS)

Europe by Satellite (EBS) is an EU-sponsored
satellite information serviee available to television
eompanies throughout Europe and the Mediterranean region. EBS offers a daily fare of illustrated news, live eoverage of events, and press
eonferenees.

Europe Day (May 9)

Europe Day is an annual eelebration of Freneh
foreign minister Robert Sehuman's famous declaration on May 9, 1950, ealling for a pooling of
Franeo-German eoal and steel resourees and
thereby laying the foundation for the EU.
See also SCHUMAN, ROBERT.

Europe of Nations Group

The Europe of Nations group was a short-lived
politieal group in the European Parliament, made
up of Freneh and Danish opponents of further integration and some Duteh members. It was also
known as the DeVillers list, after its leading member, a prominent Freneh Euroskeptie. The group
was dissolved in November 1996, after whieh its
members were nonaffiliated.
See also PARTY GROUPS IN THE EUROPEAN
PARLIAMENT.

228

Europe of the Regions

Europe of the Regions

EUROSTAT

"Europe of the regions" is a catchphrase referring

to the importance of regional development in the
EU and the necessity to involve regional authorities in the integration process.
See also COMMITfEE OF THE REGIONs.

See

EURO POL
See EUROPEAN POLICE OFFICE.

EUROPOL Drugs Unit

The European Drugs Unit, which is located in
The Hague, is part of the European Police Office
(EUROPOL), the EU's fledgling police agency.
Although ratification of the EURO POL convention was delayed by a dispute between member
states over the role of the Court of Justice, the
drugs unit became operational in the 1994. The
unit has about one hundred agents and thirty-five
liaison officers and conducts approximately one
thousand actions annually.
See also EUROPEAN POLICE OFFICE; JUSTICE

STATISTICAL OFFICE OF THE EUROPEAN COM-

MUNITIES.

Euro-X
Euro-x is an informal council of finance ministers
of countries participating in the final stage of Economic and Monetary Union. "Euro" refers to the
single currency, "x" to the variable number of participating member states. Euro-x originated in a
French proposal to establish a political counterweight to the independent European Central Bank
(ECB). Germany and like-minded member states
had no intention of undermining the ECB's independence or comrnitment to price stability, but
saw in euro-x a forum for discussions among
euro-zone countries about maintaining fiscal discipline or setting the euro's exchange rate. Thus,
the European Council endorsed the euro-x proposal at the December 1997 Luxembourg summit.
Much to the new Labour government's disappointment, as a noncharter euro-zone member
state Britain was exc1uded from initial euro-x
membership.

AND HOME AFFAIRS.

Euro Zone
Eurosclerosls
The term Eurosclerosis refers to the stagnation,
inflation, and unemployment that followed the oil
shock of 1973-when the price of oil quadrupled
as a result of the Arab oil producers' embargo and
cartelization in the aftermath of the Middle East
war. Eurosc1erosis lasted until the early 1980s.
Because the EC's member states tended to respond to the economic setbacks of the 1970s individually rather than collectively, Eurosc1erosis is
synonymous with little or no progress on European integration.

Euroskeptic
The term Euroskeptic refers generally to an opponent of further integration and specifically to a
right-wing British opponent of the EU. As a large
and vocal group in the British Conservative Party,
Euroskeptics had a disproportionate influence on
the British government's policy toward the EU until the Labour Party's victory in the May 1997
general election.

Member states participating in the irrevocable fixing of exchange rates-Stage 3 of Economic and
Monetary Union (EMU)-will form the euro zone
(i.e., the zone within the EU-and possibly eventually encompassing all the EU-where the euro
will be legal tender).
See also ECONOMIC AND MONETARY UNION:
TOWARD A SINGLE CURRENCY.

Ewes

See EUROPEAN WORKS COUNCILS.

EWL
See EUROPEAN WOMEN'S

LoBBY.

Exchange Rate Mechanlsm

(ERM)
The Exchange Rate Mechanism (ERM) is the core
of the European Monetary System (EMS), an initiative launched in March 1979 to establish a zone
of relative monetary stability in a world of wildly

External Frontiers Convention

fluctuating exchange rates. The ERM allows participating states' currencies to fluctuate relative to
each other only within predetennined bands, originally 2.25 percent but now within 15 percent of
agreed central rates (except for the German mark
and the Dutch guilder, which move in a 2.25 percent band). The ERM underwent a number of realignments in the early 1980s and again in the
early 1990s during the currency crises that precipitated the departure of the British pound and the
Italian lira.
See also EUROPEAN MONETARY SYSTEM.

Exchange Rate Mechanlsm 11

(ERM 11)
Modeled on the pre-single currency Exchange
Rate Mechanism (ERM), an ERM 11 will regulate
relations between the euro (the single currency)
and other EU currencies (i.e., the currencies of EU
member states not participating in Stage 3 of Economic and Monetary Union). The European
Council decided on the framework of ERM 11 in

229

Dublin in December 1996, based on proposals

drafted by the Council of Economic and Finance
Ministers (ECOFIN) and the European Monetary
Institute, and adopted a resolution setting out the
mechanism's principles and fundamentals at the
Amsterdam summit in June 1997. ERM 11 will
provide for relatively large fluctuation margins for
noneuro currencies in relation to the euro. The European System of Central Banks (ESCB) and the
national central banks of noneuro member states
will intervene to maintain currency parities within
the fluctuation limits (15 percent).

Extemal Frontiers Conventlon

The Extemal Frontiers convention, an elaborate
set of roles for coordinating visa applications in
the member states, is one of a number of measures
intended to develop an EU immigration policy.
Held hostage to a dispute over Gibraltar between
Britain and Spain, the convention has not been implemented.
See also JUSTICE AND HOME AFFAIRS.

F
Federallsm
The terrible experience of World War I evoked in
Europe a growing interest in the federal idea. After
the war, Count Richard Coudenhove-Kalergi, an
Austrian aristocrat, propagated European union as
the way to restore Europe's declining power in relation to Russia and the United States (Coudenhove-Kalergi, 1926). In 1929 French foreign minister Aristide Briand proposed a union as a
framework for peaceful relations among France,
Gennany, and other European states. More structured federalist proposals were made in the late
1930s by such British writers as Lord Lothian, Lionel Robbins, and William Beveridge, who were
alanned at the drift of Europe's sovereign
nation-states toward another great war (Mayne and
Pinder, 1990; Pinder, 1986b). Their writings
reached Altiero Spinelli, confined by Mussolini on
the island of Ventotene. Spinelli, together with fellow political prisoners, was inspired to produce the
Ventotene Manifesto, which has remained a basic
document for the postwar federalist movement.
The federal idea was already gaining ground
among the Resistance in occupied countries, and in
1944 Spinelli organized a meeting in Geneva of
Resistance representatives from a number of countries (Lipgens, 1984). The scene was set for a
resurgence of federalism after the end of the war.

Federalism After World War /I

In the rnid-1940s, the idea of pennanent peace secured by federation became widely popular
among many whose countries had suffered most
from the war, and a European federalist movement
was established (Lipgens, 1986). One wing of the
movement, based mainly in France and deriving

its philosophy from Pierre-Joseph Proudhon, emphasized the importance of local autonomies in
the econornic and social as weIl as political fields.
Although this wing did not prevail in the federalist
movement as a whole, its ideas presaged the
growth of federal structures within European
states such as Austria, Gennany, and later Belgium, with increasing devolution also in Spain,
ltaly, France, and elsewhere (Burgess, 1986). This
wing, however, lacked a precise concept of a federal European constitution.
The other wing of the movement, called
Harniltonian because it was based on principles
derived from the Founding Fathers of the United
States, worked for a constitution dividing the powers of government between a federal Europe and
its member states, with democratic institutions at
each level and with federal powers in fields of
common interest, such as security and econornics.
This wing, strongest in Gennany, Italy, and the
Netherlands, became more influential, and its
ideas gained widespread public support on the
continent. But it made little headway in countries
that had escaped wartime occupation, and the
British government in particular opposed proposals for anything beyond intergovernmental cooperation. Nor were most of the other governments,
as they began to recover their authority in the
postwar period, ready to take the plunge to a fully
federal constitution. It was Jean Monnet who devised a way to break out of this irnpasse.
Monnet's method was to put in place successive elements of federal powers and institutions as
problems arose that they could help to solve. Thus
federalism was seen as a process, not a single constitutional act. Although this has by now been the
principal fonn of federalist action in Europe for
nearly half a century, it has received lirnited acadernic attention (Friedrich, 1968; Pinder, 1986a,
1993, 1995). The process has generally been seen
as a neofunctionalist phenomenon, with emphasis
on leadership by a supranational executive relying
on "spillover" of integration from one sector to another; and most of the literature has ignored the
idea that a process of integration may be promoted
by people with the aim of building up federal powers and institutions through aseries of specific
steps. Such federalists have included Monnet,
Spinelli, Jacques Delors, and many others, who
have secured for each step the support of more conventional econornic, social, or political interests.

231

232

Federalism

Federal Development of the EC

In 1950, Monnet saw the need for France and Ger-

many to place under a common authority the coal

and steel industries that had been the basis for
their war potential. He explicitly identified this, in
the Schuman Declaration, as "the first concrete
foundation of a European federation which is indispensable for the preservation of peace." The
proposal led to the establishment of the European
Coal and Steel Community (ECSC), with the ultimate aim of political union supported by the leaders of France, Germany, Italy, and the Benelux
countries (the six founding member states). The
Community's institutions prefigured those of a
federation, with the High Authority (precursor of
the Commission) as executive, the Court of Justice
as judiciary, and the Assembly (later called the
European Parliament) and Council as the house of
the people and the house of the states. But the
ECSC was only a first step toward a federation,
with narrow competences and a weak Assembly. It
was soon followed by draft treaties to set up a
quasi-federal European Defense Community and
European Political Community, but nationalists in
the French parliament secured their rejection in
1954. This caused the federalist movement to
split, some pursuing Monnet's approach of steps
toward federation and others following Spinelli in
demanding a convention to draft a federal constitution (Mayne and Pinder, 1990, pp. 123-127).
Monnet's approach soon had a second success. In establishing the European Economic
Community (EEC) in 1958, the member states
greatly enlarged the field of competence of institutions with the federal characteristics of those of
the ECSC, thus consolidating their capacity to
provide a framework for peace. At the same time
the new competences enabled the Community to
respond to the challenge of U.S. economic prosperity and power by establishing a common market with a common extemal tariff and by providing for wide-ranging economic cooperation. Thus
Community institutions, with their significant federal elements, became responsible for substantial
economic powers.
What some federalists call a pre-federal
Community was by then solidly enough based to
continue its progress, if at a slower pace, through
the 1960s and the 1970s. In the 1960s its federal
elements were under attack by French president
Charles de Gaulle. In the 1970s a combination of
economic turbulence and the antifederalist gov-

emment of the newly joined United Kingdom

likewise put a brake on further federal developments. The federalist spirit of France's five partners had, however, remained strong through the
1960s; and in the 1970s the European Parliament
(EP) acquired real budgetary powers, an essential
element in a federal system. Then the first European direct elections were held in 1979.
Federalists continued to influence the Community and its potential for development through
the 1970s and, with growing success, the 1980s
(Burgess, 1989). Spinelli, who remained a great
federalist leader, was elected to the EP in 1979 and
set about persuading the Europarliamentarians that
they should counter the stagnation then afflicting
the Community by drafting a constitution for a federal European union. He persuaded the EP to set
up a special committee for that purpose and got it
to draft a treaty of European union that would provide the Community with federal institutions and
powers in the economic, social, and environmental
fields. But the Draft Treaty Establishing the European Union left security and foreign policy for the
time being as matters for cooperation among member states (Bieber, Jacque, and Weiler, 1985). Thus
it may be said to have provided for a federal union
but not yet a federal state.
Spinelli secured backing from French president
Fran~ois Mitterrand for the Draft Treaty and this, together with the proposal of Commission president
Jacques Delors to complete a single market by
1992, led to the Single European Act (SEA), which
entered into force in 1987. The SEA and the Treaty
on European Union (TED), which became operative
in 1993, added substantial further federal elements
to the structure of the Community. Delors was the
federalist who promoted these developments, with
crucial support from Mitterrand, who had a general
commitment to political union, and from German
chancellor Helmut Kohl, who increasingly came to
embody the federalist ideals that he had absorbed as
a young man in Germany after World War ll. The
SEA provided for a vast program of legislation to
create the single market and for the majority voting
in the Council that was essential to enact it, together
with a cooperation procedure that gave the EP legislative influence, though not much power. The SEA
also gave the Community environmental powers.
The SEA and the success of the single market program paved the way for the TEU (Duff, Pinder, and
Pryce, 1994). This provided for the single currency
and at the same time established the federal princi-

Federalism
ple of subsidiarity, which reserves to the member
states all powers not required by the EU in their
common interest. The treaty introduced the concept
of EU citizenship and gave the EP considerable new
powers, inc1uding co-decision, which placed it on a
par with the Council for a significant part of legislation, on top of a wide extension of the cooperation
procedure and the right to approve (or not) the appointment of the Commission (Corbett, 1994). The
TEU also erected two new "pillars" alongside the
Community, to deal with internal and external security, and named the whole structure of the Community together with the new pillars the European
Union. But the latter was largely intergovemmental,
and federalists predicted it would remain ineffectual
until reformed in a federal direction.

The EU: How Federal?

The EU now has substantial federal powers and institutions. When the single currency project is complete, its economic powers will be about as extensive as those of the United States; it has
environmental powers and a small but significant
budget. Thus it has the main powers of a federal
union in the economic and environmental fields,
though as long as the system for internal and external security remains intergovemmental it will not
become a federal state. The Community's legal system "possesses most of the characteristics of a federation" (Hartley, 1988, p. 47). The Council, in
which the procedure of qualified majority voting
applies for most legislation, is approaching a federal house of the states for the EU, after the pattern
of the German Bundesrat in which the Lnder govemments are represented. The EP, as the house of
the people, has important legislative and budgetary
powers as well as the right to approve a new Commission, which resembles a federal executive. But
the Council still dominates both legislative and executive functions to an extent that would not be
possible in a genuinely federal system. Thus a few
crucial steps remain to be taken to create a federal
union: to give the EP a full power of legislative codecision; to curb the Council's executive role, probably through use of the EP's powers in order to
make the Commission a parliamentary executive;
to introduce the single currency in aH member
states; and overarching these, to draw up a constitution based on the existing structures thus reformed
and thereby give the union asound juridical basis
that is comprehensible to the citizens. Most federalists accept that the transfer of powers over security

233

to the federal institutions can wait until confidence

in them is sufficiently mature, at which time it will
be possible to convert the EU into a federal state.

Prospects for Federal Europe

The neorealist school predicts that Europe will not
become federal, insisting instead that the
nation-state will remain the only viable unit. Euroskeptics share this view and hope that, as the
Union is enlarged to Central and Eastern Europe
and the number of member states rises to thirty or
more, the federal elements in its institutions will be
diluted and perhaps swept away. Although most of
the EU's citizens view its institutions more favorably, there has been a wave of unease, following the
TEU, about their remoteness and complexity.
Federalists can respond that aH the member
states, save Britain and Denmark, were prepared
to accept the inc1usion of the federal goal in the
TEU; that the new Labour govemment in Britain
may weH be more positive; and that if Britain and
others remain obdurate, a nucleus of federally
minded member states may proceed together toward the federal goal. Enlargement, federalists
can claim, has always in the past been accompanied by the addition of new federal elements.
Moreover, there is evidence that the EU's citizens
do not object to the federal idea: for example, in a
survey in late 1995,45 percent were found ready
to accept a federal structure for the union, with
only 15 percent against. Among the supposedly
antifederalist British, the proportion in favor was
the same, and no more than 19 percent took the
contrary view (Commission, 1996). Federal Europe is a great and difficult project that can in no
way be taken for granted, but federalists have
grounds to believe that it will eventually succeed.
See also COUNCIL OF MINISTERS; DECISIONMAKING PROCEDURES; EUROPEAN PARLIAMENT; INTEGRATION THEORY; MONNET, JEAN.

Bibfiography
Bieber, Roland, Jean-Paul Jacque, and Joseph H.H.
Weiler, eds. 1985. An Ever Closer Union: A Critical
Analysis 01 the Draft Treaty Establishing the European Union. Brussels: Comrnission of the European
Comrnunities with the European University Institute.
Burgess, Michael. 1986. Federalism and Federation in
Western Europe. Beckenham, Kent: Croom Helm.
- - - . 1989. Federalism and European Union: Politicalldeas. Influences and Strategies in the European
Community. 1972-1987. London: Routledge.

234

Federal Republic of Germany

Commission. 1996. Eurobarometer: Public Opinion in

the European Union. Report no. 44. Luxembourg:
Office for Official Publications of the European
Communities.
Corbett, Richard. 1994. "Representing the People." In
Andrew Duff, John Pinder, and Roy Pryce, eds.,
Maastricht and Beyond: Building the European
Union. London: Routledge.
Coudenhove-Kalergi, Count Richard. 1926. Pan-Europe. New York: Knopf.
Duff, Andrew, John Pinder, and Roy Pryce, eds. 1994.
Maastricht and Beyond: Building the European
Union. London: Routledge.
Friedrich, Carl J. 1968. Trends oJ Federalism in Theory
and Practice. London: Pall Mall Press.
Hartley, T. C. 1988. The Foundations oJ European Community Law. Oxford: Clarendon Press.
Lipgens, Walter. 1982. A History oJ European Integration 1945-1947: The Formation oJ the European
Unity Movement. Oxford: Clarendon Press.
Lipgens, Walter, ed. 1984. Documents on the History oJ
European Integration. Vol. 1, Continental Plans Jor
European Union 1939-1945. Berlin and New York:
de Gruyter.
- - - . 1986. Documents on the History oJ European
Integration. Vol. 2, Plans Jor European Union in
Great Britain and in Exile 1939-1945. Berlin and
New York: de Gruyter.
Mayne, Richard, and John Pinder, with John Roberts.
1990. Federal Union: The Pioneers: A History oJ
Federal Union. Basingstoke: Macmillan.
Pinder, John. 1986a. "European Community and
Nation-State: A Case for a Neo-Federalism." International Affairs 62, nO.I.
- - . 1986b. "Federal Union 1939-1941." In Walter
Lipgens, ed., Document on the History oJ European
Integration. Vol. 2, Plans Jor European Union in
Great Britain and in Exile 1939-1945. Berlin and
New York: de Gruyter.
- - - . 1993. "The New European Federalism: The
Idea and the Achievements." In Michael Burgess and
Alain-G. Gagnon, eds., Comparative Federalism
and Federation: Competing Traditions and Future
Directions. New York: Harvester Wheatsheaf.
---.1995. European Community: The Building oJ a
Union. Oxford: Oxford University Press.

-lohn Pinder

Federal Republlc of Germany

See GERMANY.

Flnanclal Persectlves
See BUOOET.

Flnland

There are a surprising number of similarities between the policy priorities of Finland and the EU.
Perhaps the most important of these re1ates to coexistence with an unpredictable and enigmatic Russia.
For centuries, the Finns have seen themselves as a
border nation belonging to both West and East.
During the decades after World War n, Finland was
embedded relatively deeply in the informal Soviet
empire, doing its best to maintain as much freedom
as possible. This historical experience of being in
the middle Or belonging to both West and Bast provides a good point of entry to a brief analysis of
how Finnish-EU relations have developed.
The framework of Finnish foreign and security policy in the postwar decades has been called
constitutional realism (based on many of the ideas
of political realism). Finnish constitutional realism can be characterized as a judicial view of the
world, emphasizing the role of law and the legitimacy of international conduct instead of common
values (Hurn, 1995). The hard COre of constitutional realism was given concrete expression in
1947 by the multilateral Paris peace treaty and in
1948 by the bilateral Friendship, Cooperation, and
Mutual Assistance Treaty (FCMA) with the Soviet
Union. This hard core was, of course, supported
and supplemented by other international treaties
and by an active policy within the framework of
the Conference on Security and Cooperation in
Europe-now the Organization for Security and
Cooperation in Europe (OSCE). In 1990, as a response to revolutionary change in Central and
Eastern Europe, Finland reinterpreted both the
peace treaty and the FCMA Treaty, thus opening
the way for the decision in 1992 to apply for EU
membership (Huru, 1995; Penttil, 1994).
The main issues in the debate preceding the
advisory referendum of October 16, 1994, were
the economic consequences of membership, possible security implications, and the correct "reference group" for the country. Simply put, the debate was about the price of food and relations with
Russia. The outcome of the referendum was 53
percent in favor and 47 percent against membership. In absolute terms the result was 1.6 million yes votes against 1.2 million no votes, together representing 74 percent of all eligible
voters. Accordingly, Finland joined the EU on
January 1, 1995.
A brief analysis of the vote indicates two important lines of division. Proponents of member-

Finland

ship had a majority in the seven southernmost

administrative districts. Even more important, the
urban population not only in the south but also in
northern Finland voted for membership, whereas
support for membership among the rural population was weak. It seems reasonable to suggest that
the "Russian question" had no impact on voters
along the eastern border, who resented membership and were more concerned about the prospects
for Finnish agriculture in the EU. Security issues
had astronger impact on urban population and
male voters, who quite often listed the security
implications of accession among the reasons for
their support of membership.
Unlike the situation in neighboring Sweden,
opinion polIs in Finland indicate continuing support for membership. In economic terms, food
prices, for example, went down, but membership
did not significantly relieve unemployment even
though it contributed to general economic stability.
Monetary policy remained a source of speculation
until the markka entered the exchange rate mechanism of the European Monetary System on October 14, 1996, in order to perrnit Finland's early
participation in Economic and Monetary Union.
EU membership has not brought any visible
changes in foreign and security policy orientation.
Apart from EU membership, it is observer status
in the Western European Union (WEU), participation in the Partnership for Peace (PfP), and an active role in the OS CE and the UN that provide the
backbone of Finland's foreign and security policy.
The govemment entered the 1996-1997 intergovemmental conference (lGC) stressing the need to
continue the intergovernmental character of the
Common Foreign and Security Policy (CFSP).
Military crisis management is considered an integral part of CFSP, where all member states can
participate in decisionmaking but where they can
also retain the right to independent decisions. In
the "new Europe" of the post-Cold War period,
the need for peacekeeping and crisis management
operations is increasing. Accordingly, Finland and
Sweden drafted a proposal in April 1996 regarding
the development of a WEU capability for such
missions. For the foreseeable future, the Finnish
government does not see a need for a merger of
the WEU and the EU, which it successfully opposed at the June 1997 Arnsterdam sumrnit.
Finland supports international peacekeeping
and military crisis management operations while
at the same time maintaining an independent na-

235

tional defense. Recent weapons acquisitions, together with observer status not only in the WEU
but also in the North Atlantic Cooperation Council
(NACC), along with full participation in the pfp,
imply an improved situation in terms of military
security. Although the principle of military nonalignment has been one of the cornerstones of Finland's foreign and security policy since the end of
World War 11, it is no longer accepted without debate (Jalonen, 1995; Nokkala, 1995).
Finnish and EU foreign and security policy
interests most obviously converge in regard to relations with Russia. For Finland, the continuation of
reform in Russia is a key factor influencing the stability of northern Europe. Not surprisingly, the development of an EU strategy toward Russia is a
Finnish priority (Jalonen, 1994). Finland supported
Russian membership in the Council of Europe in
the hope that this would establish an additional
bond between Russia and the rest of Europe and
increase Russia's comrnitment to OSCE- and UNapproved codes of acceptable internal and extemal
behavior. Russo-Baltic relations are a source of
concern, and the Finnish govemment strongly supports Baltic membership in the EU as a compromise between the Baltic states' broad integrationist
aspirations and Russia's opposition to NATO enlargement to the gates of St. Petersburg. Finland itself is not considering NATO membership, but according to a Council of State report to parliament
in June 1995, Finland reserves the option to "assess its security situation and arrangements" if the
security situation in Europe changes essentially.
See also RUSSIA; TABLE 6; TABLE 10; APPENDIX 2; APPENDIX 3.

Bibliography

Alho, Kari, Mika Erkkila, and Markku Kotilainen. 1996.

The Economics and Politics 0/ Integration: A
Finnish Perspective. Dordrecht: Kluwer.
Huru, Jouko. 1995. "Finland at the Gates of the European Security Community." In Clive Archer and
Olli-Pekka Jalonen, eds., The Changing European
Security Landscape. Tampere Peace Research Institute, Research Report, No. 63.
Jalonen, Olli-Pekka. 1994. "SuOlni ja lhialueet." In
Petri Lempiinen, ed., Suomen ulkosuhteet 1990-1uvun Euroopassa: Talous ja turvallisuus. Helsinki:
Painatuskeskus.
- - - . 1995. ''Turva11isuusyhteisn sotilaa11inen ulottuvuus." In Jouko Huru and Olli-Pekka Jalonen, eds.,
Eurooppalaistuvan Suomen turvallisuushaasteet.
Tampere Peace Research Institute, Research Report,
No. 72.

236

FitzGerald, Garret (1926- )

Nokkala, Arto. 1995. "Suomen puo1ustuspolitiikka ja

yhteisllisyyden haaste." In Jouko Huru and OlliPekka Jalonen, eds., Eurooppalaistuvan Suomen turvallisuushaasteet. Tampere Peace Research Institute,
Research Report, No. 72.
Pentti1, Risto E.J. 1994. "Suomen ulko-ja turvallisuuspo1itiikan murros, 1985-1992." In Petri Lempiinen,
ed., Suomen ulkosuhteet 1990-luvun Euroopassa:
Talous ja turvallisuus. Helsinki: Painatuskeskus.

-Olli-Peklw. Jalonen

FitzGerald, Garret (1926- )

Garret FitzGerald, the Irish politician and statesman, strove to bring his country to the forefront of
European integration, first as foreign minister
(1973-1977) and then as prime minister
(1981-1982 and 1982-1987). As foreign minister,
FitzGerald presided over the Council of Ministers
during the first six months of 1975; as prime minister, he presided over the European Council during the last six months of 1984. FitzGerald sometimes had difficulty reconciling his obligations as
Ire1and's prime minister with his aspirations as a
European integrationist. His two most troubling
tasks were to assert Ireland's neutrality (with
which he disagreed) during discussions in European Political Cooperation about securityand defense issues and to protect Irish dairy farmers
from the consequences of badly needed reform of
the Common Agricultural Policy (CAP). On one
celebrated occasion, FitzGerald left a European
Council meeting in deference to the Irish agriculturallobby.
See also IRELAND.

Flag
The EU flag consists of a circle of twelve gold
stars set against a background of deep blue. According to the Commission's information service,
"the number of stars is invariable, twelve being
the symbol of perfection and entirety."

Flanking Measures
Flanking measures protect and buttress the single
market by ensuring fair competition, economic
and social cohesion, environmental measures, and
workers' rights.
See also COHESION POLICY; COMPETITION
POLICY; ENVIRONMENTAL POLICY; SOCIAL POLICY.

Flexlbility
Flexibility is a neutral and politically acceptable
term to denote the possibility of some member
states integrating more closely than others as the
EU enlarges and becomes more diverse politically
and economically. The report of the reflection
group, established by the member states to prepare
the ground for the 1996-1997 intergovernmental
conference (IGC) retained the term "flexibility" in
order to keep Britain within the discussion. The
Irish presidency's proposal for arevision of the
Treaty on European Union, released in December
1996, contained a section on flexibility, which it
termed "enhanced cooperation." This made its
way into the Amsterdam Treaty, which called for
closer co operation to allow groups of member
states to move forward in limited areas without
waiting for all the others, provided that a qualified
majority agreed. In some respects, this is merely a
recognition of prevailing practices, with opt ins
and opt outs in a number of policy areas. Moreover, the flexibility chapter is hedged with conditions and constraints as to its possible use. But the
codification of flexibility, and the institutionalization of differentiated integration, sends a striking
signal in an increasingly large and diverse EU:
where necessary, some member states will proceed faster than others to achieve internal and external policy objectives. At the same time, it raises
serious problems about decisionmaking procedures, the acquis communautaire, and EU representation in international organizations.
See also AMsTERDAM TREATY; DIFFERENTIATED INTEGRATION.

Fontalnebleau Summit
The Fontainebleau summit, held in June 1984 in
the old royal palace outside Paris, was one of the
most important in the EU's history. For the previous five years the EC had been bogged down in a
debilitating and aggravating dispute over Britain's
budgetary contribution. At issue was Prime Minister Margaret Thatcher's legitimate claim that
Britain paid too much into the Community and received too little directly in return. Few doubted
that Thatcher had a valid point, but her aggressive
style infuriated her EC counterparts and helped
prevent aresolution of the problem (a series of
summits in 1983 and early 1984 had ended in
deadlock). President Fran~ois Mitterrand, who
presided over the Fontainebleau summit, did his

Framework Program for Research and Technological Development

utmost in the preceding weeks to broker a settlement. After much hard bargaining at the summit
itself, Thatcher won a rebate in the amount of 66
percent of Britain's annual net contribution, and as
part of an overall budgetary agreement member
states decided to curtail spending on the Common
Agricultural Policy (CAP) and increase the EC's
revenue. Thus, the Fontainebleau summit finally
ended the British budgetary dispute, beg an the
badly needed process of CAP and budgetary reform, and allowed the European Council to concentrate in future on the EC's strategic direction.
Also at the summit, the leaders decided to establish an ad hoc committee on institutional affairs to
consider the EC's response to internal and external challenges. Known by the name of its chairman, the so-called Dooge Committee helped lay
the foundation for the Single European Act and
the EC's revival in the late 1980s.
See also DOOGE COMMITTEE; SINGLE EUROPEAN ACT.

Forestry
The EU does not have a common forestry policy,
but forestry issues come under the rubric of the
Common Agricultural Policy and structural policy.
See also COMMON AGRICULTIJRAL PoucY.

Fortress Europe
The expression Fortress Europe gained currency
in the United States during the single market program in the late 1980s. Fearful that the EC was becoming more protectionist and that the Commission was unresponsive to its trading partners'
concerns, some U.S. businesspeople and commentators complained that the single market program
would turn Europe into an economic fortress. The
Commission dismissed such claims, which were
undoubtedly exaggerated, but nevertheless took
pains to explain the program abroad and became
more responsive to international concerns.
See also SINGLE MARKET PROGRAM.

237

mental organization to coordinate foreign and defense policy. Aseries of bilateral meetings between France and its EC partners in the summer
and fall of 1960 paved the way for a summit meeting in Paris, on February 10 and 11, 1961, which
resulted in a decision to continue intergovernmental discussions under the chairmanship of Christian Fouchet, the French ambassador in Denmark.
At a summit in Bonn on July 18, 1961, EC
leaders asked Fouchet to draft "proposals on the
means of giving the union of their peoples a statutory character"; before the end of the year Fouchet
submitted a design for a confederation of European states. With the goal of a common foreign
and defense policy, as weIl as cooperation on cultural, educational, and scientific matters, the
Fouchet Plan outlined an institutional framework
that included aministerial council, a commission
of senior foreign ministry officials, and a consultative assembly of delegated national parliamentarians.
Apart from German chancellor Konrad Adenauer, however, leaders of the other member states
were unenthusiastic about the Fouchet Plan. In
particular Josef Luns, the Dutch foreign minister
and a future secretary-general of NATO, questioned de Gaulle's motivation and purpose. Resentment of an apparent Franco-German fait accompli fueled Luns's concern about the future of
the EC, the likely U.S. reaction, and Britain's possible role. Luns's intransigence augured ill for the
Fouchet Plan, which collapsed after aseries of acrimonious meetings in early 1962.
See also DE GAULLE, CHARLES.

Four Freedoms
The four freedoms are the free movement of
goods, services, capital, and labor across national
frontiers. These were the objectives of the single
market program.
See also SINGLE MARKET PROGRAM.

Fouchet Plan

Framework Program tor

Research and Technologlcal
Development

The failed Fouchet Plan (1961-1962) was the

means by which French president Charles de
Gaulle sought to bring about a "Union of States"
in Europe. De Gaulle's idea was to involve the six
member states of the EC in a new intergovem-

Framework programs are the main instrument of

EU research and technological development policy. Under the terms of the Treaty on European
Union, the European Parliament and the Council
of Ministers use the co-decision procedure to

238

France

adopt framework programs, which set out the

EU's activities in the field of research and technological development. The pro grams are implemented by means of specific pro grams in each
area of activity (such as telecommunications, environmental protection, infonnatics). Because of
their scope and complexity, a number of Commission directorates-general are involved in planning
and executing the framework programs. On April
26, 1994, the Council and the Parliament adopted
the fourth framework pro gram for research and
technologieal development and demonstration
(1994-1998). In November 1996 and February
1997 the Commission presented preparatory documents on the fifth framework program and presented a fonnal proposal for adoption of the program in March 1997, with the aim of having the
program operational at the beginning of 1999.
See also RESEARCH AND TECHNOLOGICAL DEVELOPMENT POLICY.

France
The EC was a Freneh invention: Robert Sehuman
proposed it, and Jean Monnet designed it. Most of
the leading individuals in the subsequent history of
European integration were Freneh: Charles de
Gaulle, Franr;:ois Mitterrand, and Jaeques Delors.
Yet the widely different perspectives personified by
these individuals (de Gaulle was an ardent intergovernmentalist and Delors a fervent Eurofederalist)
epitomized deep divisions in Franee about the development of the EC/EU, despite near unanimity
that some degree of European integration was essential for French economic and politieal security.
French self-interest in European integration
sterns from two historieal, strategie, and economic
facts of life: first, Gennany; seeond, dedining
competitiveness. Franco-Gennan rivalry over disputed frontier regions and, more broadly, for influence and hegemony in eontinental Europe led to
three increasingly eostly and devastating wars between 1870 and 1940. By the end ofWorld War 11
it was c1early in Franee's interest to end FrancoGennan rivalry and break the eyde of violenee
and war. At the same time, Franee was eeonomieally weak relative not only to Gennany but also
to other Great Powers in Europe and abroad. The
conc1usion was simple: France had to modernize
eeonomieally.
A joint solution to Franee's related eeonomic
and strategie problems seemed sensible. But what

approach should France take? France's initial

postwar response (fonnulated and implemented
by both de Gaulle and Monnet) was to modernize
at the expense of Gennan economic weakness, espeeially in the strategically vital coal and steel
sector. But far from reeonciling France and Germany, sueh a poliey was bound to foster Gennan
resentment and revanehism. Although Gennany
had few sympathizers in the immediate postwar
years, France's Western allies urged a less severe
and short-sighted approach, especially in the context of the worsening Cold War. Under strong U.S.
diplomatie pressure, France changed tack in the
early 1950s and embraeed European integration.
Strategically, the launeh of the EC represented a novel initiative to tie France and Germany so dosely together that war between them
would beeome impossible and unthinkable; economically, it represented an unprecedented Freneh
acceptanee of market integration and limited eompetition. Neither of these was embraeed easily, uncritically, or enthusiastically in France. Freneh negotiators who helped draft the Rome treaty faced
eonsiderable opposition in the Freneh government
and eivil service, where Gennanophobia and protectionism still ran deep. Ironieally, it was de
Gaulle, who returned to power in 1958 and erafted
the Fifth Republie, who dispensed the tough medieine (domestie fiscal and monetary refonns) that
made it possible for Franee-and therefore the
other member states-to reduce tariffs and eventually implement the eustoms union ahead of
schedule. Similarly, it was de Gaulle who put
Franco-Gennan relations on asolid foundation in
1963 by conc1uding the Elysee treaty with Chancellor Konrad Adenauer.
Apart from the prospect of meeting long-tenn
economie and strategie objectives, the EC offered
Franee a more immediate advantage, which de
Gaulle quiekly drove horne. This was the Common Agrieultural Poliey (CAP), written into the
Treaty of Rome at French insistenee, and fIeshed
out in marathon negotiations in the early 1960s. In
effeet, the CAP subsidized French farmers-the
most numerous and least efficient in Western Europe-at the EC's expense. Not surprisingly, the
CAP was widely seen throughout the EC as a generous side-payment to France in return for the customs union, which was more benefieial in the
short tenn to Gennany and the Benelux.
Although de Gaulle was indispensable in getting the EC up and running, he is best known for

France

his implacable opposition to supranationalism. De

Gaulle had no objection to the EC's going in a politieal direction, as long as it was intergovernmental and helped to distance Western Europe from
the United States, hence his Fouehet Plan (1962)
for a political and seeurity eommunity based on
the EC and his rejeetion of Britain's membership
application. He opposed Britain's membership not
because of lingering wartime resentment or latent
Anglophobia but because he knew that Britain
would never participate in a political eommunity
independent of the United States.
The other member states' rejection of the
Fouchet Plan, in part because of its perceived antiAmericanism and its exclusion of the UK, strengthened de Gaulle's determination to thwart the Commission's ambition and derail supranationalism.
The inevitable showdown came in June 1965, ostensibly over proposals to enhanee the Commission's and the European Parliament's powers as
part of a package to fund the CAP. De Gaulle called
the Commission's bluff and pulled France's representatives out of the Council and the Committee of
Permanent Representatives (COREPER), thereby
preeipitating the "empty ehair crisis." But de
Gaulle's real target was the treaty's provisions for
qualified majority voting (QMV) in the Couneil,
due to come into effect in January 1966. The erisis
ended later that month with the Luxembourg Compromise, whieh upheld the principle of QMV but
condoned the practice of decisionmaking by unanimity.
It is easy to aceept de Gaulle's extremism as
representative of Freneh opinion; after all,
Gaullism and Gallieism seemed synonymous. But
the reason why de Gaulle ended the 1965-1966
standoff is instruetive: he reeeived the unmistakable message in the Deeember 1965 presidential
election that a sizable pereentage of the eleetorate
disapproved of his EC poliey. The bearer of that
message was none other than Franyois Mitterrand,
who ran de GauBe a elose seeond in 1965 and
eventually beeame president of France in 1981.
Mitterrand's presidency (at least foBowing
his famous U-turn in 1983 on economic poliey)
represents the other end of the spectrum of French
opinion toward European integration. Not only did
Mitterrand announce his new-found commitment
to European integration in a speech to the European Parliament (EP), but his advocacy of the single market program inevitably resulted, in the Single European Act (SEA) and its aftermath, in a

239

repudiation of the Luxembourg Compromise (although for obvious reasons Mitterrand was unwilling to admit as much when asked to do so during the tense Treaty on European Union [TEU]
referendum campaign in September 1992).
If de Gaulle and Mitterrand represent the two
poles of French presidential (and mainstream political) opinion on European integration, then
Georges Pompidou, Valery Giseard d'Estaing, and
Jaeques Chirac-the other presidents of the Fifth
Republic-must lie somewhere in between. Indeed, Pompidou is elose to the de Gaulle end; Giscard is in the middle; and Chirac-a nominal
Gaullist-is elose to the Mitterrand end. Although
the range of opinion between de Gaulle and Mitterrand is broad, French presidential and mainstream politieal preferences nevertheless have a
lot in common: distrust of the Commission
(notwithstanding Delors's ten-year aseendancy
and the fact that the Commission is modeled on
the French bureaucracy), dislike of the EP (despite
strenuous French efforts to keep it in Strasbourg),
support for the Council of Ministers (the institutionalization of national interest in the EU), and
affection for the European Council (a Giscardian
invention). Thus, French proposals to the intergovernmental eonferenees (lGCs) on treaty reform in 1985, 1991, and 1996-1997 strike a familiar chord: a minimal extension of EP authority,
greater use of the European Council, and the least
possible recourse to QMV with respect to new EU
eompetences.
The EU is sometimes earicatured as a vehiele
for the promotion of French policy in Europe and
the wider world. Indeed, the French are refreshingly honest in their se1f-interest in European integration, espeeially with regard to eultural, eommereial, industrial, and foreign poliey. Culturally,
French efforts to promote and protect the French
language-for instanee, by trying to limit imports
into the EU of "foreign" (i.e., U.S.) films and television programs-have had only limited success.
In industrial policy the French-never keen on the
free market-have attempted to substitute "Eurochampions" (large, EU-supported firms, notably
in the high-technology sector, eapable of competing globally) for "national champions," which are
illegal under EC law. Similarly, in commercial
policy, the French have sought to replace national
protectionism with Europrotectionism, as recent
rows over agricultural export subsidies and the
Uruguay Round of the GATI elearly illustrate.

240

France, Germany, and Post-Cold War Europe

In foreign policy, the French have tried to

shape European Political Cooperation and its successor, the Common Foreign and Security Policy
(CFSP), into EU instruments for the projection of
French influence globally. Here the French have a
distinct advantage, being the only big member
state seriously committed to the CFSP (Britain is
equivocal about the EU in general, Germany still
shies away from the foreign policy spotlight, and
Italy is preoccupied with domestic problems). The
way in which the Balladur Plan, a French initiative
to strengthen stability in Central and Eastern Europe, became the CFSP's first joint action shows
how successful the French are at Europeanizing
their foreign policy. At the same time, France has
not abandoned unilateralism in international affairs, as occasional forays into Francophone
Africa and events in Bosnia demonstrate.
Apart from using the EU to achieve French
objectives and project French power, France also
uses the EU to prevent German domination in Europe, notably in economic and monetary policy.
Thus, Economic and Monetary Union (EMU) is
largely a French initiative to end the German central bank's de facto monopoly of European monetary policy by establishing a European Central
Bank in which France would at least have a say.
This was the motivation behind French prime
minister Edouard Balladur's call in 1987 for
EMU, which started the process that led to the
IGe on EMU in 1991 and culminated in the TEU
the following year. German unification strengthened the French case for EMU, made Chancellor
Kohl even more sensitive to French concerns
about Germany's potential preponderance in Europe, and gave Kohl-who favored EMU in any
case-the political impetus to overcome the central bank's recalcitrance on the issue.
EMU may make sense economically (in terms
ofthe EU's declining competitiveness) and strategically (in terms of Franco-German and Euro-German relations), but it is exacting a huge cost in
terms of public acquiescence in European integration. Nowhere is this more obvious than in France,
where high unemployment is popularly seen as a
consequence of meeting the criteria to participate in
the single currency. The TEU referendum in September 1992 revealed surprisingly deep resentrnent
in France of deeper European integration, which
rogue politicians eagerly exploited. The drive for
EMU exacerbated the resentrnent and contributed
to the defeat of the conservative government in

May 1997. The deep political ambivalence inherent

in EMU was clearly evident at the Amsterdam SUffimit in June 1997, when Lionel Jospin, France's
new socialist prime minister, insisted on a review of
the EMU stability pact and the adoption by the European Council of a separate resolution on growth
and employment.
At the same time, the end of the Cold War
raised questions about the durability of the
Franco-German alliance, and even of the EU itself, in a radically transformed international environment. Yet, for all the public soul-searching in
France over the EU and despite strong opposition
to EMU, France has no choice but to stay the
course. For France, history, geography, demographics, and economics all point in the same direction: toward a doser Franco-German relationship and deeper European integration. The future
EU might bear only a slight resemblance to today's EU and might be centered on a core group
of member states with common macroeconomic,
monetary, fiscal, foreign, and even defense policies. If so, it is inconceivable that France and Germany together would not be at the center of it.

See also DE GAULLE,

CHARLES; F'RANCE, GER-

MANY, AND POST-COLD WAR EUROPE; MITTERRAND,

F'RANC;:OIS; TABLE

10; APPENDIX 2; APPENDIX 3.

Bibliography
Dreyfus, Francois-George, Jacques Moritez, and Max
Peyrard. 1993. France and EC Membership Evaluated. London: Pinter.

Flynn, Gregory. 1995. Remaking the Hexagon: The New

France in the New Europe. Boulder: Westview.
Kramer, Stephen Philip. 1994. The French Role in the
New Europe. Westport, CT: Praeger.

-Desmond Dinan

France, Germany, and

Post-Cold War Europe
The years 1995 and 1996 were ones of crucial political transition in France. The fourteen-year presidency of Fran~ois Mitterrand ended with the tworound presidential elections of April-May 1995.
Former president Mitterrand died on January 8,
1996, after a long and largely secret struggle
against prostate cancer. Jacques Chirac took office
on May 17, charged with three main tasks: to reduce unemployment while juggling fiscal and
monetary policy so as to meet the convergence criteria for Economic and Monetary Union (EMU);

France, Germany, and Post-Cold War Europe

to prepare France's government and public opinion for the 1996-1997 intergovernmental conference (IGC); and to launch the largest French defense reform since President Charles de Gaulle's
in 1958 (Tiersky, 1996).
The new French military would be changed
in two ways. The first had to do with overall strategy and contingency planning. In a stunning reversal of traditional French policy, Chirac decided
to end conscription and introduce an all-volunteer
"professional" army. In place of the Cold War
French army, configured to join with NATO allies
to meet a land invasion from the east, France's
post-Cold War army will have as its nucleus a
lean, fifty- to sixty-thousand troop rapid reaction
force, such as Britain already has and Germany is
also in the process of creating.
This British-French-German symmetry indicates how European defense planners have conceived post-Cold War threats and missions and
what the separate and combined European militaries will look like. Rather than standing armies
designed to meet a huge conventional invasion
from the east, they will be rapid reaction forces,
capable of transporting both heavy and light-armed
divisions over long distances. They will also be
"double hatted" in the sense of fitting either pure
NATO missions or else NATO-Western European
Union (WEU) missions. The latter would be missions in which the Europeans in the WEU make
use of NATO "separable but not separate" logistical and intelligence equipment, which only the
United States provides in NATO, for missions in
which U.S. military forces do not participate. This
military force structure-in effect a European defense and security pillar within rather than outside
NATO, whose missions require NATO Council decisions (i.e., U.S. political approval, too)-is what
will back up the EU's goal of a Common Foreign
and Security Policy (CFSP), according to the
NATO council communique of June 3,1996.
The second broad aspect of Chirac's defense
reforms was to change French military forces and
capabilities themselves. This means a radical downsizing of the French army from 400,000 to about
250,000 (excluding the domestically deployed
paramilitary gendarmerie), elimination of the once
politically sacred Albion Plateau land component
of the force de jrappe's triad, and a smaller navy.
Among other things, Chirac's defense reforms represent a radical French adaptation to a
post-Cold War Europe in which, absent the Soviet

241

threat and the Soviet Union itself, keeping a

geostrategically reluctant and semi-isolationist
United States "in" has become a central priority
for the Europeans, not least for the French themselves. From this priority arises the much-touted
French return to some of the NATO command institutions, notably the rejoining of the Military
Committee. Announced in fall 1995 and begun on
June 13, 1996, when the French defense minister
ended a thirty-year French absence from the Military Committee's meetings, the Chirac policy is
cutting the old Gaullist Gordian knot. A complete
French return to a suitably reformed integrated
command structure can no longer be excluded and
may, in fact, be Chirac's intention.
Can this really be? Ras Gaullism been so easily overturned in Paris? The answer is not so complex, given a realistic rather than a political cultural, stereotypical understanding of French
policy. Certainly, after decades of French resistance to "American hegemony" inside NATO,
Chirac's declaration to a joint session of Congress
during his 1996 state visit to Washington that a
U.S. leadership role is "necessary" even for
post-Cold War European security might seem to
be heresy. But Gaullism (and all the other bases of
French policy today) needs to be understood not
as psychological compensation for old psychological wounds but as national interest-as a mix of a
few intransigent principles and sometimes spectacular, annoying attitudes with a fundamental
pragmatic realism about the basics (e.g., de
Gaulle's own switch on French Algeria and his
immediate support of the United States in the
Cuban missile crisis).
Absent the Soviet threat and the Cold War superpower bloc structure, the old French geostrategic policy, including policy toward NATO, had
simply lost its reason for being. Remaining outside the NATO command had lost its politicaldiplomatic leverage between the two superpowers
and the two blocs. Moreover, Europe's abject failure to act decisively to end the war in Bosnia was
a lesson taken to heart.
Of course the French are glad that Europe is
"beyond Yalta," even if France has paid a substantial price in political-diplomatic leverage. Pure
neorealists and cynics, seeing a loss of French
power in the end of the Cold War, wrongly suggest
that France might really prefer areturn to the Cold
War even at the price of Eastern Europe's suffering. But this judgment illustrates the inadequacy

242

France, Germany, and Post-Cold War Europe

of the "billiard ball" conception of international

relations: Westphalian states defined by sovereignty struggling only for power and place. What
is inside the billiard balls-different kinds of
regimes, economies, cultures, and moralitiesmatters a great deal.
French policy faces two dilemmas in the still
emerging post-Cold War European landscape.
First, what should a Europe beyond Yalta mean for
France economically, diplomatically, and in security tenns; that is, which possible Europe should
the French prefer? Second, what should French
policy be toward its two main partners, unified
Gennany and the United States, given the danger
of France's being overwhelmed and given the historical French tendency toward domestic weakness and division?
In the fonnerly divided Europe, built on a divided Gennany, France had pennanent leverage
on the Federal Republic of Gennany and, to a limited extent, on U.S. policy as well. In post-Cold
War Europe, French policy, whether run by Mitterrand or Chirac, pursues one overriding goal, albeit with a concrete and a hypothetical element.
The concrete element is to keep the consequences
of Gennan unification within acceptable limits,
which means keeping unified Gennany firrnly in
the EU and in NATO. This also means enlisting
the United States as a silent partner to keep the
Franco-Gennan "couple" balanced. The hypothetical element involves preparing the EU, and
changing what is necessary to change, for the possibility of a renationalized, aggressive Russia.
The French believe that unified Gennany will
be strong and should be strong. They also believe,
or hope, that Gennany need not be hegemonic. After all, except at the moment of Gennan unification when, with remarkable backing by the U.S.
administration, a Gennan national policy was imposed on a reluctant France and others, Gennany's
leaders have continued the Gennans' post-World
War 11 strategy of voluntary international self-restraint. Even the coming successor leadership generation, with no personal memory of the war's
horrors, willlikely still see partnership rather than
mercantilism andlor direct domination as being in
Gennany's interest.
For the French, as President Chirac showed
in numerous ways during his first year in office,
this means that a continued superpreferential
Franco-Gennan partnership--the French/Gennan
"core" of European integration-must be France's

policy, even though Gennany's specific interests

and its semihegemony in the east of Europe will
necessarily be a constant issue and strain. There
will no doubt be other issues as well.
Close, prolonged working together among
various levels of Franco-Gennan policymakers,
debating and instigating projects, getting them approved by the Council of Ministers and by other
EU institutions, must therefore remain the primary
French modus operandi in the European process.
Despite the serious, to-be-expected issues of the
1989-1992 period (Mitterrand's doubts about German unification and the controversial dip10matic
recognition, pushed through by Gennany, of Croatia and Slovenia), the fact is that the Franco-German partnership has stayed remarkab1y coherent
and resilient. Gennany's worries in 1996 about
Chirac's military refonns (that French abandonment of conscription could spill over into Gennan
public opinion and that French budget cutting and
reconfiguration will squeeze France's share of the
burden in joint military and intelligence projects)
will surely strain ties once again. But the problems
of any given moment should not be confused with
the fundamentals, meaning the basic national interest of both countries to continue their partnership
and centrality in the European integration process.
For its part, Gennany faces serious domestic
problems (unprecedented unemployment, social
security overextension, and some declining market shares abroad) that threaten its capacity to lead
and to be the EU's paymaster. Additional worries
inelude the capacity to finance Eastern European
economic development, a burden insufficiently
shared by the EU and by France in particular. Finally, Gennany has to be more concerned than
other EU countries about the possibility of an aggressive nationalist regime in Russia.
The conelusion is that unified Gennany, now
pennanently prone to overextension abroad and to
overcommitrnent at horne, has excellent reason to
try not to take France for granted in the EU and
CFSP-NATO-WEU contexts. France and Gennany,
Gennany and France need each other; a elose relationship is in the national interest of both countries.
France, moreover, has certain advantages,
first among them the knowledge that Gennan politicalleaders and business elites themselves know
history's lesson: that Gennany will ultimately
come to grief in any Sonderweg; that the worst position for the Germans is to find themselves
"alone," which calls up the possibility of some

France, Germany, and Post-Cold War Europe

new "nightmare of coalitions." In addition, France

is Gerrnany's only possible partner at the center of
European integration. By geography, size, economy, and political and cultural strength, France
(even if it is notably inferior to certain Gerrnan
strengths) can act as a counterweight, whereas
Britain or Italy, let alone Spain, cannot. For this
reason, President Mitterrand was not much interested in British prime minister Thatcher's offers,
described at length in her memoirs, of a special
Franco-British relationship to balance Gerrnany
(Thatcher, 1993).
For three decades the Franco-Gerrnan tandem
has produced substantial practical results for Germany as weIl as for France. Most of Gerrnany's
trade goes west (particularly to France), not east.
What would be Gerrnany's advantage in changing
the basic framework? Finally, there are the somewhat less tangible but not necessarily less important factors, such as public opinion. Strikingly,
French and Gerrnan young people for years have
regularly been telling opinion poIl sters that each is
the other's "best friend" in Europe. However
vague and mentally ahistorical this friendship
might actually be, it is, in itself, a remarkable
(even historic) political fact.
The French motivation to continue European
integration seems therefore very strong, if not entirely irreversible. Given this, any politician hoping to be president, even a neo-Gaullist like
Chirac, cannot frankly be "against Europe." At
most a nationalist-inclined candidate who really
hopes to win can, while campaigning, talk more or
less directly about the price of European integration. Once in power, however, any French leader
must sit down, with an appetite, at the European
table-although joining the table does not mean
that everyone orders the same thing, or agrees on
who will pay the bill.
French voting patterns reinforce this Europeanism. The anti-Europe-more precisely, the
anti-Treaty on European Union (TEU)-groups
are found toward the ends of both the right and left
wings. This means nationalist and/or social or
populist Gaullists on the right and the communists
on the left. The polarized, outlying location of
anti-TEU sentiment is important, showing that in
France the pro- and anti-Europe cleavage runs not
between right and left but (as in Britain) inside the
conservative camp, with the French communists
being largely a historical avatar of protest voting.
And French communist anti-TEU voters will usu-

243

ally vote for a European-oriented socialist on the

second presidential ballot, nullifying their antiEurope strength, whereas on the right, nationalist
or populist conservative voters will often abstain
rather than vote for a clearly pro-European conservative. This was one reason why Giscard d'Estaing in the 1970s could not count on his neoGaullist Rally for the Republic (RPR) coalition
partner, whose leader was none other than Jacques
Chirac. According to Giscard, RPR treachery was
the main reason why he was defeated by Mitterrand in his 1981 reelection bid.
Chirac's 1995 presidential strategy illustrated
this further. His electoral rhetoric throughout the
1994-1995 prepresidential speculation was ambivalent, both anti- and pro-TEU (e.g., his wavering on the single currency). The point was to woo
both pro-TEU conservative voters (the UDF, centrists, and RPR voters, about one-third of whom
are favorable to "Europe") and anti-TEU supporters of the RPR (Philippe Seguin and Charles
Pasqua were the leading figures here) and other
extreme right voters.
But only months after his victory in May
1995, Jacques Chirac moved clearly away from an
anti-TEU approach. He lost interest in combating
la pensee unique, the conformist idea that there is
only one sensible French policy, that of high interest rates for a strong franc eombined with signifieant govemment budget eutting to meet the EMU
eonvergence eriteria. The alternative poliey, the
so-called other poliey (Seguin's advocacy of lower
interest rates to reduce unemployment by getting
higher growth rates, at the understood priee of a
higher inflation rate) was put on a baek burner.
Chirae instead came out decisively in favor of fun
steam ahead to meet the convergence eriteria,
whieh meant reaffirrning the first priority of
Franco-Gerrnan eooperation and of European integration as opposed to a national-based attack on
unemployment as the most urgent French problem. The only surprising thing was that anti-TEU
RPR leaders and voters raised so little resistanee.
Even though the 1992 referendum on the
TEU was won by a narrow margin and weekly
opinion polIs show Freneh sentiment leaning
against "Europe," or some specifie aspect of it, an
underlying majority in favor of European integration and of Franco-Gerrnan partnership has become a new idee rec;ue in Freneh political culture.
Therefore, the kind of radical in-or-out choiee that
Mitterrand faeed in March 1983, when he opted

244

France, Germany, and Post-Cold War Europe

squarely for the EC, may not arise again. The EU

framework may slowly unravel or expire from disinterest, but it is unlikely either to explode or to
implode, regardless of the change of government
in France.
The question of what, how, and who pays
with respect to enlargement and institutional reform are a large menu of various national interests
and policies. The French government set three priorities for the 1996--1997 IGC: enacting decisionmaking reforms, which in tomorrow's even-Iarger
EU will mean a variable geometry or concentric
circle model of mixed methods; lessening the democratic deficit, particularly by making the Commission more accountable to the European Parliament (EP) and especially to the Council, which,
for the French at least (though not in the same way
for the Germans) remains the central EU institution; and moving forward sharply on the CFSP,
into which the Chirac military reforms, described
earlier, must obviously fit.
As under all presidents of the Fifth Republic
(Fran~ois Mitterrand not least), French policy sees
the European Council as the most effective and, in
its way, the most democratic institution, given that
the heads of government and/or state are elected
nationally and, in the French case, directly. Arguably this gives the European Council more
democratic legitimacy (although the French do not
entirely believe it themselves) than the EP, which
the Germans favor. The French prefer the European Council in reality because it is an intergovernmentallconfederal institution in which a national veto can still be used.
Changes in the way the Council of Ministers
operates-for example, longer presidencies and
combined presidencies for smaller countrieswere a few of the French proposals at the IGC.
The Germans, by contrast, wanted a more powerful and democratic EP, not instead of a reformed
Council but as weil as it. The French are wary of
the EP for two reasons: first, they think it too unrepresentative and fragmented to function even
approximately like anational parliament; second,
a stronger EP would provoke demands at horne for
a constitutionally stronger French parliament as
weIl. The French expect that enlargement will lead
to an EU running at various speeds or levels of
participation, as in fact it already does. Diversified
decisionmaking methods will be necessary, and a
central group of countries, built around the
Franco-German core, is both likely and desirable.

Feelings of guilt over EU inertia regarding

the disaster in Bosnia have given Chirac room to
move strongly on the CFSP front. Chirac's defense reforms, his "historic" return to NATO's
unified command institutions, and his welcome of
continued U.S. alliance all relate to this. Europe,
and the world as a whole, Chirac said, "needs the
United States .... [U.S.] political commitment to
Europe, and military presence on European soil,
remain an essential factor in the stability and security of the continent" (quoted in The Economist,
February 10, 1996, p. 45). France's new attitude
made possible the NATO communique of June 3,
1996, which finally clarified that after years of
wrangling the post-Cold War European pillar
would not be independent of NATO.
The CFSP as diplomacy, say the French, has
been hardly visible thus far. Its decisions and recommendations have had little actual implementation,
and there is little consistency between Council decisions, on the one hand, and Commission and member-state actions and declarations, on the other. Key
examples are the EU's failure to follow through on
the 1993 European Stability Pact (the Balladur Plan)
for Central and Eastern Europe and the catastrophe
ofEU-UN peacekeeping attempts in Bosnia.
France's priority for CFSP reform is to reinforce the Council's centrality in deciding joint actions and in committing member states. Only the
intergovernmental Council expresses any genuine
common will, and national sovereignty can increasingly be converted into "pooled sovereignty"
through qualified majority voting (although this
would probably also mean increasing the big
countries' weighted votes, which the small member states refused to accept at the June 1997 Amsterdam summit). Consensus could remain the basis of decisionmaking, with qualified majority
voting being used to implement those decisions.
The French also proposed that the Council appoint
a CFSP High Representative (HR) as the EU's foreign policy voice and face. Indeed, it was agreed
in the Amsterdam Treaty that the Council secretary-general would act as the High Representative
and that a new planning and analysis unit would
be established in the Council secretariat. There is
reason to suppose the French believe that the first
HR, at least, ought to be French.
See also COMMON FOREIGN AND SECURITY
POLICY; FRANCE; GERMANY; NORTH ATLANTIC
TREATY
UNION.

ORGANIZATION;

WESTERN

EUROPEAN

Functionalism

Bibliography

Thatcher, Margaret. 1993. The Downing Street Years.

New York: HarperCollins.
Tiersky, Ronald. 1996. "A L:::aly Story: Chirac, FranceNATO, European Secu,lty, and American Hegemony." French Politics and Society 14, no. 2
(Spring), pp. 1-8.

-Ronald TIersky

Fraud
The EU wages a constant battle against fraud. Lax
oversight, especially by national agencies charged
with carrying out EU policies (member states administer approximately 80 percent of EU expenditure), exposes the EU to widespread cheating.
Much of this is with regard to the biggest category
of spending, on agricultural price supports. The issue has become more pressing in recent years for
both financial and political reasons: financially, the
cost of fraud is rising (the Commission estimated
that fraud cost about 1.4 percent of the EU's budget in 1995); politically, reports of fraud and mismanagement are fueling the EU's unpopularity and
contributing to the EU's legitimacy crisis.
The Court of Auditors and the European
Parliament (EP) are the defenses at the EU level
against waste, mismanagement, and fraud. Despite its title, however, the Court of Auditors has
no judicial powers or functions; its reports are
essentially consultative in character. Yet recent
reports, highly critical of financial control in the
Commis si on, have triggered extensive debates in
the EP and received considerable publicity in the
national media. Apart from the EP's normal
means of scrutiny--debates, written questions to
the Commission and the Council, interrogation
of commissioners and national ministers in individual parliamentary committees, and holding
public hearings on controversial issues-the
Treaty on European Union gave the EP formal
authority to set up temporary committees of inquiry. Significantly, the first such inquiry was
into fraud.
Clearly, one of the most visible and creditable
ways for the Commission to redeem itself in particular, and the EU in general, is by trying to
stamp out fraud. Under the presidency of Jacques
Santer, the Commis si on has put a far greater emphasis on openness and financial responsibility:
Erkki Liikanen, the budget commissioner, and
Anita Gradin, the commissioner for financial con-

245

trol and fraud prevention (a new portfolio), are

jointly spearheading the reform effort. Both commissioners come from the new Scandinavian
member states, which have areputation for open
government and bureaucratic integrity.
Commission initiatives to fight fraud include
a draft convention on the protection of the EU's
financial interests, proposed under the EU's third
pillar (Cooperation on Justice and Horne Affairs),
and the establishment of aSound Financial Management Group (SFMG) to improve financial administration at the EU level. Chaired by Commissioner Liikanen, the SFMG includes personal
representatives of the finance ministers of the
member states. At its first meeting in March 1996,
the group agreed to urge national governments to
ratify the EU financial interests convention. A related Sound and Efficient Management Initiative
(SEM 2000) also aims to tighten control over the
EU budget.
Significantly, the Amsterdam Treaty included
a provision for "countering fraud affecting the financial interests of the Community." This calls for
close cooperation among the Commission, member states, and competent authorities to protect the
EC's financial interests and gives the Council authority, under the co-decision procedure, "to adopt
the necessary measures in the fields of the prevention of and fight against fraud affecting the financial interests of the Community with a view to affording effective and equivalent protection in the
Member States."
See also BUDGET; COURT OF AUDITORS.

Functlonallsm
Functionalism is a classical theory of regional integration that holds that a common need for technocratic management of economic and social policy
leads to the formation of international agencies.
Such agencies promote economic welfare, thus
eventually gaining legitimacy, overcoming ideological opposition to strong international institutions, and in the long-run evolving into a sort of international government, though perhaps not a true
state. Widely espoused in the 1950s, functionalism
is associated with David Mitrany and Lionel Robbins as weIl as with many international technocrats
of the interwar and immediate postwar period and
is modeled in part on the New Deal and other experiments in government intervention.
See also INTEGRATION THEORY.

G8
SeeG7.

G
G7
Four EU member states (Britain, France, Germany, and Italy) are members of the G7: an exclusive club consisting of the world's most industrialized countries (Canada, Japan, and the United
States are the other members, and Russia is a socalled half-member). The G7 was launched in
1975-at a time of deep recession-to try to coordinate economic policy among leading industrial countries. The EU's small member states resented their exclusion from the club, and their
implicit representation in it by the large member
states, hence their insistence that the president of
the Commission also attend the GTs annual summits. After a political wrangle within the EC
(France, which had launched the G7 initiative,
wanted to keep the Commission out), the Commission president took his place at the G7 summit
in 1977 and has attended ever since. Since the
collapse of the Soviet Union, the Russian president has attended part of the annual summit. In
deference to Russia's demand for equal representation, the group is sometimes described as the
G8 (the June 1997 Denver summit was known as
the Summit of the Eight), although in reality Russia's fragile economic situation precludes the
country's full participation in the group. Apart
from the annual summit meetings of the world's
leading prime ministers and presidents, the G7
also includes separate finance ministers' meetings
and occasional ad hoc meetings (such as a ministerial meeting on the information superhighway,
which the Commission hosted in Brussels in February 1994). For all its glamour and high visibility, however, the G7 has generally been of limited
economic and political importance and has not
achieved its full potential.

G24

In July 1990 the Commission agreed to coordinate

Western economic assistance to the Central and

Eastern European states, which were then emerging from the disintegrating Soviet bloc. The Commission acted on behalf of the group of twentyfour industrialized countries (which corresponded
at the time with the membership of the Organization for Economic Cooperation and Development).
The G24 initiative greatly enhanced the Commission's international profile during a key period of
the EC's development and transformation.

GATT
See

GENERAL AGREEMENT ON TARIFFS AND TRADE.

GCC
See

GULF COOPERATION COUNCIL.

General Affalrs Councll

Although legally and institutionally there is only
one Council of Ministers, in reality the Council
consists of meetings of ministers having responsibility in their member states for the range of policy issues within the EU's competence. Thus,
whenever agricultural ministers, environment
ministers, trade ministers, and so on meet to legislate for the EU, they constitute the Council of
Ministers. Foreign ministers, who form what is
called the General Affairs Council, have a special
role in the EU: they are responsible for foreign
and security policy cooperation and for resolving
issues upon which the specialized councils are unable to agree. Accordingly, the General Affairs
Council is recognized as the most important couneil in the constellation of ministerial meetings in
Brussels.
See also COUNCIL OF MINISTERS.

General Agreement on Tarlffs

and Trade (GATT)
The General Agreement on Tariffs and Trade
(GATT) formally entered into force in January
1948, when it was signed by twenty-three coun-

247

248

General Agreement on Tariffs and Trade (GATT)

tries in Geneva, Switzerland. Originally designed

to serve as an interim arrangement for the more
comprehensive International Trade Organization
(ITO), the GATT by default became the world's
key international trade organization in 1950, when
the U.S. Senate failed to ratify the Havana Charter, and the proposed ITO collapsed. Lacking resources of its own (except for a secretariat in
Geneva), the GATT served primarily as a forum
and institutional expression of a code of principles
enabling member states to negotiate tariffs and
other trade regulations. On January 1, 1995, a successor organization to the GATT, the World Trade
Organization (WTO), was established as a result
of the Uruguay Round of GATT negotiations.
The GATT reflected the prevailing postwar
philosophy of international trade liberalization.
The preamble to the General Agreement identified
the key objective of the GATT as "the substantial
reductions of tariffs and other barriers to trade and
. .. the elimination of discriminatory treatment in
international commerce." The most important rule
(Artic1e 1) was that of nondiscrimination. All
members agreed to adhere to the principle of most
favored nation (MFN), which stipulated that "any
advantage, favor, privilege or immunity granted
by any contracting party to any product originating in or destined for any other country shall be
accorded immediately and unconditionally to the
like product originating in or destined for the territories of allother contracting parties."
At its inception the GATT also endorsed
some significant limitations on free trade in the interest of domestic stability. The United States
pressed successfully for an agricultural regime
that would allow production and price controls,
export subsidies, and protectionism. International
trade in services was not covered by the agreement. The code also allowed for temporary actions to impose quantitative restrictions on imports when they threatened injury to domestic
producers or caused serious balance-of-payments
problems. Notably, the GATT also permitted the
establishment of regional trading arrangements
and customs unions, such as the European Economic Community (EEC), provided they covered
most trade and did not raise trade barriers to outsiders. Subsequently, the MFN principle was also
qualified to enable the granting of trade preferences to developing countries.
As the principal architect and key actor in the
post-World War 11 international economy, the

United States served as the chief sponsor of GATT

liberalization efforts. However, the formation and
progressive expansion of the EC's customs union
provided the motor force of GATT liberalization
efforts. The United States supported Western European economic integration but also sought to
liberalize world trade as a means of minimizing
the trade-diverting potential of a European regional bloc. Between 1947 and 1961, five rounds
of tariff negotiations were conducted, culminating
in the Dillon Round of 1960-1961, when the EEC
presented its common external tariff to the world.
During this time, average tariffs decreased from
over 40 percent to approximately 20 percent. In
the meantime, establishment of the EEC in 1958
had caused the United States to push for a sixth set
of negotiations, resulting in the Kennedy Round.
In that round, launched in 1963 and concluded in
1967, average tariffs were reduced by a further 33
to 39 percent, and an attempt was made to include
agriculture in the GATT regime.
Although the Kennedy Round was hailed as a
success, the increasing salience of nontariff barriers led the United States to press for new negotiations to reduce nontariff barriers to trade. Europe,
initially opposed to further negotiations, was encouraged by the collapse of the Bretton Woods
system and growing protectionist sentiments in
the United States to agree to a seventh GATT
round, the Tokyo Round, in 1974. At the conclusion of that round in 1979, tariffs were reduced by
a further 27 percent to an average of less than 5
percent. Seven nontariff barrier agreements were
signed, encompassing such areas as govemment
procurement, customs valuation, subsidies, standards, and antidumping.
Articles 110-116 of the Rome treaty describe
the EEC's competence in international trade. By
definition, a customs union establishes a common
external tariff as weIl as other trade regulations,
and members of such a union are in principle enjoined from conducting an independent trade policy. Recognizing the advantages of a common policy and negotiating stance, member states granted
the Commission considerable discretionary power
over trade negotiations. At the same time, however, member states also greatly limit the Commission's autonomy: the Council of Ministers establishes the Commission's negotiating mandate,
a committee of national officials (the "113 committee," based on Artic1e 113 of the Rome treaty)
participates in negotiations on an advisory basis,

General Agreement on Tariffs and Trade (GATT)

and the Council may approve the final agreement

by qualified majority (although it usually does so
by unanimity).
The EEC was not formally a "contracting
party" to the GATT, although it was granted de
facto all of the rights and obligations of a full signatory. The Commission once asserted that "it is
in the GATT that the Community has its highest
profile," and the Commission has attempted to use
the GATT to promote its power and profile (Dinan, 1994). Given that trade policymaking is
shared among the Commission and the member
states, inevitably the Commission's behavior in
the GATT has revealed chronic tension between
member states and the Commission.
The intervention of member states at every
step of trade negotiations is clearly visible in basic
divisions that have traditionally emerged between
the more protectionist states, among which France
has been most prominent, and states favoring liberalization, such as Britain. Therefore, trade negotiations have had the character of a two-level game
in which the Commission has had to negotiate simultaneously with the rest of the world and with
member-state governments (Putnam, 1988). The
practical effect of this complex dynamic has been
to place great constraints on the Commission
while at the same time strengthening its hand visa-vis the Uni ted States, particularly in negotiations over agriculture (Devuyst, 1995).
The Uruguay Round, the eighth and final
round of GATT negotiations, began in 1986. The
Council of Ministers approved the final agreement
in December 1993, and the commissioner for external economic relations and the president of the
Council signed the Uruguay Round Final Act in
April 1994 in Marrakech, Morocco. The Umguay
Round resulted in a comprehensive global trade
deal without historical precedent, with great significance for the EU. It also generated intensive
conflict not only between the United States and
the EU but also among the member states themselves and between the Commission and certain
member states.
As with previous rounds of negotiations, the
driving force behind the Uruguay Round was the
United States or, more particularly, U.S. concerns
in the mid-1980s about the consequences for international trade of EC deepening (as a result of
the Single European Act) and widening (as a result of Mediterranean enlargement). U.S. fears of
a Fortress Europe could be allayed by a broadened

249

multilateral accord that would firrnly embed the

single market within a framework of globalliberalization. Such fears were particularly acute at a
time of transatlantic monetary conflicts, the rising
dollar, and the loss of traditional agricultural export markets to Europe.
The Uruguay Round Final Act, comprising
twenty-eight separate agreements, included the
following key provisions: a framework of rules designed to liberalize services, protection of intellectual property, phasing out of bilateral quotas for
textiles and clothing and tariff reductions, a comprehensive agreement in farm trade under which
quotas were replaced with tariffs and export subsidies were cut, tariff reductions designed to reduce
the average tariff to approximate1y 3 percent, reform of mIes on dumping, attempts to prevent voluntary export restraints, streamlining of arbitration
procedures and GATT mIes, and transformation of
the GATT into the WTO.
The proposed liberalization of agriculture
and services provoked intensive conflict between
the United States and the EC. Historically, both of
these politically sensitive sectors have been subject to extensive national regulation and protectionism. As chief sponsor of liberalization, the
Uni ted States anticipated clear benefits from
greater access to world markets based on its perceived comparative advantage. For the EC's member states, however, liberalization involved costs
as well as benefits.
The liberalization of services ultimately
proved less difficult than that of agriculture. The
United States is the world's leading exporter of
commercial services but is followed c10sely by
France, Germany, Italy, and Britain. The sharpest
conflicts arose over the liberalization of audiovisual services. The United States charged that the
EU's Television Without Frontiers directive, under
which member states were obligated to "ensure"
where practicable that broadcasters reserved a majority proportion of their transmission time for European works, discriminated against U.S. television exports. The Commission sought to mediate
between France, which demanded a "cultural exception," and Britain, which favored liberalization. In the end, a compromise was reached under
which the cultural sector was included within the
GATT regime in principle but no specific obligations were made.
Agricultural negotiations proved to be much
more difficult. After World War 11, both Europe

250

Genscher, Hans-Dietrich (1927- )

and the United States pursued highly interventionist strategies in agriculture that dramatically increased output and encouraged farmers to become
increasingly dependent on export markets. The
Common Agricultural Policy (CAP) involved a
costly system of protection, payments to farmers
designed to expand output, and export subsidies.
By the mid-1980s, even as the United States favored liberalization policies that would greatly endanger the CAP, the CAP itself greatly strained
the EC budget.
When the EC resisted a multilateral agreement that would go beyond its already substantial
internal farm reforms, the United States applied
commercial and diplomatic pressure to divide the
member states and provoke further opposition to
the CAP (Libby, 1993; Laursen, 1993). A preagreement reached between the United States and
EC at Blair House, in Washington, D.C., in November 1992 greatly limited CAP support for
farmers and gradually phased out export subsidies. But France rejected the accord and threatened to use its veto in the Council to prevent the
signing of the entire Final Act. As the December
1993 deadline for completion of the Uruguay
Round approached, France requested the formation of a so-called Jumbo Council, consisting of
ministers of foreign affairs, foreign trade, and
agrlculture. Britain publicly repudiated French demands, even as the United States exerted pressure
not to reopen the Blair House accord. A week before the deadline the United States announced its
willingness to make concessions on export subsidies and to engage in annual consultations with
the EC concerning participation in the growth of
the world market. France also obtained a promise
that the EC would compensate French farmers for
"sacrifices" going beyond those anticipated as a
result of the CAP's internal reforms. Eventually
the Council approved the final agreement but by
consensus rather than by qualified majority.
However, although the amendments to the
Blair House preagreement established a sufficient
degree of internal cohesion on agricultural matters,
disputes over the Comrnission's competence in
trade threatened to prevent the newly formed EU
from signing the Uruguay Round Final Acl. Member states claimed that the Final Act was a "mixed
agreement" subject to dual (Comrnission and member-state) competence. In particular, they pointed to
the environment, social policy, and services as trade
policy issues over which the Comrnission could not

claim exclusive authority. For its part, the Comrnission argued on the basis of Article 113 that the
Comrnission was the EU's sole negotiator on trade
issues. In April 1994 the Comrnission requested an
opinion from the Court of Justice concerning the
EU's trade competence. The Court's opinion, issued in November 1994, did not uphold the Commission's position; it decreed that EU trade policy
is subject to the dual competence of the Comrnission and the member states (Devuyst, 1995). The
opinion of the Court confirmed that responsibility
for trade policy will remain divided and that individual member states will continue to play a key
role in the making of EU trade policy.
See also COMMON AORICULTURAL POLlCY;
COMMON COMMERCIAL POLlCY; COMMON MARKET;
EUROPEAN ECONOMIC COMMUNITY; U.S.-EU RELATIONS: TRAnE AND INvESTMENT; WORLD TRADE
OROANIZATION.
Bibliography
Devuyst, Youri. 1995. "The EC and the Conclusion of
the Uruguay Round." In Carolyn Rhodes and Sonia
Maizey, eds., Building a European Polity? Vol. 3 of
The State oi the European Union, Boulder: Lynne
Rienner.
Dinan, Desmond. 1994. Ever Closer Union? An Introduction to the European Community. Boulder: Lynne
Rienner.
Laursen, Finn. 1993. "The EC, the United States, and
the Uruguay Round." In Alan Cafruny and Glenda
Rosenthai, eds., The Maastricht Debates and Beyond. Vol. 2 of The State oi the European Community. Boulder: Lynne Rienner.
Libby, Ronald. 1993. Protecting Markets: U.S. Policy
and the World Grain Trade. Ithaca: Comell University Press.
Putnam, Robert. 1988. "Diplomacy and the Logic of
Two-Level Games." International Organization 42
(Summer).

-Alan W. Cafruny

Genscher, Hans-Dietrich
(1927- )
For twenty-three consecutive years Hans-Dietrich
Genscher served in the German government, including eighteen consecutive years as foreign
minister (1974-1992). Genscherism was a term
used to describe German efforts to balance the
Federal Republic's opening to the East (Ostpolitik) with its comrnitments to the EC and NATO in
the West. In Genscher's case, personal considera-

Germany 251
tions added poignancy to Ostpolitik: Genscher
had been born in what became, after 1949, the
German Democratic Republic.
For all his enthusiasm for Ostpolitik, Genscher never wavered from his commitment to the
EC. He always saw integration as an essential
means of achieving the re1ated goals of German
and Western European prosperity and security and
(ultimately) German and European reunification.
In the early 1980s, Genscher was instrumental in
trying to revive the EC, notably with the so-called
Genscher-Colombo draft European Act (November 1981) and its sequel, the Solemn Dec1aration
on European Union adopted by the heads of state
and government in Stuttgart (lune 1983). At the
end of the decade, dramatic developments in Central and Eastern Europe seemed to vindicate Genscher's optimism. Like Chancellor Kohl, Genscher
seized the opportunity presented by the revolutions
there to advance and quickly achieve the coveted
goal of national unity. Genscher had been the first
Western leader to back Soviet president Mikhail
Gorbachev and was the last to drop him. Genscher
also remained a strong supporter of massive Western aid to the USSR and to its successor states.
Moreover, the intergovernmental conferences of
1991, in which he played a leading role, culminated in the Treaty on European Union, which anchored united Germany firmly in the new EU. By
the time he voluntarily left office in 1992, however,
Genscher's reputation was tamished. Kohl's firm
grip on unification policy and U.S.-EC relations,
and the foreign minister's unseernly rush to recognize Croatia's independence during Yugoslavia's
fragmentation (which some say precipitated war in
Croatia), suggested that Genscher was finally beginning to lose his once magical touch.
See also GENSCHER-COLOMBO PROPOSALS;
GERMANY.

Genscher-Colombo Proposals
On November 19, 1991, Hans-Dietrich Genscher
and Emilio Colombo, the foreign ministers of
Germany and Italy, presented to the European Parliament their govemments' proposals for a European act. The so-called Genscher-Colombo proposals advocated reform of the decisionmaking
process, an end to the increasingly artificial distinction between European Political Cooperation
(EPC) and the EC's external economic relations,
and the extension of EPC into the security and de-

fense domain. The proposals thus sought to shake

the EC out of its political and institution al
malaise, but they met a mixed response from
within the other member states and from Washington, which distrusted the deve10pment of a separate European security and defense identity. The
European Council, meeting in London on November 26 and 27, 1981, asked the foreign ministers to
consider the proposals and report back; the foreign ministers failed to agree on a way forward
and could not concur on the relatively mild foreign and security pollcy proposals. Consequently,
their report to the European Council in Stuttgart
on lune 17-19, 1983, gave rise only to the Solemn
Dec1aration on European Union, a vague, insubstantial assertion ofthe EC's international identity.
See also EUROPEAN POLmCAL COOPERATION.

Germany
It is impossible to think about the EU without

thinking also about Germany. Would there be an

EU without Germany? Is European integration the
definitive solution to the so-called German Question? Or is the EU, as a British government minister once publicly remarked, really "a German
racket"?
Undoubtedly, the German question was one
of the major motivations behind post-World War
11 European integration. By mid-1945 Germany
was utterly defeated and about to be divided between the Soviet-occupied East and the American,
British, and French-occupied West. The onset of
the Cold War added strategic urgency to a pressing
problem: what to do with the Western zones of occupation? Punitive policies like the infamous
Morganthau Plan, which advocated the permanent
pasturalization of Germany, were clearly impracticable. Germany was too big, too central, and too
populous not to be allowed to recover economically.
Having suffered so much more than its Allies
from German aggression, understandably France
was eager to keep postwar Germany down. Indeed,
France's own postwar recovery and economic
modernization were predicated in part on perpetual
German weakness. The French modernization
plan, initiated by Charles de Gaulle (France's provisional postwar leader) and launched by lean
Monnet (a leading civil servant) in 1945, sought to
build up French industry at the expense of Germany's shattered coal and steel sector.

252

Germany

Regardless of French recalcitrance, however,

the United States and Britain gradually adopted a
more accommodating policy toward Germany,
culminating in the establishment of the Federal
Republic in 1949 with limited sovereignty. In the
long term, Allied interests would be served best by
avoiding the mistakes of thirty years before and
ensuring that post-World War 11 Germany did not
harbor bitter resentment of the victorious powers.
In the short term, growing Soviet hostility toward
the West made it imperative for the Allies to reconstitute Germany politically and economically
but in a way that would satisfy French security
concerns and comprehensively tadele the roots of
conflict in Western Europe.
This was the background to the Schuman Plan,
France's response to U.S. pressure for a more flexible and far-reaching policy toward Germany. Adoption of the Schuman Plan was highly contentious in
France but seemed like a godsend to Germany: an
opportunity for international rehabilitation and full
economic recovery. Konrad Adenauer, the new
Germany's new chancellor, certainly saw it as such;
he made European integration one of two international cornerstones for the Federal Republic's development (the other one was NATO membership,
which happened in 1955).
Yet Germany's commitment to European integration was neither easy nor inevitable. Adenauer, a conservative politician, was distrusted by
the Social Democratic Party (SPD), whose large
labor constituency viewed the European Coal and
Steel Community, and later the European Economic Community, as a capitalistic enterprise
("Europe, Inc.") inimicab1e to workers' interests.
Kurt Schumacher, the SPD leader, also opposed
EC membership because of a well-founded concern about the possible impact of European integration on the division of Germany between East
and West. It took Monnet's considerable powers
of persuasion, largely through the recently formed
Action Committee for the United States of Europe, in which labor was weIl represented, to convince the SPD to support ratification of the Treaty
of Rome in the German parliament.
Within a short time of the contentious ratification debate, the SPD dropped its reserve toward
the EC and adopted, with the Christi an Democratic Union (CDU), abipartisan approach toward
European integration. The bipartisanship has
lasted to this day but may be sorely tested by the
third stage of Economic and Monetary Union

(EMU) in 1999. The SPD's about-face was due

partly to new SPD leadership and even more to an
early realization that the EC was not contrary to
workers' interests. In general, German employers
and workers made their peace in the postwar period by adopting a consensual, neocorporatist approach to industrial relations, against a background of extraordinary economic growth in the
1950s and 1960s (the "economic miraele"). By
fostering the recovery and restructuring of heavy
industry and by providing a tariff-free Western
European market for the sale of high-quality,
sought-after German goods, the EC contributed
greatly to Germany's prosperity, a prosperity
shared (albeit unevenly) by all German elasses.
Thereafter Germany's role in the EC settled
into a predictable pattern. In Chancellor Willy
Brandt's words, Germany became an economic
giant but remained a political dwarf. Ironically,
Brandt himself rocked the boat politically by embarking upon a vigorous Ostpolitik when he became chancellor in 1969. Brandt's efforts to normalize relations with the USSR, East Germany,
and other Soviet bloc countries alarmed the CDU
opposition and Germany's Western allies. This led
Brandt to anchor Ostpolitik firmly in Westpolitik,
notably by affmning Germany's commitment to
European integration, in which Brandt in any case
strongly believed. Thus Brandt advocated the
EC's first enlargement and supported concomitant
efforts to deepen integration in the early 1970s by
coordinating monetary policy (the unsuccessful
Werner Plan) and foreign policy (through European Political Cooperation).
An unusually elose relationship with France
was another predictable element of Germany's involvement in European integration. The Elysee
treaty, signed in January 1963 by Adenauer and de
Gaulle (who had returned to power in 1958), laid a
solid institutional foundation for Franco-German
cooperation. At the time, Adenauer's CDU colleagues and the SPD opposition fretted that Adenauer was jeopardizing Germany's relationship
with the United States by flirting too much with
de Gaulle. In the event, the treaty became the basis
not of a Franco-German-dominated "European
Europe" but of Franco-German hegemony within
an EC that fitted comfortably into the Cold War
scheme of things.
Because of the stature of de Gaulle and Adenauer and because the Elysee treaty institutionalized regular summit meetings, there is a tendency

Germany 253
to think about Franco-Gennan influence in the EU
almost entirely in tenns of the personal relationship between the leaders of both countries. Indeed,
the president of France and the chancellor of Germany have generally been on good tenns with each
other, none more so than Valery Giscard d'Estaing
and Helmut Schmidt in the 1970s and then
Franc;:ois Mitterrand and Helmut Kohl in the 1980s
and early 1990s. But the relationship has sometimes been uneasy, as it was between Georges
Pompidou, de Gaulle's immediate successor, and
Willy Brandt. Equally important, however, elose
Franco-Gennan relations have been built upon a
dense network of official contacts at all levels of
government and upon the willingness of both sides
to resolve inevitable differences for the sake of
their own country's national interest as weIl as a
shared commitment to a new European order.
One of the most striking differences on European affairs between France and Gennany concerns the EU's institutional architecture. Gennany
is at the supranational end of the spectrum of European integration; France tilts toward intergovernmentalism. In institutional tenns, this difference
translates into Gennan support for a strong European Parliament and for greater use of qualified
majority voting (QMV). Curiously, Gennany is not
a big backer ofthe Commission, and only one German, Walter Hallstein, has been Commission president. Perhaps the lingering aftertaste of Hallstein 's
ambitious presidency, which culminated in a disastrous elash with de Gaulle, chilled Gennany's feelings toward the EU's executive body.
Critics say that Gennany's persistent advocacy of institutional refonn-greater parliamentary power and more QMV-is to be expected
from a country with the largest parliamentary delegation, the largest number of weighted votes, and
the ability to strike bargains and leverage support
in the EU's decisionmaking councils and conciliation committees. A benign interpretation points to
a farniliarity with federalism as a major reason for
Gennany's advocacy of EU institutional refonn
and fear of the nationalist past as another driving
force behind Gennany's espousal of a supranationalist future. Certainly, Chancellor Kohl is genuinely committed to deeper integration as a means
of strengthening Gennan democracy and prosperity, reassuring Gennany's neighbors, and enhancing European stability.
Unification in 1990 presented the greatest
challenge to Gennany's commitment to European

integration and the other member states' commitment to the new Gennany. Gennany passed the
test, with Kohl stearnrollering the Bundesbank's
opposition to EMU and also advocating political
integration in order to lock uni ted Gennany finnly
into a strong, democratic, and ultimately continent-wide EU. But some of Kohl's EC partners
equivocated: British prime minister Margaret
Thatcher used language and imagery redolent of a
bygone era, and Mitterrand worried aloud about
the possible consequences for Europe of Gennan
unity. WeIl before the end ofthe 1991 intergovernmental conferences (IGCs), it was obvious that
Kohl would win only weak EU political and institutional refonns in return for giving up the German mark.
Ironically, in view of his disappointment with
the Treaty on European Union (TEU), Kohl is
unswerving in his support for EMU. Although the
1996-1997 IGC and the ensuing Amsterdam
Treaty merely tinkered with institutional refonn,
Kohl stuck to the TEU's flawed bargain and
pressed ahead with plans to launch a single currency in 1999. Already acelaimed as the chancellor of Gennan unification, doubtless Kohl wants
to be seen also as the chancellor of European unification. But EMU is dividing Europe instead of
unifying it and is devoid of the comprehensive institutional refonns that Kohl originally envisioned
as an essential part of the post-Cold War compact
for a new Europe.
Just as EMU is dividing Europe, it is also engendering a popular backlash in Gennany against
Kohl and the EU. Gennans are profoundly uneasy
about giving up the mark-a symbol of Gennan
democracy and stability (currency refonn in 1948
paved the way for the founding of the Federal Republic in 1949) and a testament to sound econornic management-for an unattractive and potentially weak euro. Whatever may be said about
Kohl, it is highly doubtful that ordinary Gennans
would be more inelined to abandon the mark if the
EU were willing to deepen politically.
For most Gennans, EMU is the latest and
most egregious example of EU intrusion into their
everyday lives and the blurring of the distinction
between domestic and Europolitics. The EC's increasing reach first became apparent in 1986 with
the signing of the Single European Act (SEA),
which posed a particular problem for Gennany,
the EU's only large federal state. The SEA involved an extension of EC competence not only at

254

Giscard d'Estaing, Valery (1926- )

the expense of national governments' authority but

also at the expense of Germany's regional governments' authority. The threatened erosion of Germany's cherished federalism as a result of deeper
integration seemingly continued with the TEU and
led to aseries of amendments to the German constitution in late 1992, ineluding a new elause (Artiele 23) that calls for the federal government to
involve the Bundesrat (the upper house of parliament, representing regional governments) in EU
decisionmaking "in so far as it would have to be
involved in a corresponding internal measure or in
so far as the Lnder [states] would be internally
responsible."
In a landmark ruling in October 1993, which
removed the last obstaele to the entry into force of
the TEU, the German constitutional court protected
German federalism from further Euro-encroachment. Although the judges deelared that the treaty
was compatible with Artiele 38 of the Basic Law,
which stipulates that the members of the Bundestag
(the lower house of parliament) and the Bundesrat
together represent all of the German people, they
nevertheless asserted the ultimate sovereignty in the
putative EU of the democratic parliaments of the
individual member states. Thus the court affirmed
that the EU would not be astate based on a "European people, but that the various peoples of the
member states would exercise the EU's sovereign
rights through their national parliaments."
European integration has had a marked effect
on German politics and economics, just as Germany's role in the EU has had a marked effect on
the integration process. With the imminent launch
of EMU, both Germany and the EU are at a crossroads. Apart from the economic implications of
EMU, the political stakes are extremely high. Will
Germans acquiesce in the replacement of the mark
by the euro? Will the SPD adopt apopulist position and champion either a deferral or an abandonment of the single currency during the 1998 election campaign? Or will EMU work and establish
Kohl as the chancellor of German and European
unification? The answers to these questions will
be decisive for Germany's and for Europe's future.
See also ADENAUER, KONRAD; FRANCE, GERMANY AND POST-COLD WAR EUROPE; KOHL, HELMUT; ApPENDIX

2; APPENDIX 3.

Bibliography
Heurlin, Bertel. 1996. Germany in Europe in the
Nineties. New York: St. Martin's.

Lankowski, Car1, ed. 1993. Germany and the European

Community: Beyond Hegemony and Containment.

NewYork: St. Martin's.

Schweitzer, Carl-Christoph, and Detlev Karsten. 1993.
The Federal Republic of Germany and EC Membership Evaluated. New York: St. Martin's Press.
Tompson, Keneth W. 1996. Europe and Germany: Unity
and Diversity. Lanham, MD: University Press of

America.
Von der Groeben, Hans. 1995. Deutschland und Europa
in einem unruhigen Jahrhundert. Baden-Baden:
Nomos Verlagsgessellschaft.
Zelikow, Philip. 1996. Germany Unified and Europe
Transformed: A Study in StatecraJt. Carnbridge: Haryard University Press.

-Desmond Dinan

Giscard d'Estalng, Valery

(192~

As president of France between 1974 and 1981,

Valery Giscard d'Estaing helped steer the EC
through aperiod of economic stagnation and political malaise that sapped the movement for European integration. Giscard became president of the
Fifth Republic at approximately the same time
that Helmut Schmidt became chancellor of Germany; for the next seven years both leaders were
elose friends and collaborators, virtually running
the EC between them. Going well beyond the
framework of the 1963 Elysee Treaty, Giscard and
Schmidt got together often for dinner, spoke at
least weekly on the telephone, and caucused regularly on the fringes of multilateral meetings.
Giscard's greatest contribution to the EC was
the European Council, which he inaugurated at a
meeting of heads of state and government in Paris
in December 1974. The idea was typically Giscardian: regular meetings of member-state leaders, without an army of advisers, to give the EC
overall direction and resolve outstanding problems. Giscard also organized the annual summit
meetings of the major industrialized countries
(the G7) along the same exelusive lines. With his
knowledge of economics (he had been finance
minister in France for nearly ten years) and grasp
of international affairs, Giscard was in his element in small, elite groups of politicians and
statesmen.
The European Council proved its worth at the
end ofthe 1970s in relation to the Franco-German
initiative for a European Monetary System
(EMS). Regular meetings of the EC's leaders pro-

Gonza/ez, Felipe (7942-)

vided Schmidt and Giscard with an opportunity to

promote their monetary proposal and a forum in
which to approve the EMS at the highest possible
decisionmaking level. The EMS was a elassic example of the Franco-German alliance at work:
without French backing, Schmidt's initial idea for
an EMS would not have succeeded; with French
backing, success was assured. Following a lastminute delay in France caused by concern about
the possible impact of the EMS on the Common
Agricultural Policy (CAP), the EMS began operating on March 13, 1979.
As president of France, Giscard seemingly
grew aloof, remote, and patronizing. Frafi(;:ois
Mitterrand's victory in the presidential election of
1981 brought Giscard crashing back to earth.
Thereafter Giscard returned to the French parliament and also served a term in the European Parliament (EP), where he led the liberal group.
While in the EP Giscard become an advocate of
greater EC competence and supranationalism,
causes he had opposed as president of France.
See also FRANCE.

Gonzalez, Fellpe (1942- )

Felipe GonzlHez, Spain's young and charismatic
prime minister from 1982 until 1996, was an unequivocal advocate of European integration. Under Gonza1ez, Spain shook off the legacy of forty
years of Francoism (backward industry, soaring
unemployment, and rampant inflation) and experienced the highest growth rate of GDP in Europe in
the late 1980s. After taking Spain into the EC in
1986, GonzaIez distinguished hirnself as an ardent
integrationist, wholeheartedly accepting the single
market program and consistently supporting
moves toward economic and political union.
When Gonzalez's Socialist Party (PS OE)
came to power in 1982, accession negotiations between Spain and the EC, which had begun in
1979, were at astandstill. Over the next few years
Gonzalez introduced aseries of measures designed to restructure Spanish industry and otherwise modernize Spain's sagging economy. Although internal EC problems continued to plague
Spain's already protracted negotiations, in the first
two years of his stewardship GonzaIez was instrumental in ensuring that Spain would join the EC
without further delay (his elose relationship with
Fran90is Mitterrand was perhaps Gonzalez's
greatest asset in this regard). At the same time,

255

GonzaIez refuted his earlier opposition to NATO,

which Spain had joined in 1982 under the centrist
government of Adolfo Suarez, and mobilized public opinion in favor of continued NATO membership in the 1986 referendum.
Along with a favorable global economic environment, EC membership--notably the inward investment and structural funds that came with itprovided the boost that Spain's economy needed.
Politically, EC membership represented areturn
for Spain to international respectability. By the
late 1980s, as Spain's leading advocate of modernization and eloser ties to the rest of Europe,
GonzaIez came to personify the country's youthful democracy, prosperity, and hope for the future.
Gonzalez supported moves in the late 1980s and
early 1990s toward deeper integration and insisted
that any treaty revision inelude provisions for a
"cohesion fund" to help narrow the disparities between the EC's stronger and weaker economies. In
a feat of diplomatic deftness and political will,
Gonzalez got his way: the Treaty on European
Union (TEU) called for the establishment of a cohesion fund by the end of 1993. Gonzalez was
also instrumental in ineluding the concept of EU
citizenship in the new treaty.
Another provision of the TEU, however,
proved tricky for GonzaIez. As part of the agreement to implement Economic and Monetary
Union (EMU) by the end of the decade, the treaty
ineluded a number of convergence criteria--economic requirements that any country wishing to
participate in the single currency would have to
meet. To achieve these goals, Spain faced years of
budget cutbacks. Not all sectors of Spanish society shared Gonzalez's Eurofever, not least trade
unions intent on maintaining Spain's liberal unemployment benefits. Nor was the PSOE in complete accord with its leader's seeming tilt to the
right. At the same time, a deep recession throughout Europe triggered high unemployment in
Spain. By the mid-1990s, despite the conspicuous
lack of a formidable opposition, GonzaIez's political position had weakened. It was domestic political developments, however, that proved Gonzalez's undoing and overshadowed Spain's
presidency of the Council of Ministers in the latter
part of 1995. Amid accusations of corruption and
the operation of a secret antiterrorist murder
squad, GonzaIez lost the March 1996 general election.
See also SPAIN.

256

Greece

Greece
Greece became the tenth member of the EC in
1981, having been an associate member since
1962. Greece's road to EC membership was
blocked in 1967 when a military junta overthrew
the country's democratic government. Only when
democracy was reestablished in 1974 did Greece
again receive economic and technical assistance
and become a contender for EC accession (Kazakos and Ioakimidis, 1994).
Indeed, the postdictatorship era in Greece
was marked by the country's preoccupation with
EC membership. The distinguished conservative
politician, Konstantinos Karamanlis, was perhaps
most responsible for Greece's successful effort to
join, thanks largely to his diplomatic skills and
elose relationship with French president Valery
Giscard d'Estaing. The Commission had given a
negative opinion on Greece's application, arguing
that economic conditions in Greece were not yet
right for full membership. However, for political
reasons (notably to discourage any attempts by the
military to reestablish an authoritarian regime) the
Council of Ministers disregarded the Commission's opinion and approved the Greek application. The primacy of political considerations set a
precedent for subsequent Iberian and Central and
Eastern European accessions.
Greece's relationship with the EC and EU has
gone through four major phases: (1) the preparatory and enthusiastic stage (1974-1981) under the
conservative New Democracy party's leadership,
which culminated in an accession treaty; (2) a period of strained relations (1981-1989) during the
socialist party's rule, owing mainly to the beIligerent approach of Prime Minister Andreas Papandreou; (3) an interregnum (1990-1993) under the
New Democracy government of the Euroenthusiastic Konstantinos Mitsotakis, when Greece was
elosest to the EC; and (4) a final stage (post-1993)
when PASOK, the socialist party, came back to
power. Although PASOK had considerably
changed its attitude toward European integration,
nevertheless Greece-EU relations were strained
during this fourth stage for two major reasons:
first, Papandreou's past behavior did not inspire
confidence among his European counterparts; second, Greece found itself embroiled in the Balkan
conflicts, which created psychological and political complexes. Yet it is noteworthy that Papandreou's departure from office in February 1996
brought a new leadership to the country that is

younger, less ideological, less nationalistic, andmost important-more pro-European. The new
prime minister, Kostas Simitis, and the development minister, Vaso Papandreou, are weIl known
in EU cireles and have promised to bring the
country eloser to Brussels.

Assessment
Greece's membership in the EC should be assessed from three important perspectives: economic factors, foreign and security policy considerations, and political and cultural issues.
The economy. Greece's hopes that the economy would benefit immediately from greater market access as a result of EC membership proved unrealistic. Far from contributing to economic
development, market opening played a negative
role. Well-established industries in northern European countries did not perrnit the less-competitive
Greek industries to adapt successfully. This is reflected in the relative economic position of Greece
vis-a-vis the other member states, which is believed
to have worsened since Greek accession. In 1980
the Greek GDP per capita was 58 percent of the
EC's average; by 1991 it had fallen to 52 percent
and was still dropping (Kazakos and Ioakimidis,
1994). Although this is one way to estimate the economic impact of membership, there are other important considerations. Greece is one of the member states that has received generous financial
transfers from the EU's structural and cohesion
funds to launch infrastructural projects that are essential for the country's future economic development. Greece is currently engaged in a number of
large-scale projects that will fundamentally alter
the country's economic prospects by the year 2000,
including construction of a new international airport in Athens (the largest European project underway), the Egnatia Highway to connect northeastern
Greece to the Ionian port of Igoumenita in the west,
and the Athens Metro. EU funding covers most of
the cost, with Greece providing the balance.
Because Greece receives large amounts of
money for deve10pment projects, critics of Greek
membership point out how little Greece contributes to the EU economy. Strictly speaking this
is accurate, but EU member states benefit from
each other not only through visible and measurable transactions but also by means of hidden
trade and nonconspicuous money transfers. For
instance, most of the above-mentioned projects
are being carried out by contractors from other EU

Greeee
member states (mainly from countries that are net
contributors to the EU budget). Thus large parts of
the net contributors' funds are repatriated, even
more so because the Greek government contributes also to the funding of these projects.
Furthermore, Greece and the EU stand to benefit economically from recent changes in the Balkans
and in Central and Eastern Europe generally. As
mentioned earlier, Greek companies have not been
able to take advantage of a highly competitive EU
market. In the emerging Balkan markets, however,
Greek companies have taken a leading role compared to those of other EU countries. Three factors
have contributed to the success of Greek economic
involvement in the Balkans: first, Greece has enjoyed some influence indirectly through the EU's
programs (such as Pologne et Hongrie: Actions
poUf la Reconversion Economique-PHARE) for
economic assistance to the region; second, Greece
is the only EU member state that borders the Balkan
states; and third, there is a strong cultural affinity
between Greek and other Balkan businessmen. As
one observer remarked, the Greeks are not deterred
by the shaky legal framework, bureaucratic foot
dragging, and delays in obtaining licenses and permits that are still an inevitable part of doing business in the Balkans.
Foreign poliey and seeurity. Greece's geographical position-separate from the other member states and at the end of the Balkan Peninsula-inevitably affects Greece's role in the EU.
For instance, Greece has frequently taken a stand
on foreign policy issues markedly different from
one that would otherwise reflect a "common" EU
foreign policy position. During most of its EU
membership, Greece was governed by PASOK
under the leadership of Andreas Papandreou. Papandreou's independent and ideological positions
often suggested that the country's interests were
best served by having elose relations with the Soviet bloc rather than with Western Europe.
Until the end of the Cold War the country's
borders were relatively secure and protected from
possible Soviet aggression by NATO. At the same
time, Greece's territorial integrity was threatened
by neighboring Turkey, a NATO member and an
EU associate member. The disintegration of the
Communist bloc, the five-year conflict in Bosnia,
and the irredentist tendencies of the newly formed
republics in the Balkans resulted in new insecurities. Moreover, to a large extent Greeks considered themselves abandoned by the EU when these

257

new threats arose. In particular, there were two

cases in which Greece feIt that it was not supported by the EU: the first had to do with the
name, constitution, and flag of the Former Yugoslav Republic of Macedonia; the second was the
dispute between Greece and Turkey over an uninhabited island in the Aegean, about which U.S.
diplomat Richard Holbrook, architect of the Dayton Peace Accords, accused the EU of "Iiterally
sleeping through the night" as Greece and Turkey
went to the brink of war (quoted in The Economist, May 18-24, 1996, p. 50).
Although Greece is generally seen as deviating from the EU foreign policy norm, a elose
analysis of the country's foreign policy since the
early 1980s suggests that Greece helped rather
than hindered the development of a genuine EU
foreign and security policy. Even during Papandreou's reign, Greek reca1citrance may have
proved beneficial for the EU. For example, in the
early 1980s, Papandreou's harrnonious political
approach to the Soviet Union helped ease the
strain of EC-USSR relations. Similarly, in the
early 1990s, because Greece was the only EU
member state to maintain good relations with Serbia, Greece helped build a bridge between Brussels and Belgrade. But perhaps the most significant contribution by Greece to the EU's fledgling
foreign and security policy is its insistence on
greater solidarity and cooperation. Regardless of
ideological orientation, Greece's political leadership always sought an EU commitment to the protection of external borders. An example of this
was Prime Minister Simitis's support at the European Council in Florence in June 1996 for a future
"elause of solidarity in the EU in case there is a
threat for the external borders," a move fully consistent with the spirit of the Treaty on European
Union (TEU) (Macedonian Press Agency, June
23, 1996). Although Greece does not feel protected by the EU in terms of foreign policy and security, nevertheless it is fair to conelude that EU
membership has enhanced Greece's overall security: only in extraordinary circumstances would
another country attack an EU member state.
Politieal stability and culture. A quest for
political stability was the foremost reason why
Greece applied for EC membership. Developments since 1981 prove that this goal has been accomplished: Greek political parties have been
modernized; elections have been free and fair; and
the constitution has been revised to incorporate a

258

Green Currencies

number of provisions that are even more advanced

than those in most democratic countries.
Perhaps one of Greece's most important contributions to the EU is in the area of integration
culture. Given their long and distinguished history,
Greelcs see themselves as having the strongest ethnie and cultural identity in Europe. Surprisingly,
such strongly held nationalistic and cultural attitudes do not necessarily conflict with the EU's
ideal of integration. Indeed, Greeks generally feel
able to preserve their national independence and
cultural heritage while participating fully in European integration. This would appear to contradict
the theory that the more nationalistic an EU member state, the less likely it will be to support the development of a strong EU (Hoffmann, 1966). Measurements of member-state public opinion with
regard to deeper European integration consistently
show Greece near the top of the table. The Greek
parliament has been even more positive about European integration. For instance, 286 of the 300
Greek parliamentarians voted in favor of ratifying
the TEU (Koliopoulos, 1994).

Conc/usion
The relationship between Greece and the EU may
not be what optimistic supporters of membership
had initially expected. Clearly, a general economic
convergence of Greece toward the level of the
most advanced member states has not happened.
Nevertheless, Greece hopes to meet the TEU criteria for participation in the final stage of Economic
and Monetary Union. Inflation in Greece has
fallen considerably, the national debt has dropped,
and the Greek government seems determined to
cut the budget. Without guidelines and pressure
from the EU, such an economic turnaround would
not have happened.
There are a number of areas in which both the
EU and Greece have benefited from Greek membership. Greece has become a stable democracy,
has enhanced its position in world affairs, and has
improved its national security and its bargaining
powers vis-a-vis its neighbors. These are perhaps
the main reasons why Greek public opinion is
among the most supportive in Europe of deeper integration. Yet it would be wrong to assurne that EU
membership benefits Greece without Greek membership's benefiting the EU as weIl. Greece's geographical and cultural characteristics provide two
irnportant links to Europe: one is the physicallink
with the countries of southeastern Europe and the

Middle Bast; the other is the culturallink to the Orthodox world. Greeks can be said to possess two
identities: one Bastern and the other Western (Pettifer, 1994). Because of Greek membership, the EU
is perhaps able to understand the Balkans better.
Finally, Greece has contributed to the EU the
largest merchant fleet in the world (more than 50
percent of the EU's merchant vessels belong to
Greece). Apart from the fleet itself, Greece has
contributed to the EU its "long-standing commercial and shipping links with the Arab countries
and the Balkans.... [These] are a new Community asset, which the Greek Government described
as 'the dowry we bring with us as a new ... member'" (Daltrop, 1989, p. 157).
See also TABLE 6; APPENDIX 2; APPENDIX 3.

Bibliography
Daltrop, Ann. 1989. Political Realities: Politics and the
European Community. London: Longman.
Hoffrnann, Stanley. 1966. "Obstinate or Obsolete? The
Fate of the Nation-State and the Case of Western Europe." Daedalus 95 (Summer), pp. 892-908.
Kazakos, Panos, and P. C. Ioakimidis. 1994. Greece and
EC Membership Evaluated. New York: St. Martin
Press.
Koliopoulos, Kostas. 1994. "Greece and the Ratification
of the Maastricht Treaty." In Finn Laursen and Sophie Vanhoonacker, eds., The Ratification of the
Maastricht Treaty. Maastricht: European Institute of
Public Administration.
Pettifer, James. 1994. The Greeks: The Land and People
Since the War. Middlesex: Penguin.

-Christos Bourdouvalis

Green Currencles
Green currencies were artificial exchange rates introduced at a time of fluctuating real exchange
rates in the late 1960s in order to maintain uniform, EC-wide prices in the Common Agricultural
Policy (CAP). Farmers received Monetary Compensatory Amounts (MCAs) to bridge the gap between green currencies and real exchange rates.
Green currencies further complicated the already
complex CAP, emphasizing its remoteness from
economic reality.
See also COMMON AGRICULTURAL POLICY.

Greenland
Greenland caused a minor sensation in January
1985 by leaving the EC. Greenland was a member

Gymnich Meeting
not in its own right but by virtue of "belonging" to
Denmark. Greenland won horne rule in 1978, and
a majority of Greenlanders voted in a referendum
on February 23, 1982, to leave the EC. Denmark,
still responsible for Greenland's foreign relations,
negotiated the necessary agreement with the Commission.
See also TABLE 10.

Green Paper
A green paper is a vehic1e the Commission uses to
communicate ideas and stimulate interinstitutional
and public discussion about proposed policies and
programs. The Commission issues about ten green
papers annually.

Greens
See

PARTY GROUPS IN THE EUROPEAN PARLIAMENT.

Group of Coordlnators
The group of coordinators is a group of memberstate officials that coordinated the work of special
committees (such as the Trevi Group and the Adhoc Group on Immigration) dealing with issues
that subsequently came under the third pillar (Cooperation on Justice and Horne Affairs) of the
Treaty on European Union (TEU). After implementation of the TEU, the group of coordinators
became known as the K.4 Committee, named for
the relevant provisions of the treaty.
See also COMMITIEE OF PERMANENT REPRESENTATIVES; JUSTICE AND HOME AFFAIRS.

Group of Correspondents
The group of correspondents is a group of junior
foreign ministry officials responsible for day-today liaison between member states on Common
Foreign and Security Policy issues and before that
on European Political Cooperation.
See also COMMON FOREIGN AND SECURITY
POLICY; EUROPEAN POLmCAL COOPERATION.

259

Gulf Cooperatlon Councll (GCC)

The EU has a strained relationship with the Gulf
Cooperation Council (GCC) and its membersSaudi Arabia, Kuwait, the United Arab Emirates,
Qatar, Bahrain, and Oman. Despite having signed
a cooperation agreement in 1988 and having
opened talks on a possible free trade agreement in
1990, fundamental political and economic differences separate both sides. Most recently, the GCC
reacted angrily to a Commission initiative to introduce a carbon dioxide energy tax in the EU, fearing that it would greatly reduce demand for oil.
Although the proposal has been shelved, the GCC
remains wary of the EU's environmental activism.

GulfWar
The Gulf War broke out in January 1991, during
the early months of the EC's intergovemmental
conferences (IGCs) that resulted in the Treaty on
European Union (TEU). The war and the preceding crisis, which began after Iraq's invasion of
Kuwait in August 1990, demonstrated the member
states' inability to coordinate their security and defense policies and the EC's fundamental weakness
vis-a-vis the United States. Thus, the Gulf War
seemed to strengthen the member states' resolve
in the IGC on political union to give the putative
EU the means to project political and even military power. In the event, neither the Gulf War nor
the Yugoslav war, which broke out in June 1991,
proved adequate to overcome deep-rooted national reluctance to develop a common defense
policy, and the TEU's provisions for a Common
Foreign and Security Policy were surprisingly
weak.

Gymnlch Meeting
A so-called Gymnich meeting is an informal
meetings of foreign ministers, held once during
each six-month Council presidency, to allow a casual exchange of views. The first such meeting
was held at Schloss Gymnich under the German
presidency, in 1973.

H
Hague Congress
See

CONGRESS OF EUROPE.

Hague Platform
Adopted by the Western European Union (WEU)
council in The Hague in October 1987, the Platform on European Security Interests (the Hague
Platform) was an important milestone in the
WEU's revitalization after more than thirty years
of hibernation. The declaration set out general
guidelines for the WEU's role as the putative defense ann of the EC and as the basis of a strengthened European pillar of NATO.
See also WESTERN EUROPEAN UNION.

Hague Summlt
The Hague summit of the heads of state and govemment of the six EC member states on December
1 and 2, 1969, symbolized the EC's emergence
from the shadow of French president Charles de
Gaulle, who had blocked enlargement and supranationalism until his resignation earlier that year. In
view of Western concern about the possible impact
of Germany's new Ostpolitik (policy of rapprochement toward the Soviet bloc) and domestic pressure
for a French initiative in the EC, President Georges
Pompidou (de Gaulle's successor) called a special
sumrnit (the European Council did not yet exist).
The sumrnit took place in The Hague, as the
Netherlands then held the rotating EC presidency.
This was the first meeting of EC leaders since the
tenth anniversary celebration of the Treaty of Rome
in 1967. With de Gaulle gone and enlargement once
again at center stage, most member states anticipated a decisive breakthrough; in the end, the sum-

mit spawned the "spirit of The Hague," a feeling

that the EC was once more on the move.
See also POMPIDOU, GEORGES.

Hallstein, Walter (1901-1982)

Walter Hallstein was the first president of the Commission. Apart from an academic interest in European integration, Hallstein's initial involvement in
the European movement came in the early 1950s,
when Chancellor Konrad Adenauer asked him to
represent Germany in the negotiations to bring the
Schuman Plan to fruition. Accordingly, Hallstein
worked closely with Jean Monnet to bring about
the European Coal and Steel Community.
In the mid-1950s Hallstein served as state
secretary in the German Foreign Office be fore
taking up his appointment as president of the
Comrnission in 1958. From the beginning of his
presidency, Hallstein used every opportunity to espouse European union along federal lines and
sought to turn the Comrnission into an embryonic
govemment of a supranational EC. This put Hallstein squarely at odds with French president
Charles de Gaulle, who bitterly opposed any extension of the Commission's power. The showdown came in early 1965, when Hallstein introduced proposals to link completion of the
financial arrangement of the Common Agricultural Policy (CAP), which was due to take place
on July I that year, with greater budgetary power
for the European Parliament (EP) and executive
authority for the Comrnission. Robert Marjolin, a
vice president of the Comrnission, wamed Hallstein not to persist with his CAP and decisionmaking proposals. Although de Gaulle wanted a new
financial regulation for the CAP, he wanted even
more to thwart Hallstein's ambition. In a conflict
between both men, Marjolin knew, de Gaulle
would easily come out the winner.
But Hallstein pressed ahead and took the additional inflarnmatory step of first announcing the
proposals, not to the Council of Ministers in Brussels, but to the EP in Strasbourg. De Gaulle made
clear to his Community counterparts that France
would reject the Commission's proposals. The
crucial Council meeting opened on June 28 and
ended in deadlock two days later. De Gaulle
promptly recalled his permanent representative to
Paris and announced that French officials would
no longer participate in the Council or its numerous comrnittees, thus precipitating the so-called

261

262

Hard Care

Empty Chair Crisis. The real issue at stake was

not so much agricultural policy or budgetary authority, however, but the planned move to qualified majority voting in the Council on January 1,
1966, which de Gaulle saw as an unacceptable assault on national sovereignty and Hallstein saw as
indispensable for the EC's deve1opment.
The crisis, which paralyzed the EC for seven
months, was eventually resolved at a foreign ministers' meeting in Luxembourg in January 1966.
There, both sides approved a short dedaration, the
Luxembourg Compromise, which amounted to an
agreement to disagree over majority voting. Although maintaining the principle of majority voting, the comprornise acknowledged that "when
very important issues are at stake, discussions
must be continued until unanimous agreement is
reached."
Ostensibly, the outcome was a draw or even a
victory for the Ee. The French presidential e1ection
result of December 1965 had apparently clipped de
Gaulle's wings, the other member states had not reneged on majority voting, and the Community soon
resumed full operation. Yet in reality the crisis
ended in victory for de Gaulle: not only was agricultural funding secure but also Hallstein's supranational ambitions were severely curtailed. As a result, the crisis had profoundly undermined both
Hallstein's credibility and the Comrnission's confidence. For weIl over a decade thereafter the Commission refrained from asserting itself.
De Gaulle exacted his revenge on Hallstein
when the member states discussed the composition of the new, merged Comrnission of the Communities, due to come into office in July 1967.
Kurt Kiesinger, the German chancellor, wanted to
renominate Hallstein as Commission president,
but de Gaulle strenuously opposed the nomination. The issue quickly degenerated into an undignified squabble, with a possible compromise involving Hallstein's appointment for one year only.
In May 1967 Hallstein settled the matter by announcing his impending resignation. He stepped
down on July 6, 1967.
See also COMMISSION; DE GAULLE, CHARLES.

Hard Core
Various interpretations of differentiated integration posit the existence of a "hard core" (or "core
group") of like-minded EU member states that
would forge doser economic, political, and secu-

rity cooperation among themselves, regardless of

the EU's less-comrnitted member states. Speculation on the membership of a possible hard core inevitably includes France, Germany, and the
Bene1ux countries: essentially, the EC's original
member states, minus Italy.
See also DIFFERENTIATED INTEGRATION.

Hard ECU
The hard ECU was a British proposal of June 1990
for the launch of a hardened European currency
unit (ECU): an ECU that could not be devalued
against its component currencies. The hard ECU
would be another, parallel currency circulating
alongside existing national currencies. A new institution, the European Monetary Fund, would issue
the hard ECU. In time, the hard ECU could develop into a dominant common currency and even
into a single currency, ifthe EC's member states so
decided. Some member states saw the proposal as
a British effort to thwart the intergovernmental
conference (IGC) on Economic and Monetary
Union (EMU) that opened in December 1990. Others saw it as an indication that Britain took the
prospect of EMU seriously. In the event, the proposal was too idiosyncratic and came too late to influence the single currency debate. Nevertheless,
Britain continued to advocate the hard ECU until
almost the end of the IGC, in December 1991. By
the time Britain quietly dropped the hard ECU
idea, its main concern was to stay in the fast track
of a de facta two-speed EU while keeping open the
option of not participating in a single currency.
See also Ecu; ECONOMIC AND MONETARY
UNION: TOWARD A SINGLE CURRENCY.

Harmonlzatlon
See

EUROPEAN STANDARDS COMMITTEE; REGULA-

TORY POLICY; SINGLE MARKET PROGRAM; STANDARDS AND CONFORMITY ASSESSMENT.

Health Pollcy
For obvious reasons, member states have been reluctant to cede responsibility for health policy to
the EU. Yet even the most reluctant member states
concede that the EU has an important role to play
in promoting public health, notably by coordinating and enhancing national policies and programs
and by liaising with nonmember states and rele-

Heath, Edward (7916-)

vant organizations. Accordingly, the Treaty on European Union included a new clause (Article 129)
on public health, giving the Council of Ministers
the authority to adopt (under the co-decision procedure) "incentive measures" for health protection
but not including the harmonization of the memher states' laws and regulations. The Commission
set out the broad lines for action in the field of
public health in a 1993 framework document,
which provided for programs in eight priority areas, such as cancer, AIDS, health promotion, and
drug dependence. Most of these programs have
since been adopted. Two years later the EU
adopted its first report, prepared jointly with the
World Health Organization, on the state of health
in the EU (the report painted a reasonably good
picture but pointed out striking disparities and important health problems that need to be resolved).
Given the limited scope of Article 129, and the
general emphasis on subsidiarity (member states'
rights), inevitably health policy made little
progress at the EU level. Indeed, it seemed more
significant as a political battleground for the contentious co-decision procedure than as a substantive policy area. Nevertheless, the Amsterdam
Treaty amended Article 129 to give the EU greater
power in the field of public health policy.

Heath, Edward (1916- )

As prime minister of Britain, Edward Heath
brought his country into the EC in 1973. He first
became involved with the EC in 1960, when
Harold MacmiIlan, then Britain's prime minister,
instructed Heath to conduct Britain's first entry
negotiations in Brussels. French president Charles
de GauIle abruptly vetoed those negotiations on
January 14, 1963. Although bitterly disappointed,
Heath persevered in his determination to bring
Britain into the EC.
Heath's next opportunity to do so came in
1970 when he became prime minister after his
Conservative Party's election victory. Harold Wilson, Heath's predecessor as prime minister, had
submitted Britain's second application for EC
membership in 1967, but de GauIle had again exercised a veto. De Gaulle's resignation in 1969
and replacement by Georges Pompidou augured
weIl for a reactivation of Britain's application, and
Heath's election one year later gave added impetus to Britain's effort to join. Yet few of Heath's
fellow Conservative Party members shared the

263

prime minister's ardor for integration. Most saw

membership largely in negative terms-as
Britain's only feasible option. The issue also split
the opposition Labour Party, whose leader, Harold
Wilson, now equivocated. As the entry negotiations unfolded, Wilson moved from ambivalence
toward open opposition of British accession,
bringing the bulk of Labour with him.
FoIlowing the political breakthrough at the
Hague summit on December 1 and 2, 1969,
Britain's entry negotiations beg an on June 30,
1970, in Luxembourg and ended almost a year
later in Brussels. Familiar issues from Britain's
previous applications resurfaced in the new discussions. However, the talks were far less contentious and protracted than in the early 1960s.
For one thing, Heath was so eager for membership
that he quickly settled any differences; for another, Commonwealth and European Free Trade
Association concems about British membership in
the EC had abated in the intervening decade. The
impact on the Commonwealth of Britain's accession to the EC now focused exclusively on specific problems like imports of Caribbean sugar
and New Zealand dairy products. Nevertheless,
the negotiations occasionally stalled, particularly
on the controversial questions of Britain's budgetary contribution during the transition phase and
the related issue of the dubious henefit to Britain
of the Common Agricultural Policy.
A meeting between Heath and Pompidou in
Paris, on May 20 and 21, 1971, helped resolve the
outstanding problems and set the tone for Britain's
first year in the EC. So harmonious was the HeathPompidou relationship, in marked contrast to the
relationship between German chancellor Willy
Brandt and Pompidou, that to some it appeared that
Britain was set to replace Germany as France's favored EC partner. In the event, the leadership of a1l
three countries changed at approximately the same
time in early 1974, and the old pattern of FrancoGerman leadership soon reasserted itself. Valery
Giscard d'Estaing succeeded Pompidou, Helmut
Schrnidt replaced Brandt, and Heath lost the February 1974 general election to Harold Wilson.
Soon afterward, Heath lost the Conservative
Party's leadership to Margaret Thatcher. The political and personal differences between them were
striking, especiaIly on European issues. Heath remained avidly committed to the Community,
whereas Thatcher strongly opposed deeper political integration. Heath suffered through Thatcher's

264

He/sinki Accords

eleven years in office, repeatedly attacking her

negativism and obstructionism toward the EC. His
numerous House of Commons speeches denouncing Thatcher's EC policy-and that of her successor, John Major-were especially prescient and
enlightening.
See also UNITED KINGDOM.

Helslnkl Accords
See HELSINKI FINAL Acr.

Helslnkl Final Act

The Final Act of the Conference on Security and
Cooperation in Europe (CSCE) was signed in
Helsinki in August 1975 by the heads of state and
government of the thirty-five participating countries (all European countries except Albania, plus
the United States and Canada). The Helsinki Final
Act (also called the He1sinki Accords) was not an
international treaty but a statement of political intent and commitment to bring about peaceful
change, to rninimize the dangers of rniscalculation, and to manage crises and controversies in
East-West relations. Grouped in three "baskets,"
or categories of commitments, the accords covered political, econornic, cultural, humanitarian,
information, and military confidence-building
measures. The conference that culrninated in the
Helsinki Accords was one of the first occasions on
which the EC's member states coordinated their
foreign policies through the mechanism of European Political Cooperation.
See also EUROPEAN POLmCAL COOPERATION.

Heisinkill
See

CHARTER OF PARIS FOR A NEW EUROPE.

Hlerarchy of Norms
This phrase refers to a c1assification of EC acts
that range from advisory to legislative, with a
view to establishing an appropriate hierarchy for
them. The Treaty on European Union contained a
Dec1aration on the Hierarchy of Community Acts,
and the EU's member states agreed to attempt at
the 1996-1997 intergovernmental conference to
draw a c1ear distinction between genuine1y legislative measures, which need to be decided upon
by the Council of Ministers and (in some cases)

the European Parliament, and other rule-making

acts that may be adopted by the Comrnission (as
the EU's executive). In the event, the Amsterdam
Treaty did not address the issue.

High Authorlty
The High Authority of the European Coal and
Steel Community (ECSC) was the supranational
institution responsible for formulating a common
market in coal and steel and for such related issues
as pricing, wages, investment, and competition.
Jean Monnet, author of the Schuman Plan that
gave rise to the ECSC, became the High Authority's first president in 1952 (he resigned in 1955).
In 1965 the member states signed a treaty merging
the executive institutions of the three Communities, thereby establishing a single Comrnission and
a single Council of Ministers. When the merger
treaty came into force on July 1, 1967, the High
Authority ceased to exist.
See also COMMISSION; MONNET, JEAN.

High Level Group of Experts

on the Common Forelgn and
Securlty Pollcy
In 1994 Hans van den Broek, the comrnissioner
for external political relations, convened a group
of current and former senior officials of national
governments and EU institutions to advise on foreign and security policy in advance of the
1996-1997 intergovernmental conference. In December 1994 the High Level Group of Experts on
the Common Foreign and Security Policy issued a
report, "European Security Policy Towards 2000:
Ways and Means to Establish Genuine Credibility." The report dealt with a range of issues and
made a number of recommendations, inc1uding
the appointment of a senior politician to direct and
personify the EU's foreign and security policy.
See also COMMON FOREIGN AND SECURITY
POLICY.

Horlzon 2000
In an effort to improve coordination between the
EU's development policy and member-state aid
programs, in 1992 the Comrnission produced the
Horizon 2000 report, which proposed strategies for
cooperation and collaboration until the year 2000.
See also DEVELOPMENT POLICY.

Human Rights

Human Rights
Protection of fundamental human rights has been
a central feature of modern constitutions as weIl
as much of the judicial review activity of supreme
courts in Western countries in the postwar era.
Concepts such as individual dignity and privacy as
weIl as more classical notions of liberty and
equality be fore the law have been the standard
repositories of constitutional interpretation by
courts exercising judicial review of governmental
legislation and administrative action.
Both the concept and practice of judicial review have penetrated, albeit in a limited way, even
legal cultures such as Britain and France that for
long have resisted. Indeed, judicial review in general and the protection of individual rights in particular are widely considered as a conditio sine
qua non of constitutional democracy and the rule
of law. Yet the treaties establishing the European
Community-the constitution of the EC--contain
neither a bill of rights nor any reference at all to
the need for, or the means of, protecting fundamental human rights against encroachment by EC
(now EU) public authorities.
The absence of a reference to human rights in
the treaties is not unique. Many regulatory treaties
do not contain human rights protection clauses.
Should astate in pursuance of its international
treaty obligation seek to violate the rights of the
individual or should an international organization
seek to do the same thing, the individual would, it
could be thought, receive his or her protection
from national courts applying national constitutions and from transnational bodies specifically
set up for the protection of human rights. But the
EC developed in a way that rendered the absence
of human rights protection problematic. Starting
in the early 1960s, the European Court of Justice
(ECJ) put in place a constitutional reading of the
treaties that gave many of their provisions "direct
effect," meaning that they were to be considered
part of the law of the land. What is more, these directly effective provisions were to be the
"supreme" law of the land-a higher law overriding conflicting national provisions.
Accordingly, it became legally and politically
imperative that a way be found to vindicate fundamental human rights at the Community level. How
could one assert the direct effect and supremacy of
European law-vesting huge constitutional power
in the political organs of the Community-without postulating embedded legal and judicial guar-

265

antees on the exercise of such power? After all, the

effect of direct effect and supremacy would be to
efface the possibility of national legislative or judicial control of Community law. This imperative
was all the more urgent given the notorious democratic deficiencies of European governance, in
some respects more acute in the 1960s than in the
1980s and 1990s. How could one expect the constitutional and other high courts of the member
states-especially of those member states with national constitutional orders and judicial review,
such as, at that time, Germany and Italy-to accept the direct effect and supremacy of Community norms without an assurance that human rights
would be protected within the Community legal
order and, criticaIly, that individuals would not
lose any of the protections afforded under national
constitutions? Protecting human rights became a
joined legal and political imperative.
Among the human rights narratives in the EU
two themes seem to be of utmost importance. The
first is structural, namely the ways in which the
constitutional gap came to be fully or partially
filled. The second is, for want of a better term,
spiritual, namely the way in which the concept of
human rights enmeshes (or otherwise) with the
specificity of European integration as distinct
from normal constitutional orders.
In the absence of a written bill of rights in the
treaties and the EC's apparent freedom to disregard
individual rights in Community legislation and administrative action, the ECJ, in an exercise of hold
judicial interpretation and areversal of an earlier
case law, created an unwritten higher law of fundamental human rights. Culled from the constitutional
traditions of the member states and international
agreements such as the European Convention for
the Protection of Human Rights and Fundamental
Freedoms, this higher law provided a yardstick
against which legislative and administrative acts of
the Community organs binding on or affecting individual citizens could be measured in the normal
course of judicial review provided by the treaty. In
recent years the court has extended the purview of
this judicial power to certain limited classes of
member-state acts, principally in cases where member-state authorities act as the executive arm of the
Community. The content of this "unwritten bill of
rights" is rather traditional and represents some
synthesis of the constitutional traditions of the
member states. The court has also stated that EC
measures that violate the relevant substantive provi-

266

Human

Rights

sions of the European Convention for the Protection of Human Rights and Fundamental Freedoms
are not acceptable in the Community.
Attempts to codify such practices into a written bill of rights entrenched in the treaties, such as
the April 1989 European Parliament (EP) Declaration of Human Rights, have not found favor in the
various intergovernmental conferences (lGCs) convened over the years to modify the treaties.
Nonetheless, the content of the parliamentary declaration represents a good image of the actual content of rights protected by the court. Likewise, several initiatives to push for the adhesion of the EC to
the European Convention for the Protection of Human Rights and Fundamental Freedoms-notably a
Commission initiative in 1978-have been rebuffed
by both the member states and the ECJ. Attempts to
extend the canopy of protection to the EU as a
whole were unsuccessful at Maastricht. Although
the Treaty on European Union contains a general
human rights clause, activities outside the first pillar (EC) are excluded from judicial review, rendering the commitment more hortatory than real.
The EC's and EU's human rights activity is
not confined to the judicial process. Protection of
human rights is one of the objectives of the second
and third pillars (the Common Foreign and Security Policy and Cooperation on lustice and Horne
Affairs) as weH as a dimension of the development and cooperation policy of the Community
(Article 130u). Even before, and without a clear
mandate, there was a piethora of nonjudicial activity. The principal expressions of this have been
numerous resolutions and questions in the EP on
an infinite variety of human rights issues, resolutions and "statements" of the European Council in
the framework of European Political Cooperation
and the Common Foreign and Security Policy, and
discussions in other more generic contexts.
Respect for human rights has become a frequent feature in legal instruments regulating relations of the Community with third countries, and
numerous items of expenditure would come under
this rubric, notably the laudable, if shady, transfers
of funds to the European Rights Foundation, the activities of which most certainly extend weH beyond
the competences of the Community and the EU.
But it is the legal arena that best explicates
the problematics of human rights and integration.
The central role played by the ECI has not been
without controversy. Although the court arrogated
apower nowhere mentioned in the treaties, the

general trend has been supportive of the court. Indeed, it is now widely accepted that the court did
have sound legal grounds on which to base its jurisprudence. It is also a widely shared view that
the court acted not only legally but also wisely in
filling an embarrassing lacuna in the treaty and in
giving the individual an additional judicial guarantee. The notorious democratic deficit of the
Community rendered the usual "counter majoritarian" critique of judicial review less convincing.
In a 1977 joint declaration, the EC's principal political institutions not only expressed their commitment to upholding fundamental human rights
but also endorsed the new judicial architecture.
One area of controversy has concerned the
practice of the court in specific cases as distinct
from the principle of protection. It has been
charged of the court that its human rights jurisprudence is a rhetoric that masks a strategy of self-aggrandizement and political legitimation of the
Community. This tantalizing critique suffers from
its own self-aggrandizement and has not been satisfactorily demonstrated. Reality is far more banal. The record of the court displays a patchiness
that is characteristic of all supreme courts operating in this treacherously politicized field.
A second area of controversy, far more real,
has been that of "standards." In asserting its right
to subject Community legislation to human
rights-based judicial review, the ECI denied
member-state courts the right to apply memberstate constitutional standards to Community legislation. A Community-wide standard of protection
administered by the ECI was to replace-in relation to Community legislation-review by member-state courts based on member-state constitutional provisions. The constitutional courts of
Italy and the Federal Republic of Germany refused to accept this "dictate"-although in its
more recent decisions the German constitutional
court has softened its earlier reserve.
Exploring this on-going debate will shed light
both on the dynarnics of human rights protection
and its deeper significance in the process of integration and disintegration. Indeed, few areas of European legal integration better illustrate the themes of
uniformity and diversity and of European multiculturalism. The classical vision regards a commitment to fundamental human rights as a unifying
universal ideal, one of the core values around which
the peoples of Europe may coalesce in a shared patrimony. But the opposite is true, too.

Human Rights
Beyond a certain core, reflected in Europe by
the European Convention for the Protection of
Human Rights and Fundamental Freedoms, the
specific definition of fundamental human rights
often differs from polity to polity. These differences might reflect fundamental societal choices
and form an important part in the different identities of polities and societies. They are often that
part of social identity about which people care a
great deal. Often people might consider that these
values, as an expression of their specific identity,
should be respected against any unifying encroachment. Given that the rights are considered
fundamental, so would be the differences among
them. When the court has to choose that variant of
a right for Europe, it is making, implicitly, a
choice about the cultural identity of Europe.
The problem is most easily demonstrated
when at issue is a Community measure-such as a
restriction on the use of private property-that
could be thought to violate national constitutional
provisions in one member state but not in another.
Direct effect and supremacy mean that the national
legal orders must uphold the Community measure,
potentially compromising the fundamental human
right to private property. The potential conflict of
values emerges, classically, in response to the question: which standard of protection should the ECJ
adopt? One line, suggested in some cases, would
adopt a "maximalist" approach, choosing the highest standard in the Community. There are several
reasons for this maximalist approach, including an
idealistic argument that the Community should always seek to adopt the highest standard of human
rights available. Idealism would, in this instance, be
complemented by expediency: how would you expect anational constitutional court to accept less?
And yet, the maximalist approach does not
work and cannot work and, for good reason, has
been rejected by the court. The maximalist approach would be satisfactory neither from an individual member-state perspective nor from a Community or EU perspective. In some cases it is not
achievable at all. The maxirnalist approach would
leave the Community at the constitutional dictate
of an individual member state. In many cases the
choice of the highest standard would be impossible
to achieve, as for example, when different member
states hold conflicting maximal standards. This
might be true in the field of abortion rights.
The approach of the ECJ has been to enhance
its jurisdictional autonomy and the integrity of the

267

Community judicial process. In its jurisprudence,

the implicit claim of the court has been that the
Community legal order can do no better or worse
than its national counterparts. It inevitably falls to
the court itself to achieve that fundamental balance between competing values for the Community legal order. The court has to develop a constitutional ethos that should reflect the various
member-state constitutions as weIl as the EU's
own founding treaties. It is a new polity, the constitutional ethos of which must give expression to
a multiplicity of traditions. The implicit claim of
the ECJ is that in this polity a balance will have to
be struck that derives from the specificity of the
Community. The process on this reading is not
about high or low standards. It is a call to acknowledge the Community and the EU as a polity
with its own separate identity and constitutional
sensibilities that has to define its own fundamental
balances-its own core values, even if these cannot be dissociated entirely from the context within
which the Community is situated. The Community is its member states and their citizens, but the
Community is, too, an autonomous identity.
At the deepest level, the creation of an autonomous ethos of human rights protection
reaches to the individual not only as an object of
protection but also as a moral agent. The appeal of
multiculturalism as an idea and movement is in its
invitation to a pluralist, ever-richer understanding
and acceptance of human potentialities within the
polity. But often embedded in the multicultural
political agenda is a dangerous contradiction. The
call for a pluralist multicultural society in which
the diversity of different groupings has to be acknowledged and celebrated is all too frequently,
for obvious political reasons, associated with a stifling conformism within each group making up
the multicultural polity (a conformism that favors
one aspect of individual identity-race, ethnicity,
gender, and so on-and that would have each individual define himself or herself in terms of that
identity aspect). With numbing regularity the
translation of the multidimensional vision of society is, in the arena of political praxis, achieved at
the expense of a forced, one-dimensional vision of
the individual within that society-multicultural
society composed of monocultural individuals.
The solution of the human rights issue by the
Community should be read as a recognition of the
cultural diversity that exists in the polity and that
has to be respected when making European

268

Hungary

choices. This is a two-way process of legal production and legal consumption.

Legal production is, indeed, conscious of the
multicultural soil from which this production is
nourished. This soil bears fruit in the shape of the
European human rights norm (and the reconstructed multicultural societal value that it refleets) that, in the field of application of European
law, can now be plucked by individuals in the
member states.
Legal consumption of the norm by individuals is the way in which individuals will be receiving and experiencing choices informed by a wider
cultural context than the ones they are accustomed
to. They may be educated in the practices and sensibilities of tolerance and intolerance each time
they are confronted with a norm that is different
from those they normally know. Recall, of course,
that the differences can play out both to their advantage and disadvantage. Some will react favorably, with tolerance; others unfavorably, with intolerance. Some might celebrate the brave new
world; others rnight yearn back to the comfort of
the familiar. None can be unaware of the new context to which they belong.
In this sense, then, we have avision of a society with multicultural sensibilities that is not
only reflective but also constitutive of individuals
with multicultural sensibilities. Another element
that is critical in the European human rights construct is that the European human rights apparatus
does not replace the national ones (in the member
states) or the transnational one (European Convention for the Proteetion of Human Rights and
Fundamental Freedoms). It coexists alongside
them in the sphere of application of Community
law that overlaps only partially the national and
transnational spheres. Implicit in this reading of
the European situation is the recognition of the
multiple identity of the individual. The individual
has simultaneous belongingness (French, European, and so on), which means that the "I" is not
"a Frenchman living in Europe" but an "I" that is
French and European in the same way that someone may be simultaneously male and Buddhist
and a saxophonist.
Implicit in this reading also is an "I" that has
a multiple identity defined by such diverse things
as gender, religion, and personal history, each of
which brings with it not only cultural sensibilities
but also its own claims for loyalty and correspond-

ing, and oft-conflicting, sets of values. That there

can be conflict between the sets of values is not
simply banal-it is a necessary reflection of the
complexes and conflicts that exist within each individual. From time to time, choices have to be
made between the pull of conflicting values and
loyalties. And often one such element will come to
dorninate the sense of personal identity. Whatever
the choice, how much better that it is made as a result of the internal conflict and eventual, conscious or subconscious, deliberation. And whatever element turns out to dorninate-nationality,
or religion, or gender-it is much better that it be
tempered by the conflict of competing claims and
values. European human rights, on this reading, is
multiculturalism internalized.
See also CITIZENSHIP; EUROPEAN CONVENTION
FOR THE PRarnenoN OF HUMAN RIGHTS AND

FuN-

DAMENTAL FREEDOMS.

Bibliography
Cassese, Antonio, Andrew Clapham, and J.H.H. Weiler,
eds. 1991. European Union: The Human Rights
Challenge. 3 vols. Florence: European University Institute.
Clapham, Andrew. 1991. Human Rights and the European Community. Vol. 1, A Critical Overview.
Baden-Baden: Nomos.
Schermers, Henry, and Denis Waelbroeck. 1992. Judicial Proteetion in the European Communities. 5th
ed. Boston: Kluwer.

-J.H.H. Weiler

Hungary
Hungary's econornic reforms predated the collapse
of coIl'tmunism in 1989 and positioned the country
for early accession to the EU. Trade flows between
the EU and Hungary more than doubled between
1989 and 1997 (the EU share of Hungary's total
trade is now nearly 70 percent). Hungary's Europe
Agreement came into force on February 1, 1994,
and Hungary applied for EU membership on
March 31, 1994. Hungary is pursuing a vigorous
preaccession strategy in order to be ready to participate in the single market and its flanking policies.
In July 1997 the Commission presented a favorable opinion on Hungary's application, and accession negotiations began in early 1998.
See also CENTRAL AND EASTERN EUROPEAN
STATES; TABLE 6.

I
leeland
Iceland is a member of the European Free Trade Association and the European Economic Area,
through which it is c10sely associated with the EU.
Although EU accession is discussed in Icelandic
political circ1es, widespread concern about the possible impact of the EU's common fisheries policy
on Iceland's lucrative fisheries industry makes it unlikely that Iceland will apply for full membership.
See also EUROPEAN ECONOMIC AREA; EUROPEAN FREE TRAnE ASSOCIATION.

IGe
See INTERGOVERNMENTAL

CONFERENCE.

Immigration Pollcy
Immigration emerged as an explicit Europeanlevel policy area only in the Treaty on European
Union (TEU). However, its precursor lies c1early
in the intergovernmental Ad-hoc Group on Immigration, fonned in 1986. This forum operated outside the scrutiny of the European Parliament (EP),
Commission, and European Court of Justice
(ECJ); its activities were predicated on the
"threat" posed by asylum seekers, illegal immigrants, and international crime; its secrecy modeled on the so-called Trevi Group fonned by the
member states a decade earlier to deal with terrorism and other cross-border criminal activities.
These initiatives at a European level are strikingly
one sided: they emphasize control of immigrants
and asylum seekers while offering little in the way
of immigrants' rights or measures to combat
racism or xenophobia (Geddes, 1995).

Member states have drawn up two conventions on immigration policy: the Dublin convention of June 1990 and the External Frontiers convention. The Dublin convention was not ratified
for a long time by the Irish Republic. (The European Council, meeting in Amsterdam on June 16
and 17, 1997, welcomed the completion of the ratification procedures that allowed the convention to
enter into force by September 1,1997.) The External Frontiers Convention, an elaborate set of rules
for coordinating European visa and border policies for aliens, is deadlocked by a dispute between
Spain and the UK over Gibraltar.
Also in 1990, France, Gennany, and the
Bene1ux countries signed an implementing convention for the 1985 Schengen agreement, a sophisticated intergovernmental arrangement to remove internal frontiers and strengthen external
ones, in line with the objectives of the Single European Act. Although other member states subsequently signed the treaty, Britain and Ireland secured an opt out from its provisions when the
Amsterdarn Treaty incorporated Schengen into the
TEU and committed the continental EU member
states to open their internal borders by 2004.
The TEU negotiations resulted in a structure
of "pillars" in order to preserve the intergovernmental nature of sensitive policy areas while incorporating these areas into the EU framework
(Hix, 1995). The third pillar-Justice and Horne
Affairs (JHA)-inc1udes asylum policy, crossing
of external borders, and immigration policy (Artic1e K.I [I] to [3]). Immigration policy is further
categorized into conditions of entry and movement, conditions of residence and employment,
and the combating of illegal entry, residence, and
work. The Commission has the right of shared initiative in these areas, to which Artic1e K.9allowing the transfer of competence to the first
pillar-applies. Visa policy, on the other hand, is
located within the first pillar (i.e., the EEC treaty
as amended by the TEU).
Two regulations have been passed based on
Artic1e l00c (first pillar): regulation 1683/95 establishing a model visa and regulation 2317/95 on
countries requiring visas. The latter, on which
agreement curiously was reached at a JHA meeting, names 101 countries whose nationals require
visas for entry to the EU (this compares with 129
such countries identified by the Schengen group)
and another 28 countries whose nationals may

269

270

Immigration Policy

need visas to enter certain EU countries. Thus visa

arrangements are far from harmonized.
Article K.3 of the TEU enables the Council to
adopt "joint positions," "joint actions," and "conventions." Joint positions adopted by the Council
do not produce any legal effects (O'Keeffe, 1995),
apart from an obligation to defend common positions under Article KS. Joint actions may have legal effect, but this is so far unclear. Conventions
are enacted under internationallaw, unless specifically authorizing justiciability by the ECJ: this
means that variable effects can occur, depending
on the particular legal system of the member state
(Baldwin-Edwards, 1991).
So far, only a few joint actions concerning
immigration have been taken under the third pillar, notably adecision on group travel by schoolchildren from third countries resident in a member
state and adecision on airport transit arrangements reached on November 23, 1995, listing ten
countries whose nationals require airport transit
visas when traveling through the international
zones of airports without holding entry or transit
visas. Both these Council decisions arguably
should have been located within the visa provisions of the first pillar.
JHA meetings have led to a piethora of resolutions, recommendations, and conclusions,
whose form and legal basis have been challenged
by the EP. These instruments are an attempt to approximate national policies and thus cover the
whole spectrum of immigration and residence
controls. The resolutions cover, among other topics, farnily reunification (1993), admission for employment (1994), admission for self-employment
(1994), admission for study (1994), minimum
guarantees for asylum procedures (1995), burden
sharing with regard to displaced persons (1995),
and third country nationals with long-term residence (1996). The last is significant in that it indicates arecent shift away from purely control measures and toward consideration of harmonized
rights of aliens in the EU. Largely, it incorporates
features of the 1957 Council of Europe's Convention on Establishment, which almost all EU member states implement anyway.
The recommendations include those on expulsion (1992), which deals with over stayers, illegal immigrants, and refused asylum seekers; on illegal employment and expulsion (1993), which
deals with checks and subsequent expulsion of

third country nationals; and on concerted action

on expulsion (1995).
A radical shift on immigration policy
emerged in the run-up to the 1996--1997 intergovernmental conference (lGC) and accounted for a
number of provisions in the Amsterdam Treaty.
There had been much criticism of the secrecy, unaccountability, and general lack of effectiveness of
the policy process in the third pillar. The pre-IGC
Reflection Group of foreign ministers' personal
representatives considered that matters of immigration and asylum policy needed to be put fully
under Community competence (ILPA, 1996) and
identified three main reasons for the third pillar's
failure: unclear objectives and poor scheduling;
lack of a normative legislative framework for citizens' rights; and complex working structures that
impede decisionmaking.
At the JHA meeting on November 23, 1995,
ministers agreed that they should publish acts relating to immigration, asylum, and third country nationals and that a monitoring procedure should be
set up to exarnine the effectiveness of previous JHA
instruments. The Commission, however, pushed
much harder for reform. Two recent Commission
proposals indicate the extent of this: a proposal for
a directive on the right of third country nationals
resident in an EU member state to travel in the EU
and a communication on the possible application of
Article K.9 to areas of immigration and asylum policy. The former seems logical, given that nonresident aliens allowed to enter the EU will have the
right to travel freely throughout the EU. Yet this
proposal has the problem of setting a powerfullegal
precedent for Commission activity in the sensitive
immigration area ("Legislative Free Movement,"
1996). The discussion of the K.9 passerelle (gateway) article is interesting because it argues that the
procedure for application of K.9 is too difficult: the
"double lock" requires unanimity at Council level
followed by adoption by a11 member states in accordance with their respective constitutional requirements (O'Keeffe, 1995). Thus the Commission advocated wholesale reform: nothing less than a
transfer of Article K.l(I) to (6) from the third to the
first pillar of the EU. In the event, as part of the
"progressive establishment of an area of freedom,
security, and justice," the Amsterdam Treaty incorporated immigration policy into the Ee.
One area in which the ECJ has played a significant role in immigration affairs, and effectively

Implementotion
created a circumscribed Community policy, is that
of "agreements" with third countries. These agreements-most notably association and cooperation
agreements-give rise to certain rights of residence, employment, and social benefits. The most
controversial so far have been the agreements with
Turkey and Morocco. JHA ministers have resolved to insert readmission clauses into future
agreements, whereby illegal aliens can be deported to those countries. It seems likely that these
hitherto disparate areas of policy will be more
connected in the future. Also EU citizenship, currently completely dependent upon acquisition by a
third country national of a member state's nationality, may in the future be linked with EU immigration and immigrant policy. For the moment,
however, national sensibilities and sovereignty
seem too important for extensive "Communitarization" of this area: it remains to be seen what
conditions are necessary for radical change.

See also

CITIZENSHIP; JUSTICE AND HOME AF-

FAIRS.

Bibliography
Baldwin-Edwards, Martin. 1991. ''The Socio-political
Rights of Migrants in the European Community." In
Graham Room, ed., Towards a European Welfare
State? pp. 189-234. Bristol: SAUS.
Geddes, Andrew. 1995. "Immigrant and Ethnic Minorities and the EU's Democratic Deficit." Journal of
Common Market Studies 33, no. 2 (June), pp.
197-217.
Hamilton, Kimberly A., ed. 1996. Migration and the
New Europe. London: Frank Cass.
Hix, Simon. 1995. The 19961ntergovemmental Conference and the Future of the Third Pillar. Brussels:
CCME.
Immigration Law Practitioners' Association of the UK
(ILPA).1996. 1996: The 1ntergovemmental Conference on the Renegotiation of the European Union
Treaties. London: ILPA.

"Legislating Free Movement: An Over-Ambitious Commission Package?" (editorial). 1996. Common Market Law Review 33, pp. 1-5.
O'Keeffe, David. 1995. "Recasting the Third Pillar."
Common Market Law Review 32, pp. 893-920.

-Martin Baldwin-Edwards

Implementatlon
The extent of the implementation of EU treaty
commitrnents, laws, and policies has become a central political issue in the process of European inte-

271

gration since the beginning of the 1980s and the

launch of the single market prograrn. The debate
about implementation within EU institutions and
national governments, and arnong leading social
and economic actors, is a measure of the increasing
body of law with which they are expected to conform and of the claims on resources that these
obligations to the EU make upon them all. Differences in practice on the ground have also led to
some landmark judgments in the European Court of
Justice (BCI), several of which have grave1y embarrassed national governments and made dear the extent of the erosion of national sovereignty.
Concems over implementation can be said to
cover three broad areas: (1) transposition of EU
legislation into national law, whether by primary
or secondary legislation or changes in administrative practices; (2) application of EU law by relevant authorities; and (3) enforcement of EU law,
including penalties for noncompliance.
Responsibility for conforming with the legal
order of the EU varies according to the legal instruments deployed by EU institutions. Parts of
the treaty have direct effect (e.g., Artide 119 requires equal pay for equal work), in which case it
is the duty of all individuals to conform with EU
law without further govemment intervention.
Many of the most developed policies of the EU,
however, have been put in place by means of directives that instruct the member states to deliver
certain EU-wide agreed-upon policy objectives
within a certain time limit, leaving to the discretion of the states the means by which the objectives may be achieved.
The Commission has oversight of all implementation issues in the EU and has direct responsibility for day-to-day administration of some policy areas (e.g., agriculture, fisheries protection,
trade, competition, and structural funds). The
Commission has the right to take up specific cases
of suspected nonimplementation of EU law with
individuals, organizations, and govemments and
may use the EU's legal machinery to secure redress. Many aspects of existing EU policy are
overseen for implementation purposes by management, regulatory, or advisory committees, variably
composed of representatives or officials from all
over the Union (a procedure known as comitology). Other implementation duties may be given
to specialist agencies, such as the European
Agency for the Evaluation of Medicinal Products

272

Implementation

in London, the European Environment Agency in

Copenhagen, and the European Police Office in
The Hague. National governments also have the
prime responsibility for the effective implementation of directives, other policies delegated to them
by the EU (e.g., collection of customs duties), and
obligations arising from accession to the various
treaties founding the EU. National courts, the
ECJ, and its companion court, the Court of First
Instance, all have duties to interpret and apply
treaty principles, and EU legislation in particular
cases, as part of the irnplementation process.
The first stage of implementation is usually
transposition of EU law into national law, where
this is required, or into national, regional, or local
administrative practice. The Commission scrutinizes carefully the steps taken by national govemments to effect such transposition and, if dissatisfied, may issue formal "reasoned opinions" to
governments before referring cases to the courts
(Article 169). A few countries, particularly Italy,
have become notorious for not transposing legislation within the time limits set by the EU. Many
states also make errors in transposition that may
be identified by the Commission or as a result of
case law. The Commission is particularly wary of
transposition by administrative circulars in member states, which may be altered at will, rather
than by primary or secondary legislation. Three
years after the planned completion of the single
market on January 1, 1993, the Commission found
that transposition of the relevant measures into national law was almost complete in Denmark and
the Netherlands, but only 90 percent complete in
Germany and Belgium.
The application of treaty principles and legislation is most commonly, in the first instance, the
responsibility of the member states, whose govemments may themselves devolve this responsibility to regional or local govemments, nationalized industries, or parastate agencies. There are
great differences among the member states in the
precise allocation of such roles between public
bodies. The EU looks to the govemments of the
member states to ensure that European rules are
applied correctly in their territory and can and
does take national govemments to the ECJ as a
last resort: annually the Commission refers approximately eighty such cases to the Court. Within
each member state, government agencies and privatized or public utilities and companies are expected to apply EU rules regardless of whether

they are specifically enjoined to do so by national

governments.
European law is applied by the national
courts where legal issues have already been decided under previous case law. Where there is
doubt about the interpretation of European law in
particular cases, the national courts may use the
provisions of Article 177 of the Rome treaty to
seek a preliminary ruling from the ECJ before
making a definitive legal judgement. Approximately 250 such requests are made annually to the
Luxembourg-based courts.
Although the Commission oversees the application of EU law in the member states and across
the EU generally, it does not normally have the
means to check outside those areas of responsibility that are under its direct control. Exceptions to
this are starting to emerge as a result of instances
of fraud, which have been increasingly highlighted by the Court of Auditors in the 1990s.
More usually, the Commission relies upon complaints and information received from outside
agents (individuals, interest groups, press reports,
and national governments) before mounting an investigation of possible noncompliance with EU
rules. In addition, in many policy areas national
governments are required by EU law to submit periodie reports to the Commission about their experience in applying particular legislation, but the
quality of such reports is variable and the information is often very late in arriving.
The enforcement of EU rules is thus the
shared responsibility of EU, national, regional, and
local governmental institutions: the precise configuration varying according to each state's law and
custom. The enforcing agents (such as the police,
customs officials, immigration officers, and environmental, transport, and labor inspectors) usually
have a variety of functions to exercise, only some
of which derive from EU legislation. The capacity
of such agencies to enforce EU rules depends upon
the availability of resources provided by national,
local, or regional authorities and upon the policy
priorities decided within each agency or by other
policymakers in the member states.
Penalties for noncompliance are set by the
member states in accordance with national norms
and traditions, except for policies directly administered by the Commission. The Commission may
irnpose fines for breaches of EU competition policy amounting to up to 10 percent of the tumover
of the offending company. The ECJ is increasingly

Implementation
seeking penalties that are proportionate, dissuasive, and appropriate for specific breaches of EU
law. The Council of Ministers is becoming more
aware of the need for greater harmonization of
penalties and sanctions on the grounds of fairness
and the removal of cross-border distortions. Article
171 of the Treaty on European Union also perrnits
the ECJ, on the recommendation of the Comrnission, to fine member states for nonimplementation
of EU law. Spain and Italy were fined heavily in
1994 for nonimplementation of the milk quota
regime. Individuals, following the Franeovieh
judgment of 1991, may also be able successfully to
claim damages from governments in the member
states that do not implement EU directives.
Variable implementation of EU rules can have
a marked impact on the efficacy of agreed-upon
policies and a significant distorting effect on the
single market in practice. This has occurred in areas of regulatory policy such as environmental
standards and workplace health and safety measures, in which significant cost savings as a result
of noncompliance can give competitive advantages
to firms based in noncomplying member states.
This variability of application and enforcement of EU rules has led to pressure to set up specialist agencies monitoring the practical impacts
of EU policies (such as the European Environment
Agency) and to the increasingly detailed nature of
Union directives, in an effort to minimize significant national variations in the implementation of
EU laws.
Among the least weIl implemented EU laws
have been the Wild Birds directive (1979), several
water quality directives, the Environmental Impact Assessment directive (1985), public procurement directives, rules governing the creation of
new national technical standards, and regulations
limiting the working hours of commercial truck
drivers. The Commission started 1,138 infringement proceedings in 1996 concerning possible
cases of noncompliance with EU rules.
The reasons for poor implementation of
treaty and legal requirements are manifold. Part of
the problem is the quality of legislation itself,
which sometimes is not thought through weIl
enough or is poorly translated or which may be illadapted to national legal traditions. Member states
may lack the technical or administrative capacity
to apply EU rules, or they may have real problems
securing adequate financial resources, parliamentary approval, or the support of public opinion for

273

the measures. Inadequate consultation with interested parties or with the relevant enforcement
agencies before adoption of EU legislation, in particular in federal states, often causes subsequent
problems and de1ays in implementation.
Difficulties may arise when an individual or
company in one member state seeks to assert rights
under EU law in another member state. Arecent
alternative to starting cross-border legal action is to
seek redress through "administrative cooperation"
mechanisms using a network of contacts in relevant government departments in each state.
Implementation problems highlighted by political institutions and socioeconomic interests
have become an integral part of policy evaluation
by the EU authorities. The separation of the rulemaking parts of government from those that are
responsible for and pay for the administrative
costs of rule implementation has become a major
issue for several states, especially the poorer ones.
Since 1992, the cohesion fund has been able to
contribute to the costs of implementing EU environmental standards in Spain, Portugal, Greece,
and Ireland.
The effective delivery of existing policies is
now the central concern of the Comrnission in regard to the single market and the environment.
The prospect of adding several less economically
developed new member states to the EU at the
start of the twenty-first century is reinforcing the
ambition of EU officials to consolidate the gains
secured for integration around the agenda of effective implementation. In this they are supported by
a wide variety of political, social, and economic
actors.
Political scientists speculate whether this new
emphasis on effective and even implementation of
EU policies represents a major constraint upon the
sovereignty of the nation state. Also open to question is whether traditional "top-down" or "bottomup" models of implementation apply in a complex
hierarchy of governance such as the EU or
whether analysis centered on multilevel bargaining and policy networks is more appropriate.
See also COMMIS SI ON; EUROPEAN COURT OF
JUSTICE; SINGLE MARKET PROORAM.

Bib/iography

Majone, Giandominico, ed. 1996. Regulating Europe.

London: Routledge.

-Allen Butt Philip

274

IMPs

IMPs
See INrEGRATED MEDITERRANEAN PROGRAMS.

Industrlal Pollcy
Industrial policy can be defined as the wide range
of govemment actions designed to promote
growth and increase the competitiveness of a particular sector or sectors in an economy. Since such
actions imply preferential treatment, it is logical to
add to the definition the conditions that other sectors benefit indirectly from the support given to
the targeted sectors and that none of them be damaged by the policy actions.
Traditional industrial policy instruments include macroeconomic and tax policies, subsidies,
govemment procurement pro grams, support to research and development (R&D), procedures for
elaborating technical standards, education and infrastructure improvement programs, favorable antitrust regimes, export assistance, and foreign
trade and investment policies.
A benign or laissez-faire industrial policy is
characterized by a primary emphasis on achieving
a stable and predictable macroeconomic environment for industry, investing in infrastructure and
human capital, avoiding the practice of "picking
winners," maintaining open trade and foreign investment policies, using procompetitive antitrust
regimes, and supporting R&D at the precompetitive level (basic research and applied research up
to the construction of a noncommercial prototype).
Aggressive or dirigiste industrial policies
range from the Soviet-style command economy,
which seeks to make virtually all of the decisions
governing economic transactions, to the indicative
planning model of France and Japan, which is
based on industry-govemment consensus. Elements of dirigiste policy include targeting of specific sectors through favorable tax, procurement,
subsidy, and trade policies; R&D support that
tends to go beyond the precompetitive stage; and
antitrust policies that restrict competition.
Many nations pursue differing mixes of dirigiste and laissez-faire policies at different stages
in their histories. In the United States, which considers itself a market-oriented non--central planning economy, vigorous military procurement
programs in the 1950s and 1960s provided great
stimulus to the computer and commercial aircraft
industries. In Japan, the directions of a strong cen-

tral planning apparatus did not shape the eventual

multifirm structure of the automobile industry. In
Europe, national industrial policies have fluctuated in response to economic conditions, resulting
in a wide range of practices from Thatcherite noninterventionism to the highly dirigiste policies of
France in the 1960s.
A growing body of research demonstrates
that even though political and cultural values are
important in explaining why one nation's industrial policy has evolved differently from others,
situational factors (level of economic development; institutional, financial, and legal structure;
resource endowment; and business outlook) are
equally important. Nations in the "catch-up" stage
of economic development tend to pursue more interventionist industrial policies than fully developed nations. Another key predictive element is
the nature of the business-govemment relationship, which can range from adversarial, as in
Britain of the Thatcher period, to highly corporatist, as in France and Germany. Both the situational variables and the relationship variable explain to a considerable degree the evolution of a
Europe-wide industrial policy.
Phases of EU Industrial Policy
Industrial policy at the EU level has gone through
several phases since the Treaty of Rome came into
effect in 1958. The treaty itself did not call for a
strong collective industrial policy but left the right
to pick winners to the member states. The treaty
laid the groundwork for the future expansion of a
community-wide policy by setting forth the vision
of a single market govemed by a competition policy (Articles 85, 86, 92-94) designed to avoid the
negative aspects of dirigisme.
Unilateralism and collaboration (1958-

7975). In the twenty years following the Rome

treaty, Europe-wide industrial policy was not a
subject of debate. Member states were free to follow the industrial policy of their choice. The move
from customs union (achieved in 1968) to single
market was de1ayed by the failure to move from
the unanimity rule to majority voting in the Council of Ministers. As a result, the legislation that
would have created the single market and accentuated the need for a common European industrial
policy languished for years. National industrial
policies in this period were determined by cultural
and situational values. France and Germany, galvanized by the threat of U.S. dominance of high-

Industrial Policy

technology sectors, began to nurture national

champions through subsidies, supportive government procurement policies, national quotas, and
nontariff barriers. During this period, European
countries began important collaborative projects
in aviation (Concorde and Airbus) with the aid of
extensive national govemrnent subsidies that supported product development and even production.
In the UK, the Labour govemrnent feIt the need to
establish aNational Economic Development Organization designed to improve the competitiveness of British industry.
Intervention ist industrial policy (19757985). Following the oil shock of 1973, European industry was plunged into a ten-year nightmare of stagnation, inflation, and unemployment.
It was during this period of so-called Eurosderosis that the Community intervened with specific
industrial policy actions designed to complement
member-state efforts to return national champions
to growth and prosperity. These actions induded
attempts to resuscitate the failing steel, chemicals,
and shipbuilding industries with subsidies to ease
the pain of downsizing, modernization, and restructuring. The Commission also used its competence to conduct trade policy to negotiate bilateral
agreements restricting developing country exports
of textiles to the Community. In high-technology
sectors such as electronics and telecommunications, the Community, which had already established a new Directorate General for Industrial Affairs (DG III) in the Commission, began to
provide funding for cooperative R&D projects.
Beginning of the single market and economic recovery (7985-7990). In the early 1980s,
Industry Commissioner Etienne Davignon convened a group of European manufacturers in the
so-called European Round Table of Industrialists
(ERT) to discuss Community support for crossborder industrial collaboration. European industrialleaders, aware that national industrial policies
were failing to develop globally competitive firms,
sought help from the Community in developing
"European champions." Over time, the group was
skillfully channe1ed from a lobbying effort to increase community aid for R&D projects to a powerful force for implementation of the dormant single market concept. Encouraged by pressure from
business, the Commission made a final deterrnined
effort to launch the single market. The white paper
of 1985 outhned the three hundred or so minimum
legal steps needed to ensure freedom of passage of

275

goods, services, peop1e, and capital throughout the

Community. By cal1ing for the deregulation of restrictive national rules governing trade, the single
market program sought to expose European industry to market forces. The resulting competition was
expected to force consolidation and achieve
economies of scale, thereby improving competitiveness. The policy was designed to develop European champions rather than national champions. In
order for this bo1d design to succeed, a major
change in the Treaty of Rome was necessary. Accordingly, the Single European Act (SEA) changed
the rules to allow for majority voting on most of
the single market legislation, much of which had
already been drafted but had not passed when subject to unanimity. The SEA blessed the white paper
and set a deadline for implementation of December
31, 1992. It also committed the Community to
strengthen the EC's scientific and technological
base through multiannual "framework programs."
Much of the proposed single market legislation
was adopted by 1990. At the same time, the Commission made it dear that national subsidies (state
aids) to dedining industries would be reviewed
vigorously; those not meeting the Treaty of Rome
criteria would be weeded out.
The debate over Europeon industrial policy
(7990 to the present). By 1990, it was dear that
Europe had emerged from recession and that the
single market program, combined with a vigorous
competition policy, was proving to be a powerful
supply-side industrial policy tool. These developments polarized thinking about the shape of a future industrial policy for Europe that would prolong the current period of economic expansion.
Powerful forces in Europe (especially the ERT)
were advocating continued support from either the
Community or member states for strategic sectors.
Arrayed against them were those arguing for further deregulation and supply-side policies and a
completely hands-off industrial policy. In an attempt to resolve the debate by determining the
causes of the economic recovery, the Commis si on
identified several factors. Fairly consistent and
mutually supporting fiscal and economic policies
between 1985 and 1990 had reduced inflation, increased returns on investment and profits, and
stimulated employment. In addition, the single
market effort to dismantle barriers was a powerful
positive stimulant to business.
After listening to both sides of the debate, the
Commission set forth its views (Commission, 1990)

276

Industrial Policy

on the European industrial policy of the future,

which it identified as neither top-down and dirigiste
nor laissez-faire. The Commission saw no place for
central planning in the new policy and pledged to
follow the principle of subsidiarity (regulating at the
lowest possible level of govemrnent). The Commission identified four challenges to EC industry: globalization, the rising cost of labor and capital, the
need to diffuse technological innovation, and the
importance of human capital improvement. The
Commission also identified five prerequisites for an
industrial policy to assure continued industrial
growth: securing a competitive environment (avoiding excessive concentration and unfair subsidies),
following stability-oriented and predictable macroeconomic policies, promoting continuous human
capital formation, promoting economic convergence and greater sodal cohesion, and achieving a
high level of environmental protection.
The 1990 report then listed the catalysts
needed to promote change. First was completion
of the single market by means of elaboration of
Europe-wide product standards, full implementation of the directives liberalizing govemrnent procurement, abolition of all restrictive national quotas, provision of a coherent legal frarnework for
business, and development of trans-European networks in energy, transport, and telecommunications. The single market was seen as the most irnportant industrial policy too1. The second catalyst
was pursuit of an open but vigilant trade policy
based on enforcement of international roles.
Policies to help improve European competitiveness include promotion of R&D and innovation in a way that creates the environment for bottom-up prograrns, rapid transfer of know-how and
improved training prograrns, prograrns tailored to
small and medium-sized enterprises, better use of
human resources, and an open market for business
services.
The Treaty on European Union reaffumed the
EU's ability to supplement member state industrial polieies but maintained limits on the initiation of industrial policy by requiring a unanimous
vote in the Council for specific policy measures.
The Commission's 1993 white paper, Growth,
Competitiveness, and Employment, stressed the
importance of laying the foundations for the information society and developing multinational infrastructure networks in achieving competitiveness. A
subsequent industrial policy paper (Commission,
1994) reaffumed the horizontal approach to indus-

trial policy supported by targeted prograrns to support research and training, aggressive competition
policy, and a rigorous and neutral approach to state
aid. In 1995, the. Commission established a Competitiveness Advisory Group made up of industrialists, academics, and former po1itica1 leaders,
charged with preparing semiannual reports on the
current state of competitiveness.
The Reality of European Industrial Policy

The 1990 statement suggested that the Comrnission had made a 180-degree change in po1icy, rejecting sectoral intervention in favor of open competition. In spite of the references to subsidiarity,
the new policy sharply limited the scope of national industrial policies. As one ob server described it, the policy reflects amiddie way between a philosophy of emphasis on equity
(regulation of markets to protect a range of interests) and efficiency (an unfettered, integrated market) (Gaster, 1992). This view is reinforced by an
analysis of EU trade and foreign investment policy since 1990. There is evidence that, at the urging of business interests, the EU has continued to
support strategie sectors (such as electronics)
through an amalgam of active industrial policy
prograrns, especially support for R&D, and vigorous Comrnission use of trade policy too1s such as
the antidumping regime, high tariffs on semiconductors, and roles of origin provisions. Such a
strategic trade policy for e1ectronics has allowed
Europe, unlike the United States, to retain sizable
semiconductor, computer, and consumer electronics production capability. Much of the most efficient production capacity is supplied by Japanese,
U.S., and Korean firrns that found it necessary to
set up plants in Europe to get around trade barriers. Despite DG urs strong position, the Community has also applied its state aids po1icy somewhat selectively since 1990, occasionally allowing
member states to bail out weak national airlines,
steel mills, auto producers, and shipyards.
The Commission's "middle way" industrial
po1icy has had mixed results. Economic growth is
returning to Europe after the widespread recession
of the mid-1990s, but unemployment still persists
at double digit levels. Member states are dragging
their feet on implementing some of the key industrial policy elements of the single market. The current policy was formed as a result of the perceived
need of industries and their national governments
to become world-class competitors. The interac-

Infringement Procedures

tion between European business and the Commission greatly influenced the creation of a policy tailored to meet efficiency needs (the single market
program) but also to give European industry a fair
chance (in the form of trade protection) to catch
up. It is too early to tell whether this policy will
survive the econornic fluctuations and political
changes of the future.
See also EUROPEAN ROUND TABLE OF INDUSTRIALISTS; SINGLE MARKET PROGRAM.
Bibliography
Comrnission. 1990. Industrial Policy in an Open and
Competitive Environment: Guidelines for a Community Approach. COM(90)566 Final. Luxembourg:

Office for Official Publications of the European

Communities.
- - - . 1994. An Industrial Competitiveness Policy for
the European Union. COM(94)319 Final. Luxembourg: Office for Official Publications of the European Communities.
Devine, P., Y. Katsoulacos, and R. Sugden. 1996. Competitiveness, Subsidiarity, and Industrial Policy. Lon-

don: Pinter.
Gaster, Robin. 1992. Industrial Policy in Europe and the

United States: Competition and Cooperation in the

Study Papers Submitted to the Subcomrnittee

on Europe and the Middle East of the Comrnittee on
Foreign Affairs of the V.S. House of Representatives. Washington, DC: U.S. Govemment Printing
Office.
1990s.

-Anthony Wallace

Industrlal Research and

Development Advlsory
Commlttee (IRDAC)
This consultative group, made up of industry and
union representatives, advises the Commission on
the practical application of the EU's research and
technological development policy.
See also RESEARCH AND TECHNOLOGICAL DEVELOPMENT POLICY.

Information Soclety
The information society is the more genteeI European term for what Americans call the information
superhighway. Like the United States and other developed countries, the Commission and the member states are trying to come to terms with recent,
ongoing technological changes that have revolutionized the quantity and availability of informa-

277

tion, notably through the Internet. In its 1993 white

paper, Growth, Competitiveness, and Employment,
the Commission identified the information society
and the telecommunications networks that would
bring it about as one of the main avenues for leading Europe into the twenty-first century. Sirnilarly,
in its various pronouncements on education, the
Commission has stressed the importance of student
and teacher access to, and farniliarity with, the information society. In February 1994 the Commission showcased its interest in the social and economic implications of the information society by
hosting a G7 ministerial conference on the subject.
Soon afterward, in July 1994, the Commission produced a strategy and aseries of measures designed
to integrate the EU into the information society.
More than two years later, in November 1996, the
Commission attempted to sharpen thls strategy, although the nature of its four priorities-improving
the economic environment, investing in the future,
putting people first, and establishing global rulessuggest that the Commission is still groping for a
precise approach. However, in at least one irnportant respect the information society has had a
marked impact on EU public policy: fear of falling
behind in the global information revolution has
given the EU a powerful impetus to hasten the liberalization of telecommunications, a key element
in the rapid development and exploitation of the information society.
See also TELECOMMUNICATIONS POLICY.

Infrlngement Procedures
The Commission is responsible for ensuring that
member states fulfill their EU obligations and may
take infringement cases before the European Court
of Justice (ECJ) if it suspects a violation of EC law
(Articles 169 and 170 of the EEC Treaty). The
Commission may become aware of a possible infringement for any number of reasons: an individual, an enterprise, or another member state may
complain, or an investigation by Commission officials could uncover possible violations. If the Commission decides to act, it first sends a "letter of formal notice" requesting the member state concemed
to explain the alleged breach. The Commission
generates approxirnately 1,100 letters of notice annually. The member state then has about two
months to reply. If the member state fails to reply or
does not provide a satisfactory explanation, the
Commission issues a "reasoned opinion" outlining

278

Inner (are

why it considers the member state to be in violation

of the treaty. The Commission issued 433 reasoned
opinions in 1996, more than double the number
(192) it issued in 1995. Again, the Commission
usually gives the member state two months to comply. Most cases end with a letter of notice or a reasoned opinion. The Commission referred 93 cases
to the ECJ in 1996 (up from 72 in 1995). The
breakdown by country was as follows: Belgium,
20; Greece, 17; France, 11; Germany, 9; Italy, 9;
Spain, 9; Portugal, 6; Ireland, 4; Luxembourg, 4;
Netherlands, 2; Austria, 1; and the UK, 1. The
Treaty on European Union gave the ECJ authority
to order fines against states in infringement cases.
See also COMMISSION; EUROPEAN COURT OF
JUSTICE; IMPLEMENTATION.

Inner Core
See DIFFERENTIATED INTEGRATION; HARD CORE.

Integrated Medlterranean
Programs (IMPs)
Integrated Mediterranean Programs were a form
of regional econornic assistance launched by the
EC in 1986, at the time of Spain's and Portugal's
accession, largely in response to Greek demands.
The programs were supported by the European Investment Bank.
See also MEDITERRANEAN POLICY.

Integration Theory
Thousands of works theoretically analyzing econornic and political integration in Europe have
been published over the past forty years. This survey is lirnited to a representative sampie of theoretical contributions to broad explanations of the
political dynarnics of European integration, with
attention to empirical confirmation. Specialized
econornic, legal, technical, and policy literatures
are left aside, though much of the research cited
here reflects this work. The topics covered in this
entry are c1assical theories of regional integration,
the foundations of modern theories of regional integration, theories of major interstate decisions,
and theories of everyday policymaking.

C1assical Theories of Regional Integration

Classical theories of integration emerged to justify
the use of and explain the success of particular po-

litical strategies for regional integration. None is a

theory in the modern sense: a coherent set of
causal mechanisms based on a set of explicit,
comprehensive assumptions. Instead these theories resemble ideal-typical trajectories toward political integration and possible strategies for realizing them (Pentland, 1981). Nonetheless, they
remain touchstones for theory and activism. The
four theories presented here are federalism, functionalism, Karl Deutsch's "security community"
approach, and neofunctionalism (NP).
Federalism. Federalism is a theory of integration developed during the first half of this century.
It is associated with Count Richard CoudenhoveKalergi, Altiero Spinelli, numerous wartime resistance groups, and many democratic leaders in the
immediate postwar period, followed by a number
of more recent writers (Spinelli, 1966; Stirk,
1989; Pentland 1973; O'Neill, 1996). In the federalist view, the inception of which owed much to
the inspiration of the League of Nations, the major
challenge facing modern European nations is the
suppression of war, the major causes of which are
essentially ideological: nationalism, undemocratic
ideologies, and excessive attachment to national
sovereignty. Regional integration can help overcome these problems.
Efforts to promote integration are likely to be
most successful, so federalists argue, if they focus
on ideological persuasion and international institution building. Postwar federalists proposed the
conversion of public opinion to the European ideal
through education and transnational citizen exchanges, as well as international legal integration
through democratic institutions, particularly international courts and parliaments. Federalist ideology underlay the postwar European movement
and the Council of Europe, founded in 1948, with
its European Convention for the Protection of Human Rights and Fundamental Freedoms. Though
federalism lost influence thereafter, federalists
continued their criticism, which emanated particularly from the European Parliament (EP), of the
more pragmatic, econornic strategy of integration
adopted by the EC, which they held to be a futile
means of achieving true political integration.
Functionalism. Widely espoused through the
1950s, functionalism is associated with David Mitrany and Lionel Robbins as well as many international technocrats of the interwar and immediate
postwar period and a steady stream of subsequent
writers (Pentland, 1981; Mitrany, 1966; Groom

Integration Theory

and Taylor, 1975). Mitrany's view, patterned on

the New Deal and other interwar experiments in
govemment intervention, is most developed. Regional institutions, functionalists argue, grow out
of the common need for technocratic management
of economic and social policy, which leads to the
formation of international agencies. Such agencies
promote economic welfare, thus eventually gaining legitimacy, overcoming ideological opposition
to strong international institutions, and in the long
run evolving into a sort of international government, though perhaps not a true state.
"Security community. " Two attempts to develop more dynamic theories of integration synthesizing federalism and functionalism were advanced by social scientists during the 1950s. In his
"security community" approach, drawn from an
analysis of previous efforts at nation-state-building, Karl Deutsch proposed that modernization
leads to increasing levels of social interaction and
communication, which in turn causes convergence
of individual and group values toward more cosmopolitan norms, eventually leading (at least
among modem, democratic governments) to the
formation of a security community, in which no
state poses a threat to any other (Deutsch, 1954,
1957). The Deutschian model did not generate a
long-term following among theorists or activists,
largely because its political predictions seemed
vague. Since its basic dynarnic results from social
interaction, the precise institutional and political
predictions remained secondary. Later studies,
moreover, found little correlation between value
change and political outcomes. Even so, the
metaphor continues to be powerfully evocative,
resulting in descriptions of the EU as a "multi-perspectival polity" or a "security community."
Neofunctionalism. A second attempt at a
federal-functional synthesis, ultimately more influential for the study of integration, was NF, first
advanced by Ernst Haas in the late 1950s and
deepened by others (Haas, 1958; Lindberg and
Scheingold, 1970; Nye, 1971). Haas, whose reasoning constituted, among other things, a social
scientific account of the sort of engrenage tactics
pursued by Jean Monnet at the time, argued that a
sui generis "theory of regional integration"-that
is, a distinct theory of the formation of international political communities-is possible on the
basis of the assumption that the forces moving integration forward are endogenous and self-reinforcing (Pentland, 1973).

279

The critical explanatory hypotheses of NF focus on the unintended or unexpected feedback of

previous integration decisions, termed "spillover."
For Haas, the precise reasons for initiating economic integration, often geopolitical, are relatively unimportant. Once economic integration is
launched, however, spillover tends to create two
types of pressure for an expansion in the scope or
intensity of integration. In economic spillover, social groups demand further economic integration
in order to preserve or extend existing gains. In
political spillover, integration creates new transnational and supranational actors, who tend on balance to favor greater integration and are advantageously placed to engineer it. Haas wrote in the
era of "the end of ideology" and, like the functionalists, assumed that among modem welfare states
rational economic management was a priority requiring centralized, technocratic, relatively apolitical administration. He argued, at least initially,
that spillover was relatively automatic, at least
where state intervention was important. Expectations and values eventually adapt to integration,
creating a transnational political community,
which in the end legitimates centralized regional
governance.
By the mid-1970s, however, the combination
of empirical disconfirmation and theoretical limitations led to the abandonment of NF as a unified
approach, even by proponents like Haas. Though
the deep structural variables highlighted by NF did
provide a plausible account of the relative success
of European integration compared to, say, similar
experiments in Central America, Africa, and other
areas, its strong predictions about the integration
process within Europe were not borne out. Rather
than spillover promoting deeper integration, in turn
creating press ures for the centralization of technocratic administration, during the 1960s and 1970s
outcomes across issues and countries varied. Some
areas regressed or stagnated while others were buffeted by outside factors foreign to NF, such as economic crisis, geopolitical values, and response to
global developments. Anomalies sprang up: integration tended to be most successful in areas where
govemments were liberalizing, such as the common market, not in areas where state intervention
was heavy, such as the production of atomic energy. Moreover, economic integration moved forward even though political integration was blocked
by French president Charles de Gaulle. In short, a
strong, even dominant, role for member states per-

280

Integration Theory

sisted in most areas, with little evidence of automatie spillover (Moravcsik, 1993).
Empirical anomalies reveal theoretical weakness. NF, it was agreed, relied on a teleological assumption of progress rather than deriving predictions from a general theory of how actors choose to
manage interdependence. Once it was aclrnowledged that spillover was not automatic-reflected
at the time in the introduction of concepts like
"spill back" and "dramatic-political actors"-NF
forfeited nearly all of its explanatory power. NF,
some concluded, had been overambitious, attempting to formulate a theory of dynamic, endogenous
feedback without a reliable theoretical foundation
explaining static state decisionmaking: how states
choose to manage economic interdependence,
based on consistent microfoundational assumptions about actors, preferences, and constraints. In
short, NF is inadequate not simply because simple
variants appear to be empirically disconfirmed but
because more sophisticated versions of it remain
indeterminate. Subsequently, Haas hirnself termed
NF a "pre-theory" of integration and called for
something new (Harrison, 1974).
Modern Theories of Regional Integration
By the mid-1970s, champions and critics of neofunctionalism alike agreed that an adequate explanation of integration must be (1) general, that is,
formulated in terms of generally applicable, microfoundationally grounded theories of state responses to interdependence; (2) choice theoretic,
that is, focused on variation in the choices of
states and societal groups for and against integration; and (3) multicausal, that is, employing more
than one theory to explain integration (Puchala,
1972; Sandholtz, 1992; Moravcsik, 1993). One
implication is that it is no longer appropriate to
speak of a single theory of regional integration.
The issue is instead what combination of theories
best contributes to an understanding of integration
and precisely how they should be synthesized into
a coherent account.
During the remainder of the 1970s and most
of the 1980s, despite a move toward greater recognition of the importance of national governments-termed intergovernmentalism-no comparable synthesis was developed to replace NP.
Less attention was paid to integration in general;
remaining theorists tended to focus on narrower
aspects of integration, including the role of technocratic and elite networks, domestic politics, na-

tionalleaders, comparative policy studies, and the

economies of monetary integration (Wallace, Wallace, and Webb, 1977; Bulmer, 1986; Taylor,
1983; Caporaso, 1974; Sasse et al., 1977).
Interest in broad integration theory arose
once again in the late 1980s, largely in order to explain the rejuvenation of the EC with the Single
European Act (SEA) and the Treaty on European
Union (TEU). Some scholars rethinking integration theory in this period drew on theories of foreign economic policy, interstate bargaining, and
international regime formation developed in the
preceding two decades to develop such an explanation. Such theories were quite different than the
"realist" theories prevailing twenty years before
but had internalized concern about political economy as weIl as much political analysis of pluralism, institutions, and power initially developed to
explain domestic societies. On this basis, Stanley
Hoffmann, Robert Keohane, Andrew Moravcsik,
Paul Taylor, Geoffrey Garrett, and others proposed
an essentially rationalist account of integration,
termed liberal intergovernmentalism (LI) (Keohane and Hoffmann, 1991; Moravcsik, 1991; Taylor, 1983; Garrett, 1993). LI was initially presented as a framework for synthesizing theories
into a coherent account of large EU decisions
taken under unanimity, though it can be applied to
other types of decisions as weIl.
LI divides EC decisionmaking into three
stages-preference formation, interstate bargaining, and institutional delegation-each of which is
explained by a different set of factors. Each of the
three elements must be theoretically specified.
Most variants of LI argue that national preferences
reflect the issue-specific press ures to manage economic interdependence, with geopolitical concerns playing a secondary role; bargaining outcomes reflect relative power stemming from the
nature and intensity of preferences, with supranational actors playing a secondary role; and institutional delegation reflects the desire for credible
commitments, with ideology and technocratic
considerations playing secondary roles (Moravcsik, 1993).
Theories of Major Interstate Decisions
This seetion presents specific theories of preferences, bargaining, and institutional choice, based
on the three-stage LI framework, and looks at historical institutionalism and the problem of implementation.

Integration Theory
National preference formation. What determines underlying national preferences for and
against policy coordination through integration?
The LI approach sees integration primarily as a
means of achieving issue-specific domestic goals.
Generally this is done by managing issue-specific
policy interdependence-that is, coordinating the
transnational externalities of national policies,
whether trade protection, competitive devaluation,
or foreign policy cooperation. Governments relatively vulnerable to negative externalities imposed
by the unilateral polieies of other governments
tend to favor integration, whereas relatively invulnerable governments have little reason to coordinate policy (Moravcsik, 1993). On the margin,
governments mayaiso employ integration as a
means to achieve goals otherwise impossible to
achieve through domestic political means
(Moravcsik, 1994). To this basicaHy pluralist
model of policymaking, one could add the role of
differential representative structures (Risse-Kappen, 1996).
LI explanations of specific decisions, such as
the SEA, must rest on a concrete specification of
preferences resulting from issue-specific patterns
of international interdependence-that is, the nature of domestic soeial demands and the pattern of
transnational policy externalities. Given that the
EC's core activities are largely economic, the assumption of issue speeifieity implies that national
preferences are grounded in political economy.
Governments engage in policy coordination either
to influence the economic externalities of the polieies conducted by foreign governments-in this
case, largely trade policy, trade-related regulatory
policy, or monetary policy--or to impose domestic reform seen as desirable to the maintenance of
international competitiveness. Externalities, and
therefore pressures for cooperation, arise when the
unilateral polieies chosen by one government inconvenience or benefit politicaHy significant social groups in other nations. In a zero-sum situation in which preferred policies are incompatible
or in a situation in which unilateral polieies can be
adjusted in a cost-effective way to counteract the
effects of external pressures, little incentive for
cooperation exists. Where preferred policies are
convergent or compatible, cooperation is more
likely-the preeise pressures depending on the
costs of adjustment.
In recent years, a large body of work has
emerged to explain national preferences on spe-

281

cific EU policies, most of it grounded in theories

of foreign economic policy. Support for tariff and
quota liberalization reflects the economic interests
of producer groups. Producers tend to seek liberalization that increases their relative competitiveness and oppose liberalization where they are uncompetitive. Patterns of intraindustry trade
facilitate liberalization as weH (Pelkmans, 1984;
Milward, 1992; Moravcsik, 1993). Agricultural
preferences of national producers for high support
prices are commensurate with national income.
Support for regulatory or social harmonization reflects a balance between producer group interests
and public demands for and prior levels of regulatory protection (Vogel, 1995; Leibfried and Pierson, 1996). Monetary policy balances producer interests, on the one hand, and general institutional
and partisan preferences for monetary discipline,
on the other hand. In these economic matters, issue-specific economic goals are supplemented by
geopolitical and ideological motivations only
where economic preferences are diffuse, uncertain, or weak. In monetary policy, important factors cited include the level of capital mobility, the
need for policy credibility, the international interests of producers, the nature of shocks, central
bank institutions, the party in power, and domestic
wage-bargaining institutions (Eichengreen, 1992;
Frieden, 1993; Garrett, 1995; Goodman, 1991).
There is general agreement that preferences in
monetary policy are more uncertain than preferences in trade policy (Giovannini, 1993). The constraints imposed by public opinion on integration
are being systematically explored (Eichenberg and
Dalton, 1993; Franklin et al., 1996).
Support for cooperation on traditional "high
politics" issues, such as foreign and defense policy cooperation, is similarly issue specific, reflecting the pattern of policy externalities, with economic interests secondary. Support for foreign and
defense policy cooperation, for example, tends to
be inversely proportional to the viability of unilateral foreign and defense policies. Ideological concerns about neutrality and Europe's position play
a secondary role.
Although theories focusing on the structural
issue-specific determinants of national preferences (externalities, interdependence) remain the
most logically developed and empirically confirmed, two major alternative approaches to explaining national preferences exist, both of which
stress the autonomous role of ideas. The first

282

Integration Theory

ideational alternative stresses distinctive national

ideas about geopolitics and harks back to the mid1960s, in the wake of de Gaulle's disruptive decisions. Leading critics of NF, led by Stanley Hoffmann, argued that the real determinants of
national preferences lay in geopolitical ideologies,
which, Hoffmann asserted, reflect in turn enduring
tendencies in national histories, cultures, and political beliefs (Hoffmann, 1966). In the context of
the 1960s, Hoffmann stressed in particular the
views of divergent European govemments vis-avis the superpowers and the desire to create a European third force, a view echoed in some historical treatments of the period. Others stress the role
of the European movement. Most recent analyses
stress ideological commitment to the Franco-German relationship and efforts to resolve the German problem (McCarthy, 1993; Picht and Wessels, 1990). In the strongest version of this view,
economic policies are mere1y means to geopolitical ends; in a weaker version, economic interests
dominate issues of "low politics" but are trumped
whenever "high politics" considerations arise.
Recent empirical evidence has cal1ed into
question the role of geopolitical ideo10gy. For instance, historical analyses suggest that Jean Monnet's "European movement" was re1atively unimportant, even counterproductive, after the early
1950s; that the European policies of British prime
minister Harold Macmillan and of de Gaulle were
driven primarily by economic interest, not geopolitics; and that national govemments were committed to the TEU and monetary integration even before German reunification raised geopolitical
issues (Milward, '1992). Yet there is important evidence of the importance, even if secondary, of
geopolitical ideology. Such considerations he1ped
transform general pressures favoring trade liberalization toward the particular solution of a relatively
small trading bloc with relatively strong central institutions. Geopolitical ideology has been particular1y decisive in influencing German policy from
chancellors Adenauer to Kohl. Recent economic
explanations argue that this is because German
governments enjoyed relatively wide autonomy,
given that economic interest groups would support
a re1atively broad set of policy alternatives
(Moravcsik, 1995).
The second ideational alternative stresses the
spread of policy ideas. One view is that EC institutions act as conduits for discourse and persuasion
among technocratic officials, resulting in the

spread of ideas (Majone, 1993a). Another view is

that govemments adopt po1icy ideas in areas in
which preferences are unc1ear, owing to the uncertainty in causal theories, by 1earning from apparent
success around them, one oft-cited example being
the long-term effort by France and, to a lesser extent, Italy to copy German macroeconomic policy
style (McNamara, 1997). A third view revives the
Deutschian argument that communication and interaction lead to the internalization of pro-EC
norms over time (Risse-Kappen, 1996). Such arguments are presented in more detail in the later section on everyday decisionmaking.
Interstate bargaining. Given a pattern of
state preferences, what factors shape the outcomes
of large interstate bargains within the EU? Despite
the evident importance of interstate bargaining,
c1assical integration theory until very recently offered few explicit analyses of it beyond the NF
view that supranational political entrepreneurs
help to "upgrade the common interest."
LI analyses of interstate bargaining rest on
three premises: unitary state action, low transaction
costs, and Nash bargaining dynarnics (Moravcsik,
1993). First, in international bargaining, EU govemments act, to a first approximation, "as if' they
were unitary actors. Although of course domestic
actors translate their disagreements to the international level, pursuing autonomous international
strategies where they can, this need not invalidate
the predictions of a unitary state approach if their
relative influence remains unaltered in the international setting and the decision comes down in the
end to aseries of state decisions incorporating domestic preferences in an orderly fashion.
Second, an LI analysis assurnes that the transaction costs of major interstate bargains are low,
relative to the resources and interests of member
states. This suggests that govemments can themselves provide the information necessary to bargain efficiently. Govemments use negotiations to
exchange information, to persuade one another to
realize "common interests" efficiently, and to institutionalize iterated bargains. Preexisting international institutions may help to promote such
agreement, although how much influence they
have in large decisions is an empirical question. In
short, states negotiate efficiently.
Third, following Nash bargaining theory, LI
predicts that the distribution of benefits in EU negotiations reflects the nature of unilateral and coalitional alternatives to agreement, inc1uding issue

Integration Theory
linkages and threats of exclusion and exit. The
more attractive the agreement, relative to the best
unilateral or coalitional alternative, the more a government is generally willing to compromise or exchange to achieve it. Bargaining outcomes are thus
decisively constrained by the most recalcitrant governments, though this does not, as some interpret
the argument, mean that they converge to the "lowest common denominator." All governments have
an incentive to compromise somewhat. Where a
threat of costly exclusion is credible, moreover,
governments may accept instead an agreement imposing absolute losses (Moravcsik, 1995).
An alternative view is proposed by those who
focus on the role of informal supranational entrepreneurship. A common criticism of LI is that the
Comrnission, the European Court of Justice (ECJ),
and the EP play an important role as informal political entrepreneurs in major negotiations, systematically manipulating the decisions of member states
in a way that "upgrades the common interest," despite their lack of any formal powers in such treatyamending negotiations. This approach harkens
back to the NF analysis of "political spillover" by
Haas and especially Lindberg, who stressed the role
of supranational officials, particularly in the Commission, in initiating new topics, advancing proposals, and mobilizing social actors. Sirnilar arguments
have been revived more recently by many authors
but have been taken furthest by Wayne Sandholtz,
who argues that such entrepreneurship is a "necessary" condition for agreement (Sandholtz and Zysman, 1989; Ross, 1995; Marks, 1993; Haas, 1958;
Lindberg, 1963; Sandholtz, 1992).
Predictions about the precise conditions under which informal supranational entrepreneurship is likely to be effective are scattered throughout the literature. Some argue that supranational
officials emerge from an activist political culture
(Ross, 1995), that highly technical issues are involved (Jachtenfuchs and Kohler-Koch, eds.,
1996), or that governments underrepresent or misrepresent potentially powerful, but systematically
unorganized or underrepresented societal interests, which can be activated through the provision
of information. Although a number of recent contributions question the extent and scope of effective supranational entrepreneurship, the theoretical and empirical debates continue (Alter and
Meunier-Aitsahalia, 1994; Moravcsik, 1995).
Institutional choice. Given a set of substantive agreements, why and under what conditions

283

do governments delegate sovereignty to supranational officials or pool it in arrangements for majority voting? Member governments have deliberately created an EU decisionrnaking structure that
requires each government to seek the approval of
its counterparts and sometimes of supranational
officials in order to promulgate a policy or even to
act unilaterally-though some of this may reflect
unintended consequences, discussed in more detail below. In short, many EU institutions are designed to restrict the legal sovereignty of member
governments, thereby limiting the foreign and domestic policies each may pursue.
What explains delegation and pooling? One
hypothesis is that governments have traditional
ideological comrnitrnents to various visions of Europe (Hoffmann, 1966). A second hypothesis,
which seems to explain many national positions,
is that many large-country governments prefer to
centralize power in the Council, where they enjoy
greater influence (Bulmer and Wessels, 1986). A
third hypothesis, consistent with NF, is that the
centralization of power and decisionmaking is
necessary for technocratic reasons, owing to the
high costs of coordination and information provision. A fourth hypothesis, drawn from regime theory, maintains that governments delegate and pool
sovereignty to assure the credibility of commitments. Strong institutions are most likely where
there is a strong common interest in cooperation,
yet a strong temptation to defect, requiring governments to "lock in" linkages and compromises.
Governments that favor particular substantive outcomes support appropriate institutions.
Empirical results are indecisive. Concern
about credible comrnitrnents offers a plausible explanation for delegation and pooling in cases like
the Common Agricultural Policy (CAP), Economic and Monetary Union (EMU), majority vting on single market issues, and legal enforcement
of EC law. It is less compelling than ideological
factors in explaining policy in areas where the
substantive implications remain unclear, such as
increased powers for the EP. There is good evidence that majority voting introduced by the SEA
perrnitted swifter passage of apparently more significant legislation, though it is worth noting also
that this did not result in a greater number of directives per year (Wesseis, 1996).
Historical institutionalism and the problem
of implementation. A few theorists have challenged the sort of explanations so far examined, in

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Integration Theory

particular LI accounts, by providing more rigorous microfoundations for arguments, resurrecting

the neofunctionalist argument that the process of
integration is dominated by unintended and
largely undesired consequences. Such "historical
institutionalist" or path-dependent theories of integration maintain that unintended consequences
are particularly likely where uncertainty is prevalent, discount rates are high, and preferences unstable and where policies draw large investments
from societal actors, rendering policy reversal
costly. Such arguments have been explicitly employed to explain some elements of large interstate bargains, for example, the precise form of
Britain's social policy opt out at the Maastricht
summit and the level of CAP prices. Yet most empirical arguments in this tradition are not directed
at large bargains. Instead, they are to be found in
the literatures reviving neofunctionalism to explain the importance of the ECJ, examining principal-agent problems in the EU, and analyzing the
"transformation of the state"-all of which are
considered in forthcoming sections of this entry.
Historical institutionalist theories place primary emphasis on the implementation of and societal response to major decisions rather than on the
decisions themselves. In order to develop more
precision, such theories require greater specification of unintended economic and political
spillovers, which would require closer attention to
two types of factors: those that drive socioeconomic responses to policy and those that lock in
institutional arrangements. Were such a theory to
emerge, it would be compatible with LI approaches; indeed, just as the theoretical power of
neofunctionalism required a firm grounding in static theories of state decisionmaking, in order to
know what feedback is important for decisionmaking, a historical institutionalist account must
turn to a fundamental LI theory.
Related to contemporary discussion of the
historical institutionalist approaches has been a recent focus on purported differences between explanations of European integration drawn from international relations and those drawn from
comparative politics, with the former seen as "rationalist" and the latter as "institutionalist," "normative," or otherwise distinctive (Hix, 1996). A
variant, heavily represented in the German literature, sees international relations theory as being
concerned with cooperation and negotiation,
whereas theories of domestic politics are con-

cerned primarily with the "problem-solving capability" of institutions (Jachtenfuchs and KohlerKoch, 1996).
Yet the invocation of competing subdisciplines is misleading (Hurrell and Menon, 1996).
The functional regime theory that forms the foundation for modem international political economy
is explicitly historical institutionalist (Keohane,
1983, 1984; Krasner, 1983; Hurrell, 1993),
whereas much contemporary comparative political economy as applied to the EC focuses almost
exclusive1y on material incentives (Frieden, 1993;
Milner, 1995; Rogowski, 1989). Similarly, international relations theory, as well as bargaining and
negotiation analysis, is centrally concerned with
the efficacy and efficiency of international cooperation, its "problem-solving capability," and integration with domestic politics, as well as distributional concerns (Keohane, 1984; Keohane and
Milner, 1996; Haas, 1989; Putnam, 1988). From a
broader perspective, the EC is best seen not as an
area of research in which international relations
and comparative politics clash but instead as an
area in which the breakdown of clear theoretical
boundaries between the study of comparative and
international politics has proceeded the furthest,
enriching both. This is particularly clear in research on everyday policymaking.
Theories of Everyday Policymaking
There is general agreement that everyday decisions must be analyzed differently than major EC
negotiations, because member-state decisions to
"de1egate" and "pool" sovereignty in EC institutions, as analyzed above, alter the constraints on
everyday decisionmaking (Keohane and Hoffmann, 1991). There are three closely related reasons for this. First, the decision mIes within which
govemments act, such as qualified majority voting, Commission initiative, EP participation, and
judicial oversight for consistency with the treaty,
constrain states, shifting their relative influence.
Second, where decision mIes explicitly delegate
authority to supranational actors other than the national delegations in the Council of Ministers,
such as Commission officials, members of the EP,
and ECJ judges, preferences of these actors must
often be considered. Third, institutions alter the
representation of societal interests to decisionmakers. Changes in decisionmaking autonomy of
supranational actors, timing and procedure of
mIes, flows of information, domestic constitu-

Integration Theory

tional rules, and the scope of decisionmaking all

directly and indirectly empower or obstruct social
actors. The resulting policymaking system--often
referred to as "multi-level," "multi-tier," "interIocking," "nonhierarchical" polity, or simply as a
"policy network"-is at least potentially more
complex and differentiated than that within national polities, requiring a distinctive analysis
crossing domestic and international lines (Jachtenfuchs and Kohler-Koch, eds., 1996; Marks,
1993; Risse-Kappen, 1996). There exist two broad
types of explanations of everyday decisionmaking: (I) LI models that focus on Nash bargaining
but acknowledge delegation and pooling of sovereignty, with the attendant agency problems; and
(2) "two-Ievel" models, which focus on changes in
domestic policymaking and social coalitions induced by integration and on the more complex
forms of policymaking that might emerge.
LI models of everyday decisionmaking: Nash
bargaining, win-sets, and agency problems. LI

models of everyday decisionmaking suggest that

governments pursue the same underlying preferences that they pursue in major negotiations,
though their strategies for doing so reflect different
institutional constraints. In the everyday legislative
process, as in major decisions, governments negotiate on the basis of win sets, preference intensity,
and alternatives to agreement, but the determination of bargaining outcomes is made more complex by the institutionalization of everyday decisions, which helps increase the credibility of
reciprocal comrnitments under conditions of uncertainty and iterated bargaining.
Institutional constraints are particularly relevant to everyday EU decisionmaking wherever
majority voting and Comrnission initiative are required. Under such circumstances, intergovernmentalists predict outcomes above the "lowest
common denominator" in a direction favored by a
qualified majority, the Comrnission, and perhaps
also (where it can exploit appropriate Council majorities) the EP. A formidable literature has grown
up explaining and predicting bargaining outcomes
on the basis of formally delegated powers as weIl
as the spatial distribution and intensity of preferences (Bueno de Mesquita and Stokman, 1994;
Tsebelis, 1994). Empirical tests confirm that governments with median positions should benefit
from cooperation, whereas outliers, particularly
negative preference outliers facing a majority
vote, are weakened. Explicit issue linkage appears

285

to be of secondary importance-though of course

majority voting itself is, in the LI view, a means of
formally inducing iterated linkage. The intergovernmentalist approach predicts in addition that
there will be considerable support for the activities
of the ECJ in enforcing comrnitments, something
that numerous studies have observed.
Many analyses invoke the "autonomous"
power of the Comrnission to explain the outcomes
of everyday policymaking (Heretier, 1996). Research and technological development policy is
one area of particular inquiry in which the Commission seems to have played an important "leadership" role (Sandholtz, 1992). Most recent research places these analyses in context, stressing
the predominant role of private, largely business
ac tors in setting the substantive agenda (Esser and
Noppe, 1996).
With numerous functions delegated to EU institutions, the theoretical question arises of the extent to which and the means by which governments can maintain control over the institutions
(Pollack, 1997). Here theories of delegation drawn
from the study of U.S. politics have proven useful
both to provide accounts of institutions such as
comitology (controls over delegated executive
powers of implementation) and to account for
variation in the power of the Comrnission. The basic insight is that the control of multiple principals
(the member states) over supranational agents is
imperfect. On this basis some have sought to explain striking differences between the relative autonomy of the ECJ and the more constrained role
of the Comrnission (Moravcsik, 1995).
At least three hypotheses concerning the influence of integration on domestic politics follow
from the LI view presented above. First, nationstates, whether in the form of judiciaries, executives, legislatures, or administrations, remain privileged representatives of domestic interests.
Despite the widespread prevalence of the theoretical concept of the EU as a unique "policy network" in which governance is nonhierarchical and
governments are only "one actor among many,"
there is in fact surprising consensus within the
empirical literature, especially among systematic
comparative analyses-even in areas like regional
and social policy, where strong claims have been
made-that the national governments remain the
most important actors in nearly all policy areas.
Second, consistent with the unitary state "as
if' assumption, domestic groups that are powerful

286

Integration Theory

in domestic policymaking (such as fanners, environmental groups, or socialist parties) tend to be

relatively powerful in European policymaking.
Support for this hypothesis appears to be the most
consistent empirical finding in the literature on regional policy, regulatory policy, and other areas.
Actors that are strongly entrenched, well-organized, and cohesive in domestic politics tend to act
effectively in European politics; those with little
influence over domestic affairs tend to do poorlythough Europeanization may exaggerate these differences (Marks, 1993; Risse-Kappen, 1996).
Third, insofar as integration does alter the domestic balance of power, it disproportionately
benefits those domestic groups with preferences
dosest to the EC median, whereas those with outlying preferences are more likely to find themselves in the minority, resulting in smaller gains or
indeed absolute losses. This hypothesis has yet to
be adequately tested.
Two-Ievel effects and the "transformation
of the state. 11 Recent scholarship has moved beyond these relatively simple LI hypotheses of the
domestic effects of cooperation, which might be
taken as a "baseline" for analysis. A wide range of
intriguing conjectures has been advanced concerning the varied ways in which EU policy processes
alter the relative influence and interests of domestic actors in civil society and the state-some with
deep implications for the normative and ideologicallegitimacy of integration.
Much of this theory, particularly that drawing
on the analysis of "policy networks," generates
fascinating results but in the end seeks to describe
the identity of the actors involved and patterns of
their activity, rather than to develop causal models
of their relative influence (Wessels, 1996; Mazey
and Richardson, 1993). Such studies tend to track
the number and size of interest groups or interadministrative interactions, but few do more than describe their possible influence and still fewer explain that influence. Here we focus primarilyon
explanations of influence.
Most theories of influence within the EU were
couched initially in terms of whether integration
had "strengthened" or "weakened" the "state." The
state does not mean the state as a whole but the executive or government. Weakeninglstrengthening
does not refer to the size of the total scope of the
state's discretion, or in "two-Ievel games" terminology, the size of the domestic "win set." Clearly integration often involves a narrowing of both de facto

and de jure national government discretion. Instead,

the dichotomy refers more precisely to increases or
decreases in the cost for the government of realizing desired domestic goals (e.g., an expansion of
the "win set" in the particular direction of ideal
point). Such an increase in the ability to achieve desired policies is of course often feasible only by
committing the country internationally to a reduction in overall discretion.
No theorist predicts unidirectional change in
the relative power of state and societal actors; all
concede and most seek to explain variation in the
relative power of domestic actors. Some speak of
a more open-ended "transformation of the state"
(Vernderung von Staatlichkeit) (Risse-Kappen,
1996). The resulting theoretical debates have generated a number of more broad-ranging hypotheses concerning changes induced by integration in
the domestic influence of state and societal actors,
the substantive scope of EU policy mix, and the
balance between deregulation and reregulation.
In part the divergence between strengthening
and weakening is simply a reflection of differing
assessments of economic interdependence. Those
who see governments as weakened stress the ways
in which higher levels of economic interdependence undermine the effectiveness of state intervention. Higher trade and capital flows, for exampIe, lead fmns to threaten to move to lower-cost
jurisdictions inside the EU, defeating efforts to
raise wages, regulation, and welfare benefits. Similar perverse effects are expected to follow policies that rely on the separation of markets. Those
who see governments as strengthened, by contrast,
stress the ways in which policy coordination creates net positive-sum benefits-for example,
greater economic growth, more export markets,
net financial transfers from the EU-that in turn
permit the exeeutive to deliver greater domestie
welfare. Some argue that the prosperity and production structure necessary to sustain the postwar
welfare state were sustainable only through international eoordination (Milward, 1992).
Divergent views of the strength of governments also refleet varying assumptions, eonjeetures, and theories about multilevel politics. One
set of predietions sterns from a resouree-based theory of politics. In this view, domestie actors benefit
when international eooperation generates net transfers of four domestie politieal resourees to them:
initiative (agenda eontrol), institutions (formal influenee over decisions), information (technieal and

Integration Theory

political), and ideas (control over legitimating

ideas). Where connection with the international
policy process reduces the cost for a domestic actor to manipulate the agenda position, decisions,
information, and legitimation of issues, that actor
is, ceteris paribus, strengthened-though this effeet may be offset by the loss of sovereignty imposed by a generally unfavorable position in international negotiations (Moravcsik, 1994).
Though in theory such induced shifts in influence can benefit any domestic actor, there could be
theoretical reasons why these shifts generally benefit sitting governments. Domestic constitutional
arrangements generally treat EU policymaking as a
matter not of domestic but of foreign policy, in
which executives enjoy a stronger initiating role,
re1atively autonomous decisional powers, direct
sources of information, and an unequaled ability to
link issues to legitimating ideologies, both "national" and "European." Executives exploit these
powers to construct international institutions that
"lock in" their institutional advantages.
Empirical studies suggest that many European
policies and practices-for example, the European
Monetary System, European summitry (the European Council), and the weak role of the EP-were
deliberately undertaken in such a way as to maintain and strengthen exeeutive autonomy. Cases of
the EU's serving as a scapegoat for national policies or being exploited as an efficient and legitimate
institutional means of achieving certain domestic
ends are widely cited through the literature, not
least recent efforts to impose fiscal austerity in
Italy, Belgium, and Germany. This resource-based
model helps explain institutional characteristics of
the EU, such as the acknowledged existence of a
democratic deficit-a situation in which EU policy
is perceived to be under less firm democratic control than domestic policy-which in this view is no
unintended consequence of integration but a deliberate strategy (Moravcsik, 1994).
The existence of considerable cross-issue and
cross-national variation is, however, wide1y acknowledged. It remains unclear whether the domestic gains for governments outweigh the extemal infringements on sovereignty and autonomy. Societal
actors, moreover, may now be slowly c1awing back
power ceded over the first four deeades of the integration process, as suggested by proposals for institutions empowering regions and national parliaments. Most important, not all changes in the
balance of initiative, institutional power, informa-

287

tion, and ideas favor exeeutives. Integration sometimes triggers a net transfer of initiative, institutional power, information, and ideological legitimacy in favor of other state or societal actors, for
example, autonomous technical ministries or
transnationally organized interest groups. In such
cases, the underlying theory would predict that the
domestic influence of such groups would increase,
thus reducing domestic govemability.
The most widely cited example of a "transformation of the state" in which executives are
weakened is the increasing constitutional power of
the ECJ (Burley and Mattli, 1993; Weiler, 1991).
The argument that the ECJ is a better case of neofunctionalist processes than the Commission is
now widely accepted. The success of the ECJ is
best explained by alliances between institutionally
insulated subnational and supranational actorsan approach that has gained wide acceptance as an
explanation for the unique development of the EU
legal system via Article 177 of the Treaty of
Rome. Recent efforts to construct an LI model of
legal integration that imposes more than extremely broad constraints remain empirically unsuccessful (Garrett, 1995). This is clearly a case in
which integration increased the domestic initiative, deeisionmaking autonomy, information, and
legitimate ideas in the hands of an actor other than
national governments, namely national courts.
Some have conjectured that legal integration develops in a symbiotic relationship with political
integration (Weiler, 1991).
Among those who maintain that governments
have consistently been weakened, some base their
analysis on different political theory. The EU, it is
argued, restricts the ability of governments to
manage domestic affairs, because supermajoritarian or unanimous decisionmaking institutions of
the EU make it more difficult for each government
not only to influence policy but also to pass or reform legislation-at least in areas in which only
the EU as a whole has the competence to legislate.
The result, some argue, is not only a diminished
sense of efficacy for each government individually
but also a tendency toward stagnation and
logrolling, which leads over time to suboptimal
collective policy outcomes-a common prediction
of the interlocking politics (Politikverfiechtung)
approach. High CAP prices are prominently cited
as an example (Scharpf, 1988; Sbragia, 1991).
This hypothesis, however, has been called into
question on empirical grounds. The most obvious

288

Integration Theory

reason is that there are very few cases in which

majority voting would have led to more "rational"
policies (Rieger, 1996). Scharpf himse1f doubts
whether this was actually true of the CAP
(Scharpf, 1988). It appears, moreover, that the unanimity rule was in fact exploited by Britain to limit
agricultural spending, not by supporters of high
spending to increase it. Finally, outsiders like Sweden and Switzerland maintained even higher agricultural subsidies. Important research nonetheless
continues in this area.
Another line of analysis maintains that EU institutions tend to encourage policies that are market
liberalizing in substance and regulatory in form
(Majone, 1993a). The EU's primary focus on market liberalization and regulatory harmonization has
given rise to a unique institutional division of labor
between the EU and its member states. The EU is a
"regulatory state"-that is, it governs by regulation
and judicial interpretation, not by taxation and
spending. Thus it plays a role somewhat analogous
to that played in the United States by independent
regulatory agencies backed by an active judiciary
and semiautonomous executive. Scholars of U.S.
politics term this complex an "independent fourth
branch of govemment" (Majone, 1993b).
In this view, the comparative advantages of
the EU policy process for regulatory governance
are its relative transparency, neutrality, and broad
scope, which insulate it from special interest pressures. Only groups with very strong and similar
interests across all member govemments-such as
multinational firms or wheat farmers--can "capture" EU policymaking. The result, according to
Majone, is a more efficient, technocratic mode of
decisionmaking better able to take account of the
"public interest"-that is, the interests of diffuse
constituencies like consumers. In this technocratic
view, national and EC policy styles are complementary (Majone, 1993a).
Many still think of the EU "regulatory state" as
essentially deregulatory, but this appears generally
not to be the case. In particular, it has not led, as
many once feared, to a "race to the bottom" in
which competitive pressures consistently erode regulatory standards. In fact, recent studies show that
in many areas of process regulation we also find
harmonization at relative1y high levels of regulation
(Majone, 1993a). More general analyses suggest a
middle position: most agreements in the environmental area appear to be at or close to the "lowest
common denominator," but there is little downward

pressure on regulatory standards over time (Golub,

1997). One reason is that firms in countries with
lower regulatory standards sometimes accept higher
regulations if these are required to secure entrance
into the domestic markets of richer countries-a dynamic that should theoretically apply to the regulation of products but not production processes (Vogel, 1995). A second reason, which may explain
process regulation, is the relatively high standard of
living throughout Europe, which means that publics
demand and govemments provide relatively high
levels of regulatory protection. A third reason is that
the EU facilitates "policy learning" among national
officials by transmitting information and policy
ideas to poorer countries when they reach the stage
of development at which higher regulatory protection is demanded. Some speculate that "epistemic
communities" of regulators constitute a powerful
force for policy convergence.
The regulatory nature of EU institutions
serves as the basis for yet another claim, namely
that the EU system systematically undermines redistributive fiscal policies favored by social democrats and prornotes fiscal retrenchment now favored by conservatives. The market-oriented
nature of the Treaty of Rome renders it nearly impossible for the ECJ to impute a global European
right to social we1fare or for the EU to pass social
welfare policies. It is disproportionately difficult,
moreover, for labor to organize. This veto-prone
system seems to explain the near total lack of social policies at the European level that have immediate redistributive consequences.
An alternative explanation for the lack of a social policy is sirnply that there is very little convergence of interest between rich and poor countries.
Insofar as there is such a consensus, it favors greater
privatization of pensions, budgetary austerity, and
labor flexibility, which are seen as necessary to
maintain social welfare systems over the long run.
Thus, if there is to be any EU cooperation on social
welfare, some argue, it is likely to be directed at
controlling, not facilitating, social spending. Certainly supporters of fiscal consolidation in countries
like ltaly and Belgium--countries with large govemment deficits or decentralized politics-favor
market integration and EMU as means of legitimating constraints on consumption and govemment
spending (Leibfried and Pierson, 1996).
See also DIFFERENTIATED INTEGRATION; EcoNOMIC INTEGRATION THEORY; FEDERALISM; REGULATORY POLICY.

Integration Theory
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Interest Groups

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-Andrew Moravcsik

Interest Groups
Actions by private and public interests playa central role in most accounts of European integration.
All accounts acknowledge the role of these interests, acting individually or collectively, as potentially influential players in "low politics" arenas.
In "high politics" arenas the contribution of interests is more disputed. High politics involve multiple arenas with multiple players, and political actors such as interest groups are just one of a
number of players. In low politics fields, interests
can, and do, shape public policy outcomes. In high
politics fields, interests contribute more to shaping
debate and the preferences of other political actors, although the most powerful Eurogroup, the
European Round Table of Industrialists (ERT), has
been credited with much of the impetus for the
single market initiative.
Interest representation arises through a
piethora of outlets, at national and transnational
levels of organization, using a variety of routes
and "voice" options. Outlets range from single
firms (of which around two hundred have their
own base in Brussels) to formal groups to forums
no more formal than a regular private dining club.
This diversity leads to differences in head counts
of the number of Eurogroups. The Commission
estimated at the end of the single market program
that there were "approximately 3,000 special interest groups of varying types in Brussels, with up
to 10,000 employees working in the lobbying sec-

291

tor" (Commission, 1992, p. 4). This means that

the number of personnel in the interest representation sector almost matches that of the Comrnission
itself if translation staff are excluded from the latter. However, directory sources of European-Ievel
groups indicate around seven hundred Eurogroups, of which two-thirds have a Brussels
base.
Business groups account for around twothirds of all Eurogroups, public interests (environmental, consumer, social, and citizen) one-fifth,
and the professions one-tenth, with the remainder
consisting of labor and consumer groups. These
interests have not simply responded to the development of EU competences. Two-thirds of all Eurogroups were established before 1980, and half
of those located in Brussels were present before
the single market period. The Comrnission, in particular, has played an important role in the development of these groups. Just over one-fifth are in
receipt of funding from the European institutions,
including 59 percent of all public interest groups
(Greenwood and Aspinwall, 1997). At one time,
the Commission maintained a policy of talking
only to European-Ievel groups. Although this soon
proved impractical, it demonstrates the importance placed by the Comrnission on the presence
of these actors. European-Ievel groups provide the
remote central institutions with a strategy to overcome the democratic deficit by putting them in
touch with grassroots opinion and the opportunity
to simplify their dialogue. The relatively small and
overloaded Comrnission has become reliant upon
the resources that these groups bring, including information and expertise, the ability to help carry
out European-level policies, and the ability of
these groups to influence their members. In the
early 1990s, the Comrnission reflected that it "has
always been an institution open to outside input.
The Comrnission believes this process to be fundamental to the development of its policies. This
dialogue has proved valuable to both the Comrnission and to interested outside parties. Comrnission
officials acknowledge the need for such outside
input and we1come it" (Comrnission, 1992, p. 3).
As predicted by neofunctionalist theory, the
Commission has also seen interest groups as a
means of expanding the EU's competence by encouraging member states to pursue Europeanlevel solutions and of protecting achievements in
integration. In producer domains this is now al-

292

Interest Groups

most a historic process, but in social fields it has

been possible to witness these developments in
very recent years. For instance, in recognition of
its lack of competence in the housing field, the
Commission established a conference on homelessness with the quite deliberate intention of the
establishment of a Eurogroup that would seek the
development of EU competence in that regard. A
group called the European Federation of National
Organizations Working with the Homeless
(FEANTSA) emerged from the conference; the
Commission has sought to sustain FEANTSA by
giving it funds for "observatory" (information collection and dissemination) functions. In the
poverty field, the Commission was also responsible for the creation of the European Anti-Poverty
Network, which in turn has spawned further specialist networks. Elsewhere, Eurogroups concerned with the elderly, the disabled, one-parent
families, and rural issues arose directly from
Commission funding programs, and the European
Women's Lobby arose directly from the initiatives
of a group of women inside the Commission itself.
In territorial fields, the Commission has a
dedicated funding program for the establishment
of trans-European networks and is increasingly
present in the individual regions themselves. The
structural funds help to build local interest networks that would otherwise not be present in
those countries in which territorial traditions are
not strong. Some of the Commission's "own initiative" structural funds arose from plans developed between territorially based interest groups
and the Commission, inc1uding one that was
partly designed to expose member states for
flouting "additionality" rules in the disbursement
of structural funds (McAleavy, 1992). Particularly under conditions of uncertainty, where
member-state involvement in the integration
process is weak, unc1ear, andlor divided, networks of interests and supranational institutions
possess considerable opportunities to move integration along (Greenwood, 1997). These actors
may advance integration by stealth, seeking to ensure that member states do not see issues in terms
of "winners" or "losers" (Cram, 1993). In some
business sectors, in particular, explanations of integration can only be accounted for by exarnining
the relationship between interests and the Commission. In the pharmaceuticals (Greenwood,
1995) and consumer electronics sectors (Cawson,
1992), the relationship between private interests

and the Commission be ars all the hallmarks of

neocorporatism.
It is surprising to note that around two-thirds
of public interest groups have a turnover exceeding ECU 100,000 (Greenwood and Aspinwall,
1997) and that over a quarter claim to have more
than ten staff. The group with the most resources,
the European Council of Chemical Manufacturers
Federation (CEFlC), has 70 staff members.
Arnong business groups, a secretariat of twenty is
not uncommon. Some groups, such as Greenpeace, Friends of the Earth, the World Wide Fund
for Nature, and Amnesty International, can draw
from their Brussels policy offices on the resources
of hundreds of staff worldwide. Because the European-level offices of such groups are policy offices, they do not suffer from collective action
problems that have emerged among some other
groups.
Two-thirds of all Eurogroups are federations
of national associations, with the remainder primarily direct membership structures. The most
cumbersome type of structure concerns the European confederations of national confederations of
associations, including the Union of Industrial and
Employers' Confederations of Europe (UNICE),
the European Trade Union Confederation
(ETUC), the European Secretariat of the Liberal,
Independent, and Social Professions (SEPLIS),
and the European Council for Voluntary Organizations (CEDAG). These have considerable difficulties in platform building and are excessively prone
to compromise. On the other hand, the two most
coherent and effective cross-sectoral Eurogroups
are the ERT and the Arnerican Chamber of Commerce in the EU (AMCHAM-EU), both of which
are direct membership structures that emerged in
the 1980s.
At the sectoral level, a variety of federations
of national federations have proved to be effective
actors, such as those in the pharmaceuticals, iron
and steel, and chocolate sectors, although there
are also federated structures with coherence problems (Greenwood, ed., 1995; Pedler and van
Schendelen, 1994). Where problems have arisen, a
typical response has been to create a more direct
relationship with fums, and a number of "mixed"
federated and direct membership structures are
now present. Although sectoral direct membership
structures have existed since the start of the EC,
there has been a tendency in recent years for exclusive, "rich firm club" direct membership struc-

Interest Groups

tures to develop. Even though these lean structures

enjoy the advantages of speedy platfonn building,
they invite competitive interest representation
from excluded groups. Increasingly, therefore,
more infonnal structures of (mostly large firm) interests have arisen, ranging from issue alliances to
semipennanent meeting forums. The latter can be
important network structures, satisfying needs for
contacts, infonnation, socialization, reassurance,
and generation of ideas.
In reality, the rationality of collective action
is relatively uncomplicated at the European level
because the logic is toward membership. In a relatively uncertain political and economic environment where fonnal and infonnal types of infonnation are at a premium, the costs of nonmembership
are too high and the costs of membership are relatively low. Nonmembership means that the chance
to influence group strategies is lost, a reality that
drove the French car manufacturer PSA Peugeot
back into membership of the Association of European Automobile Manufacturers (ACEA) after a
period outside the group following a dispute over
membership of Japanese-dominated European car
finns. For national associations, some of whom
may have created the Eurogroup in the first instance to satisfy their needs to operate at the European level, officials fonn a value community in favor of membership. Once again, the costs of
nonmembership for national associations inc1ude
the risk of underrnining credibility with their own
members owing to an inability to service their European-leve1 needs.
In direct membership structures, large finns
are accustomed to working together in different
national regulatory environments, to the extent
that anti trust legislation is sometimes needed to
keep them apart, particularly in the latter stages of
the product cyc1e as finns adopt defensive postures against outside competition. These players
may have leamed the benefits of habits and collaboration in membership forums beyond the European level. The logic of the single market
demonstrated the need for collaboration, resulting
in a wave of alliances, mergers, and acquisitions
to enable firms to take advantage ofthe opportunities presented by operating across national boundaries. Apart from peer pressure toward membership, personnel from large firms sirnply we1come
the opportunity to meet their industry colleagues
in order to satisfy a variety of status, social, career,
interpersonal, leaming curve, and reassurance

293

needs as well as the need to obtain fonnal and infonnal market intelligence. For those reasons,
economic selective incentives are almost nonexistent as membership services among Eurogroups
(Greenwood and Aspinwall, 1997).
Much of the recent discussion of the integration process has proceeded without full consideration of the roles that groups and other aggregations of interests perfonn. Studies of interests can
provide detailed insights into the ways in which
groups operate as network actors with public authority in the integration process. Such exercises
can provide a range of inductive candidate ideas,
inc1uding the role of the supranational institutions
in network building, as agents with autonomous
capacities; the transfer of loyalties to the European level; the consequent creation of demand
structures for integration, which push the boundaries of integration; the ways in which member
states conc1ude agreements for which they cannot
foresee the consequences and the subsequent vacuum and conditions of uncertainty in which network actors of interests and supranational institutions operate, expand, provide ideas for, and
exploit; the vacuum left for interests to develop by
the "management deficit" of the Commission
(Metcalfe, 1992); the contribution of interests to
outputs in high politics arenas and outcomes in
low politics fields; the ways in which integration
proceeds by stealth from such networks; the associated power of rhetoric, leadership, socialization,
and ideas as forces in European integration; and
the ways in which iterated cooperation among interests and actors in the integration process leads
to preference convergence between them.
See also EUROPEAN ROUND TABLE OF lNDusTRlALISTS; INTEGRATION l'HEORY.

Bibliography
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Making: The Case of the European Consumer Electronics Industry." In J. Greenwood, J. Grote, and K.
Ronit, eds., Organized Interests and the European
Community, pp. 99-118. London: Sage.
Comrnission. 1992. An Open and Structured Dialogue
Between the Commission and Special Interest
Groups. SEC(92)2272 final. Brussels: Comrnission.
Cram, L. 1993. "Calling the Tune Without Paying the
Piper? Social Policy Regulation: The Role of the
Comrnission in European Social Policy." Policy and
Politics 21, no. 2, pp. 135-146.
Greenwood, J. 1995. "The Phannaceutical Industry: A
European Business Alliance that Works." In J.
Greenwood, European Casebook on Business Al-

294

Intergovernmental Conference (lGC)

lianees, pp. 38-48. Hemel Hempstead: Prentice

Hall.
- - . 1997. Representing Interests in the European
Union. London: Macmillan.
Greenwood, J., ed. 1995. European Casebook on Business Alliances. Hemel Hempstead: Prentice Hall.
Greenwood, J., and M. Aspinwall. 1997. European
Level Collective Action. London: Routledge.
McAleavy, P. 1992. The Politics oi European Regional
Development Policy. Strathclyde Papers on Government and Politics, no. 8. Strathclyde: University of
Strathclyde.
Metcalfe, L. 1992. "After 1992: Can the Commission
Manage Europe?" Australian Journal oi Public Administration 51, no. 1 (March), pp. 117-130.
Pedler, R., and M.P.C.M. van Schendelen, eds. 1994.
Lobbying the European Union: Companies, Trade
Associations and Issue Groups. Dartmouth: Aldershot.

-Justin Greenwood

Intergovernmental Conference
(IGC)
The acronym IGC, standing for intergovernmental
conference, has become a key word in Europe's
political vocabulary over the past years. Formally,
IGCs are based on Article N of the Treaty on European Union (TEU), which states that "the government of any Member State or the Commission
may submit to the Council proposals for the
amendment of the Treaties on which the Union is
founded. If the Council, after consulting the European Parliament and, where appropriate, the Commission, delivers an opinion in favor of calling a
conference of representatives of the governments
of the Member States, the conference shall be convened by the President of the Council for the purpose of determining by common accord the
amendments to be made to those Treaties. The European Central Bank shall also be consulted in the
case of institutional changes in the monetary
area."
Article N succeeded Article 236 of the Rome
treaty and contains the normal procedure for
amending the EC and EU treaties. In certain cases
(e.g., of accession or association), the treaties may
also be modified by unanimous Council decision,
that is, without the prior convening of an IGC. Article 236 was first used for the convention relating
to the Netherlands AntilIes (1962) and thereafter
for such cases as the merger treaty (1965), the
treaty modifying certain budgetary provisions
(1970), and the treaty amending certain provisions

of the protocol on the statute of the European Investment Bank (1975). In all these cases an IGC
was convened, though usually for abrief period.
The IGC for the merger treaty lasted only one day
(April 8, 1965), as the actual negotiations had already been conducted in a number of Council
meetings.
With the negotiations that led to the 1986
Single European Act (SEA), the 1992 TEU, and
the 1997 Amsterdam Treaty, IGCs have turned
from being a legal formality into big political
events that attract a lot of public attention and
have a considerable impact on European integration. These three major treaty overhauls may be
briefly described by comparing their origins and
principal objectives, their preparations, and the
course of the negotiations themselves.
The 7985/GC
The driving force behind the IGC leading to the
SEA was economic in nature: the necessity to create within the EC a true single market. This objective, supported by the national governments, the
Commission, and powernd business circles alike,
was deemed essential in order to enhance both the
internal economic performance of the EC and its
international competitiveness vis-a-vis Japan, the
United States, and the newly industrializing countries (Moravcsik, 1991). The chief purpose of the
IGC was to propose those institutional and procedural changes in the EC treaties that would contribute to the realization of the single market.
The decision to convene an IGC under Article
236 was taken by the European Council in Milan
in June 1985, but the drive for reform dated back
to the 1970s when institutional improvements
were proposed in the Tindemans Report (1975)
and the report by the so-called three wise men
(1979). These reports were followed by the Genscher-Colombo proposals (1981), but owing to the
problem of Britain's budgetary contribution,
among other things, no real progress toward reform could be made, apart from the rather noncommitting Solemn Declaration on European
Union issued by the heads of state and government in 1983. A breakthrough came only at the
Fontainebleau meeting of the European Council in
June 1984. Here a solution was found to the contentious British budgetary question, paving the
way for the establishment of an Ad-hoc Committee on Institutional Affairs (the Dooge Committee). The Dooge Committee presented its report,

Intergovernmental Conference (lCC)

partly influenced by the European Parliament's

Draft Treaty on European Union (1984), in March
1985. Although the European Council did not entirely follow the committee's recommendations,
the Dooge report and the contemporaneous Commission white paper on completing the single
market became the principal starting point for the
reform debate.
Although the European Council's decision to
attempt a major treaty revision was not taken
unanimously (the British, Danish, and Greek
prime ministers voted against convening an IGe),
the negotiations themselves, which started in Luxembourg on September 9, 1985, were conducted
in a constructive spirit, as all parties agreed on the
main objective of the conference (Dinan, 1994).
However, disputes broke out between countries
1ike Germany, Italy, and the Bene1ux (usually supported by the Commission), on the one hand,
which preferred to formulate more ambitious federal goals in such areas as monetary cooperation
or the rights of the European Parliament (EP), and
the "minimalist" member states, on the other
hand, spearheaded by the UK.
Nevertheless the UK favored strengthening
European Political Cooperation (the member
states' foreign policy coordinating mechanism),
which was discussed in aseparate working group
of the IGe and subsequently codified under Article 30 of the SEA. The negotiations were concluded in Luxembourg on J anuary 27, 1986, and
the SEA was signed in February 1986.

The 7997 Ices

Although the driving force behind the IGe that resulted in the SEA was mainly economic, with only
a supplementary role for the necessity to improve
foreign policy cooperation, the forces leading to
the two subsequent IGes were predominantlY of a
political-security nature, despite the centrality of
the monetary issue. Two interrelated sets of factors might be distinguished in this regard. One
was an internal dynarnic that aimed to provide the
single market program, initiated by the SEA, with
its logical monetary (and social policy) follow-up.
This path was largely set out in the Delors Report,
with its three-stage approach to Economic and
Monetary Union (EMU), which the European
Council approved in December 1988. Meeting in
Strasbourg a year later, the European Council decided under Artic1e 236 to convene an IGC on
EMU (Dinan, 1994).

295

These "internal" considerations became heavily influenced by a second, "external" set of circumstances symbolized by the fall of the Berlin
Wall in November 1989, the demise of the Soviet
empire, and the irnrninence of German unification.
These events influenced the drive for treaty revision in three ways. First, they accelerated the
process of monetary integration, because France
wanted to curb the potential power of a reunified
Germany by subsuming the mark into a single European currency. Second, they prompted new
thinking about the EC's institutions because, in return for the loss of the mark, Germany required a
strengthening of supranationalism. Third, they led
to the feeling that the changes in Central and Eastern Europe required c10ser security cooperation
among the EC's member states. Given that the
steady evolution of the internal market also required more cooperation in Justice and Horne Affairs, in the course of 1990 the setting was ripe for
a major overhaul of the treaties.
Accordingly, the European Council decided
in June 1990 to convene two IGCs, one on economic and monetary union and the other on political union. Both were formally opened at the Europe an Council in Rome, in December 1990, but
negotiations began in January 1991, under the
Luxembourg presidency. The two IGes were conducted in separate tracks: the EMU negotiations
were led by the ministers of finance, assisted by
their central bankers; the political union negotiations were coordinated by the ministers of foreign
affairs, occasionaIly assisted by representatives of
other departments, like justice or horne affairs.
Similarly, their fates were also quite different.
The negotiations on EMU built on the highly professional preparations of the De10rs Report and its
aftermath and proceeded relatively smoothly, with
an agreement on the outlines of the EMU paragraphs already reached weIl before the Maastricht
sumrnit of December 1991. By contrast, the political union negotiations had little more than the European Council's December 1990 mandate to
build upon. Security issues and institutional affairs
proved particularly contentious (Laursen and Vanhoonacker, 1992). The proposal of the Dutch presidency, which took over chairmanship of the IGe
in the second half of 1991, to replace the earlier
Luxembourg draft treaty with a radically different,
more federal draft treaty, caused a minicrisis
(Black Monday, September 30, 1991) and seriously delayed the negotiations. Security was an-

296

Intergovernmental Conference (IGC)

other contentious item, drawing contending proposals from several member states throughout the
negotiations. In the event, both the EMU and political union negotiations were conc1uded at the
Maastricht summit (December 9 and 10, 1991),
although not without several opting-in and optingout provisions being granted to placate the British
in particular.
The 7996-7997 Conference

The main purpose of the next IGC was basically to

consolidate the acquis communautaire with a
view to the further enlargement of the EU to inc1ude the Central and Eastern European states, as
weH as Cyprus and Malta. As such, the central objective was mainly political, with a strong security
element, keeping in mind that a solid EU is important not only for the economic well-being of its
citizens but also for the stability of Europe at large
(Edwards and Pijpers, 1997).
The mandate for the 1996-1997 IGC was explicitly contained in the TEU, which inc1uded several paragraphs that specified the need for future
revision. Subsequent decisions by the member
states provided an additional mandate for the IGC.
At a meeting in Ioannina in March 1994, the foreign ministers decided to review in particular the
system of qualified majority voting. Two months
later, the European Council agreed at its meeting
in Corfu to form a reflection group with the task
of submitting apreparatory report on the next
treaty revisions. Chaired by Carlos Westendorp, a
senior Spanish diplomat, the reflection group consisted of foreign ministers' personal representatives, a commissioner (Marcelino Oreja), and two
members of the EP (Elmar Brok and Elisabeth
Guigou). The reflection group started its work
with a symbolic meeting on June 2, 1995, in
Messina-where, forty years earlier, foreign ministers had met to relaunch the European integration project-and submitted its report on December 5,1995. The IGC itselfbegan under the Italian
presidency, in Turin, on March 29, 1996, and
ended at the conc1uding summit of the Dutch presidency, in Amsterdam, on June 16 and 17, 1997.
The 1996-1997 IQC las ted longer than its
predecessors but achieved markedly less. Not only
was its agenda more modest, but a climate of public skepticism and political weakness made
progress painfully slow. A change of govemment
in Britain raised hopes about a more positive
British attitude toward integration in general and

about prospects for a breakthrough at the IGC. But

coming less than two months before the Amsterdam summit and after twelve months of desultory
negotiations, Tony Blair's arrival on the scene
could do little to alter the IGC's prospects.
Earlier, the Irish presidency in the latter part of
1996 had worked hard to move the negotiations
along and prepared a draft treaty for the Dublin
summit of December 13 and 14. But the Irish
avoided the IGC's most contentious questions: the
size of the Commission, weighted voting in the
Council, and the relationship between the EU and
the Western European Union (WEU). A Dutch
presidency more circumspect than in the 1991 IGC,
when its radically revised draft treaty caused a crisis in the political union negotiations, attempted to
reach a consensus on these and other outstanding
procedural and substantive issues. A special summit in Noordwijk, on May 23, 1997, c1eared the
way for three weeks of frantic behind-the-scenes
negotiations before the Amsterdam sumrnit.
In the event, in tense, late-night negotiations
in Amsterdam on June 17 and 18, EU leaders
failed to resolve disputes over the size of the Commission, a new weighting of votes in the Council,
and an extension of qualified majority voting. The
ensuing Amsterdam Treaty made minor changes
to the functioning of the Common Foreign and Security Policy (CFSP) (notably through the establishment of a policy planning and early warning
unit), called for c10ser cooperation between the
EU and WEU (hut not the eventual merger of both
organizations that France and Germany had advocated but that Britain, Denmark, and the neutral
member states had opposed), incorporated the
Schengen agreement into the TEU (while guaranteeing Britain's right to control its own borders),
and inc1uded a new title on unemployment.
Concfusion

Though legally the IGCs are just treaty amendments, the big review conferences of 1985, 1991,
and 1996-1997 have gradually become key events
in the integration process, with a considerable political impact beyond the often rather technical revisions of treaty paragraphs. The IGCs themselves
are part of a larger reform cyc1e, which starts with
a political agreement to pursue institutional reform and ends with the implementation of a new
treaty. In between are the successive stages of
preparation, agenda setting, negotiating, drafting,
treaty formulation, and ratification. As each re-

Interim Agreement 297

fonn cycle may take about four to five years altogether, it should be realized that the EC/EU has
devoted the larger part of the period between the
early 1980s and the late 1990s to the political and
legal business of treaty refonn.
The IGCs and related parts of the refonn cycle clearly serve some positive functions. They
adapt the Community's instruments and procedures to changing econornic, political, or strategic
circumstances both within the EU itself and in the
broader external environment. They also have important socialization effects, since they involve an
ever-widening circle of govemment departrnents,
central banks, regional authorities, social partners,
and lobbies as weH as increasing media coverage.
Preparations for the 1996-1997 IGC were accompanied by active attempts by the member states
and the EU institutions to stir a public debate on
the impending negotiations. Another function of
the IGCs is to accommodate certain national interests in achanging setting. The pre-TEU IGC, for
instance, with EMU as a cornerstone, was essential to aHay French concerns over Gennan unification. For its part, Gennany at that time demanded
stronger European political institutions to underpin the proposed EMU and to support its delicate
security position in central Europe. The 19961997 IGC took place in different econornic and
political circumstances, but it remains true that
further deepening of the EU is necessary not only
to improve the efficiency of the EU's institutions
but also to further shore up Gennany's position.
It should also be recognized that the recurrent
IGCs and their results draw a lot of attention from
the outside world. As an expression of a growing
European identity, they seem sometirnes to be better appreciated abroad than by Europe's domestic
audience. Finally, we should not forget that the
treaty revisions themselves have been rather successful. The core provisions of the SEA (completion of the single market before January 1, 1993)
and of the TEU (completion of Economic and
Monetary Union) have been implemented satisfactorily.
But there are some negative aspects as weH.
First, the recurrent time-consuming refonn cycles
tend to become a kind of para-international organization on the fringes of the EU itself and extract issues from the agenda of the EU proper. Second, in
addition to the conduct of the EU's intergovemmental second and third piHars, IGCs tend to insert
into the integration process another framework for

intergovemmental decisionmaking. Third, institutional refonn may also be used to introduce merely
cosmetic changes, which camouflage the lack of
real progress on integration. Fourth, partly as a result of the deadlines set for the IGCs, agreements
often result in awkward comprornises, which in
their subsequent codified fonn may easily frustrate
European decisionmaking and inhibit a balanced
constitutional evolution of the EU (the social protocol is a case in point). Finally, institutional refonn
will not easily be able to repair certain fundamental
problems of the EU, such as its lack of legitimacy
or its inadequate foreign policy capacity.
See also AMSTERDAM TREATY; SINGLE EUROPEAN Acr; TREATY ON EUROPEAN UNION.

Bibliography

Dinan, Desmond. 1994. Ever Closer Union? Boulder:

Lynne Rienner.
Edwards, Geoffrey, and Alfred Pijpers, eds. 1997. The
IGC: 1996 and Beyond. London: Pinter.
Laursen, Finn, and Sophie Vanhoonacker, eds. 1992.
The lntergovemmental Conference on Political
Union. Maastricht: European Institute of Public Administration.
Moravcsik, Andrew. 1991. "Negotiating the Single European Act." In Robert O. Keohane and Stanley
Hoffmann, eds., The New European Community.
Boulder: Westview Press.

-Alfred Pijpers

Intergovemmentallsm
In integration theory, intergovemmentalism refers
to the supremacy of national govemments in the
integration process over supranational and other
actors.
See also INTEGRATION THEORY.

Intergroups
Intergroups consist of members of the European
Parliament (EP) from different countries and different political groups with a common interest in a
particular third country or subject maUer. Although they have no fonnal role in the EP, intergroups can have an important mobilizing function.
See also EUROPEAN PARLIAMENT.

Interim Agreement
The EU often concludes interim agreements in order to implement the trade and aid provisions of

298

Interinstitutional Agreements

international agreements that have mixed (EU and

member state) competence-such as partnership
and cooperation agreements, association agreements, and Europe Agreements-pending ratification of such agreements.
See also CENTRAL AND EASTERN EUROPEAN
STATES.

Interlnstltutlonal Agreements
The Council of Ministers, European Parliament,
and Commission occasionally negotiate interinstitutional agreements among themselves on legal,
organizational, and budgetary arrangements in order to run the EU more efficiently. For instance,
the interinstitutional agreements in 1988 and 1993
on permitted levels of annual spending over periods of several years facilitated long-term budgetary planning. Interinstitutional agreements are
an important means of informal constitution building in the EU. Approximately thirty have been
concluded so far.

International Ruhr Authorlty

(IRA)

The International Ruhr Authority (IRA) was set

up in April 1949 to supervise coal and steel production in the Ruhr region of Germany. France, a
leading member, saw the authority as a means of
preventing Germany's full economic recovery.
With the !RA ineffectual and on the point of being
abandoned, Jean Monnet came up with the Schuman Plan, an alternative and ultimately successful
proposal to bind the new Federal Republic of Germany into Western Europe. This was the basis for
the European Coal and Steel Community, forerunner ofthe EC and the EU.
See also EUROPEAN COAL AND STEEL COMMUNITY.

Intervention
Intervention is the means by which national agencies buy and store surplus production in the Common Agricultural Policy.
See also COMMON AGRICULTURAL POLICY.

Investlture
Investiture refers to the procedure, under the terms
ofthe Treaty on European Union, whereby the Eu-

ropean Parliament (EP) approves the appointment

of the Commission president and the college of
commissioners. The new investiture procedure
was applied for the first time in 1994. The first
part of it-the debate and vote in the EP on the
president-designate-was overshadowed by the
manner of Jacques Santer's appointment by the
European Council (he was a compromise candidate after Germany rejected Ruud Lubbers, the
Dutch prime minister, and Britain rejected JeanLuc Dehane, the Belgian prime minister). Opinion
in the EP differed on Santer's qualifications and
suitability for the job and also on the appropriateness of endorsing a candidate selected in such a
way. In the event, the EP's narrow vote for Santer
averted a public relations disaster but weakened
the president-designate's stature. The remainder
of the appointment procedure-the nomination of
commissioners and the EP's vote on them-included well-publicized, individual hearings for
each commissioner-designate (something not expressly provided for in the treaty). The EP's approval of the college by a large majority undoubtedly enhanced the Commission's legitimacy, but
the entire investiture procedure took too long. Beginning with the debate on Santer's nomination in
July 1994 and ending with the EP's vote on the
commissioners-designate in January 1995, the
process lasted nearly seven months in all.
See also COMMISSION; EUROPEAN PARLIAMENT.

loannlna Compromlse

Under the terms of the accession agreements with

Norway, Sweden, Austria, and Finland, the number
of "weighted" votes in the Council of Ministers was
due to increase from 76 to 90 following EU enlargement (in the event, Norway did not join, and
the total number of votes was reduced to 87). Hitherto, with a total of 76 votes in the Council, the
blocking minority was 23; after enlargement, most
member states agreed, the blocking minority should
be raised to 27 (or 26 following Norway's decision
not to join). But Britain strongly objected and attempted to keep the blocking minority at 23 even in
the enlarged EU. Ostensibly, Britain feared being
outvoted on sensitive issues; in reality, the government was responding to strong anti-EU sentiment
on its own back benches in parliament. A compromise was eventually worked out at a Council meeting in Ioannina, Greece, on March 29, 1994: "If

Ireland

members of the Council representing a total of 23

to 25 votes indicate their intention to oppose the
adoption by the Council of a decision by a qualified
majority, the Council will do all within its power to
reach, within a reasonable time ... a satisfactory solution that can be adopted by at least 65 votes." The
Ioannina compromise was largely a face-saving device for the British and had no practical impact on
EU decisionmaking.
See also DECISIONMAKING PROCEDURES.

IRA
See INTERNATIONAL RUHR AUTHORITY.

IRDAC
See INDuSTRIAL REsEARCH AND DEVELOPMENT AoVISORY COMMTITEE.

Ireland
Although a founding member of the Organization
for Economic Cooperation and Development and
of the Council of Europe, Ireland joined the EC
only in 1973. A fundamental change in economic
policy from protectionism and import substitution
to openness and foreign direct investment provided the basis for Ireland's initial application in
1961. The timing of Ireland's application (which
coincided with Britain's), however, reflected not
only a new commitment to market liberalization,
but also the extent of the country's existing trade
dependence on the UK (Britain accounted for 54
percent of Ireland's extemal trade).
Ireland expected accession to lead to greater
economic welfare spurred by a marked rise in output, an expansion and diversification of trade, and
generous transfer payments under the Common
Agricultural Policy (CAP). In political terms, the
prospect of participating fully in EC decisionmaking appealed to a small, hitherto isolated country.
On the negative side, concems about the ability of
indigenous industry to compete within the EC, and
about loss of sovereignty, were raised in Ireland
during the lengthy preaccession period. Fianna Fail
and Fine Gael, the two main political parties, and
representatives of employers and farmers strongly
advocated membership; the small Labour Party and
most trade unions opposed it. In the event, 80 percent of those who voted in the 1972 constitutional
referendum approved Ireland's membership.

299

Irish industry and agriculture underwent considerable adjustment as a result of EC accession,

although causality is difficult to prove given the
influence of non-EC factors such as globalization
and govemment policies. Since 1973, trade dependence on the UK has been reduced to 27.5 percent
of total trade, and trade with the rest of the EU has
increased to 30 percent (Department of Foreign
Affairs, 1996). Traditional industries such as textiles, clothing, and footwear declined while the
electronics and pharmaceuticals industries,
buoyed by foreign direct investment, expanded
significantly. Such investment was stimulated by
access to the EC market and an active inward investment policy. Completion of the single market
ushered in further competition and, in the 1990s,
posed significant challenges to the insurance, energy, and telecommunications sectors in particular. Agriculture's share in employment dropped
from 27 percent in 1973 to 12 percent in 1995, by
which time it accounted for 12 percent of GDP.
Farm output and incomes increased, but farm
structures have been slow to adapt (a minority of
farmers accounted for most of increased output).
The Common Fisheries Policy (CFP) had a major
impact on Irish fisheries as a result of increased
competition and the opening of other member
states' access to Irish territorial waters. Structural
difficulties also remain, and the system of total allowable catches imposes tight restrictions on the
development of the fisheries sector.
In terms of monetary policy, Ireland's participation in the exchange rate mechanism of the European Monetary System (EMS) in 1979 constituted a major departure, as the Irish pound/sterling
link was broken. Despite concems about the impact of currency differentials on trade with the
UK, especially in the indigenous sectors, the
choice was made in favor of low inflation and low
interest rates associated with the EMS. In the
1990s, macroeconomic policy has been shaped by
adetermination to be among the core countries
that form Economic and Monetary Union (EMU).
Tight management of public finances and steady
reduction in the debtJGDP ratio put the economy
on target for early entry.
Over time, the Irish per capita GDP has increased from 59 percent of the EU average at the
time of EC entry (when there were nine member
states) to over 85 percent in 1996. Continuation of
this trend would have implications for future levels of EC receipts, as Ireland would exceed the

300

Ireland

threshold for receipt of structural funds and of cohesion funds. This positive performance conceals
the fact that the rate of unemployment, some 15
percent in 1996, remains much higher than the EU
average and that the repatriation of profits by foreign-owned firms, dominant in manufacturing industry, inflates growth figures for the Irish economy. Financial transfers under the CAP and
structural funds have been substantial. Over the
1973-1995 period, net receipts totaled IR18.45
billion (Department of Foreign Affairs, 1996). In
1995, structural fund receipts accounted for 4.4
percent of lre1and's GDP. These were mainly used
to develop transport infrastructure and to promote
employment and training.
Politically, EC membership led to a gradual
Europeanization of domestic policies and the expansion of legislation such as that on equality, environmental protection, health and safety, competition, and social policy (Keatinge, 1991). Moreover,
the move toward comprehensive collective wage
agreements between government and the social
partners (representatives of trade unions and employers) in the late 1980s facilitated industrial
peace and sound management of public finances.
Given the tight constraints on fiscal and monetary
policies, further consensus is required both in
preparations for and participation in EMU. Opinion
among the social partners is divided on the question
of entry into EMU. There is concern about the possible impact of EMU on peripheral economies, the
limited availability of EU funds to deal with asymmetric shocks, and the possibility that Britain's opt
out could expose the Irish economy to a weakening
of sterling. This would have serious repercussions
for Irish industry and agriculture, given that over 27
percent of exports--concentrated in labor-intensive
sec tors-are destined for the UK. Finally, the limited availability of instruments within EMU to deal
with such scenarios could place increased pressure
on labor market flexibility.
In terms of foreign poliey, participation in European Political Cooperation (EPC), a mechanism
to coordinate member states' foreign policies,
obliged Ireland to deepen its contacts with the outside world. Concerns about loss of sovereignty in
this area and the erosion of Irish neutrality surfaced at each stage of formal ECIEU integration.
Neutrality, although based on nonmembership of
military alliances, is a value-Iaden concept associated in the public mind with independence, peace,
and justice in international affairs. Political sensi-

tivity on this point limits Irish involvement in the

Western European Union (WEU) to that of an observer. The government's 1996 white paper on foreign policy states that Irish participation in WEU
peacekeeping operations will be examined on a
case-by-case basis and that Ireland is ready to take
part in negotiations on a common defense policy.
Any involvement in such would be put to the peopIe in a referendum.
Public attitudes toward integration have been
very positive-referenda on approval of the Single
European Act (SEA) and the Treaty on European
Union were supported by 70 percent of voters.
Such support could be tested, however, were conditions of membership to alter significantly (Sinnott, 1995). In the past, foreign and European policy attracted little attention in the national
parliament (Dail) or senate (Seanad), where the
committee system remained weak and underresourced. The Joint Committee on Foreign Affairs
and the Joint Committee on European Affairs, established in 1993 and 1995 respectively, now provide important forums for debate. In 1995, the Department of Foreign Affairs organized aseries of
public seminars when preparing the white paper.
An independent Institute for European Affairs
(IEA), the first of its kind, was established in 1991
to provide research and analysis.
Ireland has launched few strategic initiatives to
promote European integration. Instead, Ireland's
approach is characterized by consensus building
and brokerage (Scott, 1996). Yet Ireland has made
important contributions to integration: through the
so-called Dooge Committee, which prepared the
ground for the SEA and was chaired by a former
Irish foreign minister; through some of its commissioners; and by presiding over the intergovemmental conference (lGC) in the latter part of 1996. Ireland's reputation for effective management of the
Council presidency, with respect to both internal
and external EU affairs, is good.
Successive Irish governments have first of all
emphasized the principles of solidarity and cohesion as fundamental cornerstones of EU integration. A second major interest is the CAP, given
that the size of agriculture in the Irish economy is
three times the EU average (National Economic
and Social Council, 1992). Third, Ireland has supported a strong and independent Commission.
With a representation of only fifteen members of
the European Parliament (EP), Ireland has been
less enthusiastic about increasing the EP's powers.

Italy
These essential interests in the EU were set
out in the 1996 white paper on foreign poliey.
Looking to the 1996-1997 IGe, the white paper
underscored the importance of maintaining the institutional balance within the EU, Ireland's right
to nominate a commissioner, and the development
of a Europe doser to its citizens. In this context,
the last Irish presidency (Iuly-December 1996)
identified the fight against unemployment, drugs
trafficking, and crime as its priorities. Looking to
the future, the Irish government supports EU enlargement, full participation in EMU, and the development of cooperation in the sensitive area of
Iustice and Horne Affairs. Challenges arising from
enlargement, and the uncertain security environment in post-Cold War Europe, make it increasingly necessary for Ireland to exercise solidarity
with its EU partners. At the same time, the importance of dose political and economic links with
Britain requires a skillful balance of Ireland's efforts to stay at the core of integration while maintaining harmonious Anglo-Irish relations.
See also TABLE 6; TABLE 10; APPENDIX 2; APPENDIX 3.

Bibliography

Department of Foreign Affairs. 1996. Challenges and

Opportunities Abroad: White Paper on Foreign Policy. Dublin: Stationery Office.
Keatinge, Patrick, ed. 1991. Ireland and EC Membership Evaluated. London: St. Martin's Press.
National EConomic and Social Council (NESC). 1992.
The Impact of Reform of the Common Agricultural
Policy. Dublin: NESC.
Scott, Dermot. 1996.lreland's Contribution to the European Union. Occasional Paper 4. Dublin: Institute
for European Affairs.
Sinnott, Richard. 1996. Knowledge of the European
Union in lrish Public Opinion: Sources and Implications. Occasional Paper 5. Dublin: Institute for European Affairs.

-Anna Murphy

Isoglucose (ase
The so-called Isoglucose case was alandmark European Court of Iustice (ECI) ruling in 1980 on
the use of the consultation legislative procedure.
Under the consultation procedure, the Council of
Ministers is the sole decisionmaker but must consult the European Parliament (EP). In the Isoglucose case, the ECI upheld the EP's right to be consulted and generally strengthened the EP politieal

301

position in the EC by nuIlifying a Council decision that had been taken under the consultation
procedure but without the EP's having been consulted.
See also DECISIONMAKING PROCEDURES; EuROPEAN PARLIAMENT.

Italy
The symbols of the EU-the burgundy passport,
the flag with twelve stars, and the European anthem-are fully accepted by Italians. Earlier in the
integration process, however, certain left- and
right-wing elements opposed Italy's involvement
and advocated bringing Italy out of either the capitalistic market or the state of restricted national
sovereignty into whieh (according to them) EC
membership had brought the country. But with the
passing of time, Italians have come to acknowledge the advantage of staying in the EU without
reserve. Opinion surveys point out that national
identity does not predude the existence of other
identities in Italian people. On the contrary, they
imply that, in the mind of the Italians, affection for
national symbols goes weIl with affection for EU
symbols. Further insights into Italian feelings
about the EU may be derived from an examination
of different actors in the integration process, such
as interest groups, professional associations, the
media, and, of course, the political dass.
Interest Groups

Three types of economie interest organizations

take part in EC policymaking: trade associations,
agricultural associations, and trade unions. Such
associations are organized transnationally in Eurogroups at the EU level or, in a few cases, have
their own offices in Brusse1s to collect information
and lobby. Eurogroups produce official positions
involving all their members on EC norms and polieies, although a dominant national delegation or a
few strong national delegations may take responsibility for formulating the official position of the
group. Usually, Italian delegations in large Eurogroups lack the power to formulate the group position. To overcome their weakness, Italian interest
groups do what the weaker members of Eurogroups usually do: they put press ure on their
own government (at the national level) rather than
on the Commission (at the EU level). In such a
case, if anational group wants to block or change a
proposal of the Commission, it must persuade its

302

/taly

government to influence the decision of the Council of Ministers on that proposal, that is, to intervene in the final stage of the EC decisionmaking
process, even by threatening to reject the proposal
by using the national veto. This strategy, however,
is not always possible or successful. Regarding the
Cornmon Agricultural Policy, for instance, the Italian government has rarely been able to influence
decisions. However, the fault does not lie entirely
with the government; agricultural associations also
deserve blame for not acting appropriately in the
preparatory phase of the negotiations and for not
having adequate contacts with the relevant govemment officials.
A limited ability to collect and process information, and to analyze policy options, has
strongly conditioned the action of Italian interest
groups. As a result, they prefer to act in the traditional way with the national bureaucracy and the
governing parties, though such means are not effective in the political-institutional structure of the
EU. The situation is no different in the case of
such professional associations as those of lawyers,
nurses, and so on. In most cases, such associations
are not interested in Europe; they react to EU initiatives rather than taking the initiative themselves
and pay little attention to the Commission's annual program, green papers, and white papers.
Education and the Media
For a long time, education and research institutions also paid scant attention to the process of
European integration. National curricula could not
be modified easily or quickly. The annual celebration of Europe Day (May 9) in primary and secondary schools was an easy but superficial alternative to thinking seriously about the significance
of European integration. Like universities elsewhere in the EU, Italian universities have great
opportunities to promote teaching and research on
European integration. Certain opportunities are
exploited; others are not, as a result of the inertia
and conservatism of the academic world and the
adverse legislative and administrative factors that
need to be addressed by the national govemment.
The mass media have given increasing attention to European integration. In the past ten years,
the EU has received more coverage than in previous years. However, newspapers have tended to
portray European integration as an increasingly
unfortunate attempt to create a European federal
state. Only recently has the media seemed to ap-

preciate the idea that the EU is a political system

to be defined and appraised in its own right and
not in reference to a federal goal expressed fifty
years ago.
Political Parties
Generally speaking, Italian political parties are inc1ined to keep party competition at the national
level strongly separate from party action at the EU
level. But there are exceptions. The Greens have
always exhibited a strong "European look," focusing their attention on "new politics" issues at the
European and national levels and trumpeting this
''unitary attitude" as proof of their modernity. On
the contrary, although accepting European integration, the party of the traditional right (the late Social Movement; today the National Alliance) has
always been careful to keep politics at the national
level separate from politics at the EU level. The remaining parties fluctuate between these two tendencies, but in recent years a seeming separation of
the state level from the EU level of political competition and growing criticism of ambitious policies--especially Economic and Monetary Union
(EMU)-seem to be on the rise in certain Italian
parties, especially on the right. The ensuing change
of opinion (from an unconditioned to a conditional
support for integration) may be explained in two
ways.
One explanation is at the state level. Following
the transformation of the Italian party system in the
early 1990s that was caused by rapid political and
institutional change (the crisis of the "first republic" and the new electorallaw), the main members
of the right-wing coalition (Forza Italia and, to a
lesser extent, the National Alliance) started to see
integration as an arena for domestic political competition. In particular, they seemed to consider it
possible to extend their electoral support by advocating a Thatcherite approach to the EU.
The second explanation is at the EU level,
where parties have a peculiar "twin organization,"
owing to the combination within them of transnational party federations and European Parliament
(EP) groups. Each element has different goals and
procedures and a different distribution of power
and organizational c10ut among the member parties. The federation aims to expand national party
membership by adjusting the different positions of
its members; by contrast, the parliamentary group
aims to negotiate a unitary voting position on parliamentary resolutions. For that reason party

Italy

group leaders are ready to compromise, but only

to a certain extent. When a member party is small
and unnecessary to make or break a parliamentary
majority, party group leaders pay little attention to
it. National parties with few members in the EP
react to such situations with a politics of separation between the national and European levels of
govemance. From that point of view, in recent
years conditions at the EU level have worsened for
Italian parties.
Apart from Forza Italia, whose members recently merged with deputies of the French rightwing party Movement Republicain Populaire
(MPR) to create the Union for Europe (UPE)
Group, and the National Alliance, whose deputies
have not adhered to any group in the EP, major
Italian political parties are members of European
party groups with a federal and transnational organization: the Party of the European Socialists
(PES); the European People's Party (EPP); the
Liberal, Democratic, and Reformist Group (LDR);
and the Greens. These four federative-parliamentary groups have two distinct types of power distribution. The PES and the EPP groups (the two
largest in the EP) have a centralized power organization; the LDR and Greens have a diffused-power
organization. In the PES group, power is concentrated in the hands of the British Labour and the
German Social Democratic parties. Italian Eurodeputies had a degree of power only for a short period after the adhesion to the PES group in 1993 of
the Partito Democratico della Sinistra (PDS). That
power disappeared after the 1994 elections, however, with the collapse of the PDS. Today, Italian
deputies are not numerically decisive in the PES
group. Similarly, Italy's delegation in the EPP
group was numerically strong in the past but not as
strong as the German delegation. Since the collapse of the Italian Christian Democratic party,
however, Italian representation in the EPP consists
of members of various small parties and makes up
only 7 percent of the group. Simply put, Italian
members of the EP are unable to influence their
party groups because they have been marginalized
within the groups themselves.

Political Leadership and the Bureaucracy

Italian politicians were highly influential in the
formation of the European Communities. Statesmen like Alcide De Gasperi and, to a lesser extent,
Gaetano Martino exercised real European leadership and were able to find solutions to serious ob-

303

stades on the road to integration. Certainly, they

have not been the only Italian politicians to make
important contributions to the EU's development.
Yet Italy conspicuously lacks a "European dass":
it does not have an adequate number of politicians, scientists, businesspeople, and joumalists
constantly committed to Italy's full participation
in the European political system. The lack of a European dass has its roots mainly in the scarce attention given to Europe in Italian universities and
is accentuated by Italy's recent political problems.
Moreover, Italy lacks a first-dass public administration. The more that European policies
deepen, the more the state administration needs to
improve its efficiency. Instead, Italy is ill equipped
with instruments and procedures to coordinate the
actions of different administration branches involved in EU affairs. For a long time there was no
ministerial agency to coordinate action in the EU.
When it was finally established in 1987 in the
form of a Departrnent for Community Affairs, it
proved incapable of reconciling the often diverging positions taken by different Italian ministers in
Brussels. The autonomy given by the law to Italian ministries and the nature of Italian coalition
govemment, which reinforces bureaucratic autonorny, accounts for this situation.
Finally, the Italian parliament takes part in
EU affairs when anational parliamentary vote is
needed to ratify new treaties or to revise existing
treaties and when anational parliamentary law is
required to execute directives. Apart from ratification and legislation, parliament may either address
the govemment's position on EU policies (if there
is agreement among parliamentarians to do so) or
be consulted on draft legislation in the EU (if the
govemment wants to do so). In order to fulfill
these functions satisfactorily, parliament needs a
good number of deputies deeply involved in EU
affairs, a specialized and permanent committee,
and access to relevant and updated information.
Yet the Italian parliament is not weIl equipped in
any of these regards: it gives little attention to EU
problems; it lacks a specialized, permanent committee (the special committees of the chamber and
the senate do not have the powers of ordinary
committees); and it does not have access to adequate information and documentation.

Conclusion
Italy has experienced considerable political turmoil and change since the early 1990s, as a result

304

Italy

of which its role as a leading EU member state is

no longer assured. Understandably, the Italian
government and people assign great symbolic as
weIl as real importance to the country's participation in the final stage of EMU (the irrevocable fixing of exchange rates on January 1, 1999, and the
subsequent launch of the euro). As the center-Ieft
government's budget reform of October 1997 indicates, there is general consensus on the need to
take tough measures to meet the EMU criteria. Although entering EMU with the first group of
member states is not a panacea, failure to join the

euro zone in J anuary 1999 would have serious domestic and international political consequences
for Italy.
See also DE GASPERI, ALeIDE; SPINELLI; ALTERO; APPENDIX 2; APPENDIX 3; APPENDIX 7; APPENDIX 8.

Bibliography
Francioni, Francesco. 1992. [taly and EC Membership
Evaluated. New York: St. Martin's.

-Fulvio Attina

Japan
Tbe main issue in EU-Japancse relations over the
years has been a growing and persistent Japanese
trade surplus with the EU. Tbis surplus created
protectionist pressures in thc EU that led to negotiation ofVoluntary Export Restraints (VERs) in a
number of areas as well as the imposition of antidumping duties on some Japanese goods entering the EC market. At the same time the European
side tried to get alleged Japanese protectionism reduced, first through reduction of tariffs and abolition of quotas, later through elimination of various
nontariff barriers (NTBs) to trade. On the European side a number of national quotas remained in
force for some Japanese products long after the
Common Commercial Policy (CCP) should have
been established. Most of these national quotas,
allowed under Article 115 of the Treaty of Rome,
were only phased out in connection with completion of the single market, which implied abolition
of border controls within thc EC. In one important
case-that of automobiles-preexisting national
quotas and VERs were replaced by a Communitywide limit on Japanese cars in the EC market that
is to last until 1999.
Trade and Finance

A direct dialogue between thc European Commission and Japan started in 1961, with the visit of
External Relations Commissioner Jean Rey to
Tokyo. Tbe Commission wantcd to replace existing national trade policies with a common EC policy as prescribed by the Treaty of Rome. But the
question of what to do with sensitive products and
safeguard clauses made this a difficult objective
within the EC, where national interests diverged.

It was only in July 1970 that the Council of

Ministers authorized the Commission to negotiate
with Japan, and two rounds of negotiations eventually took place in 1970 and 1971. Japan rejected
the Commission's efforts to include a safeguard
clause in a future trade agreement, arguing instead
that Article !XX of the General Agreement on Tariffs and Trade (GATT) should be a sufficient safeguard. Finally negotiations were suspended without results (Hanabusa, 1979, p. 6).
In the meantime trade between EC member
states and Japan had expanded dramatically. Exports from the EC Nine to Japan expanded from
$198 million in 1958 to $899 million in 1968, and
imports from Japan increased from $241 million
to $987 million in the same decade. Overall, however, by 1968 imports from Japan and exports to
Japan constituted only about 2 percent of the EC's
imports and exports (Ishikawa, 1990, pp. 15-16).
Tbe new economic policy announced by U.S.
president Richard Nixon in August 1971 created
strains in relations between the EC and Japan. Tbe
United States departed from the preexisting fixed
exchange rate and put pressure on Japan to restrain exports to the United States. Japan responded in part by trying to diversify exports and
open new markets in Western Europe. Accordingly, Japanese exports to Europe increased by
43.8 percent in 1972 and by 33.5 percent in 1973
(Hanabusa, 1979, pp. 6-7).
In May 1973 Japan's foreign minister visited
the Commission in Brussels. Here it was agreed
that "consultative talks should be held regularly
on the major issues of common interest at both
ministerial level and the level of experts." Since
then there have been regular official consultations
between both sides. An EC delegation (embassy)
was officially inaugurated in Tokyo in October
1975; the following year Japan opened a delegation in Brussels (Hanabusa, 1979, p. 7).
Establishment of these official channels of
communications, however, did not in itself solve
the growing trade problems. Indeed, the energy
crisis in 1973 added to the strains. From 1975 onward Japan was exporting more than twice as
much to the EC as the EC exported to Japan. As a
result, protectionism grew in Europe, mainly in
the form of demands for VERs. The bulk of
Japan's exports to Europe-radios, tape recorders,
television tubes, steel, and cars--came under
VERs. In the shipbuilding sector Japan was per-

305

306

Japan

suaded to increase prices and cut back on capacity the crux of the problem seemed not so much visi(Wilkinson, 1990, p. 175).
ble barriers like tariffs or QRs, but less visible barThe Cornrnission also urged that European riers, inc1uding "the habits and attitudes bred of
access to the Japanese market be improved. Re- Japan's vertically and horizontally integrated inducing tariffs was one way to ease market access dustrial, commercial and financial groups" (Com(the Kennedy and Tokyo Rounds of the GATT had mission, 1985, p. 4).
already gone a considerable way in that direction).
The Japanese economy was growing much
But the Cornrnission now concluded that NTBs, faster than the EC economy, and Japanese savings
such as government regulations concerning health, were much higher than savings in Europe. The
safety, and industrial or environmental standards, Commission suggested that a better balance beconstituted a greater barrier to access to the Japan- tween savings and investments in Japan could
ese market (Wilkinson, 1990, p. 175).
help, for instance "by capital formation in sectors
The second oil price increase in 1979 caused . where there are deficiencies, e.g. residential buildrenewed economic pressures in the world econ- ings and public investment." Looking at the Japanomy. Again, Japan fared better than Europe, ese current payments surplus, the Commission rethanks to export-Ied growth. Exports of cars from marked that "the yen has consistently been weak."
Japan to the EC Nine jumped by 29 percent be- Although the yen had appreciated against EC curtween 1979 and 1980, increasing the Japanese rencies, it was "questionable whether real exshare of the EC market from 7.9 to 11.1 percent change rates are a valid measure of the general
(Ishikawa, 1990, p. 24). Inevitably, quantitative re- competitive strength of the Japanese economy"
strictions (QRs) and VERs became part ofthe pic- (Commission, 1985, pp. 7-8).
Looking at some specific problems in the
ture for cars, too. Italy imposed the most restrictive policy, limiting Japanese imports to two Japanese market, the Commission found the highthousand cars annually. France followed with an est remaining barriers in the area of agricultural
unofficial limit of 3 percent of the market. Even products. But public procurement and standards,
more liberal countries like Britain and Germany testing, and certification procedures also caused
imposed limits of around 10 to 11 percent of the problems. So did the service sector: foreign banks
market. Only Denmark and Ireland, which had no and insurance companies had great difficulties opdomestic car production, remained open to Japan- erating in Japan, and it was "practically impossiese car imports (Ishikawa, 1990, p. 27). Similar ble for foreign lawyers to set themselves up in
trade problems emerged in the electronics sector, Japan as consultants." Finally, the registration of
patents and trademarks was extremely slow, and
inc1uding television sets and videotape recorders.
Apart from 1982, the trade gap kept increas- "counterfeiting of European products, particularly
ing during the early 1980s. In 1981, EC Ten im- luxury goods, continues to be a widespread pheports from Japan amounted to almost $19.5 bil- nomenon" (Commission, 1985, pp. 18-19).
lion, and exports amounted to $6.6 billion, leaving
European calls for monetary and fiscal coopa deficit of nearly $12.9 billion. By 1985 the eration echoed similar calls from the United States.
deficit had grown to $14.6 billion (Ishikawa, Eventually joint efforts to reduce the imbalances
1990, p. 31).
were agreed by the G5 (the United States, Japan,
Under these circumstances, in June 1985 the Germany, Britain, and France) at the Plaza Hotel in
Council invited the Commission to prepare a com- New York in 1985 by appreciating the yen in relaprehensive review of EC-Japan relations with rec- tion to the dollar. Within a year the yen rose 29 perommendations for action. In its report, published cent against the dollar; by 1988 the yen's value had
the following October, the Commission noted the almost doubled against the 1985 dollar. Because
growing trade deficit with Japan and the concen- European currencies had also appreciated in relatration of Japanese exports within a number of tion to the dollar, the change in the yen-European
sensitive sectors. The Commission recommended currency rate was less dramatic (Wilkinson, 1990,
a comprehensive strategy that would include a p.264).
genuine opening up of the Japanese market,
In 1979 the EC introduced legislation for
"moderation" of Japanese exports, and the evolu- "protection against dumped or subsidized imtion of balanced industrial, scientific, and techni- ports" from nonmember countries and adopted a
cal cooperation. In respect to the Japanese market, new regulation in 1984. The number of antidump-

Japan

ing actions increased substantially during the

1980s, as antidumping in effect became a substitute for other protectionist measures that had become more difficult to apply because of international commitments. Antidumping measures in
force against Japan in 1995 included duties
against audiotapes in cassettes, ball bearings, electrolyte capacitors, electronic weighing scales, ferroboron, lighters, linear tungsten halogen lamps,
microdisks, plain paper photocopiers, television
camera systems, and thermal paper (Comrnission,
1995b).
One of the most important questions for third
countries in the late 1980s was whether the EC's
single market would be an open, liberal regime or
whether it would amount to a Fortress Europe.
Sensitive to such concerns, in the fall of 1988 the
Comrnission announced that single market Europe
would be a "world partner," and the European
Council reiterated that comrnitment at its meeting
in Rhodes the following December (Laursen,
1991). Could the Community deliver? A test case
was that of pre-single market national quotas, of
which the member states had a total of 131 affecting Japan at the launch of the single market program. It was mainly the EC's southern member
states who maintained these QRs: Spain had 41,
Italy 37, Portugal 23, and France 17. Clearly, a
unified frontier-free market would make such national quotas impossible to maintain.
In the end the EC succeeded in abolishing national quotas by the end of 1992. But in the case
of cars a Community-wide limitation on Japanese
imports had to be negotiated. An unsigned gentlemen's agreement was reached in July 1991, limiting imports of Japanese cars to 1.2-1.3 million per
year until 1999, including more generous sublimits than in the preexisting quotas for Britain,
France, Italy, Spain, and Portugal. Japanese manufacturers with plants in Europe would be allowed
to increase production to 1.2 million cars annually
during the same seven-year transition period.
These would count as domestic (EC) cars (Sato,
1992, pp. 370-371).
In the meantime, various efforts to bring
more balance to trade between Japan and the EU
met with limited success. Although Japan's trade
surplus fell in 1989 and 1990, it jumped by 52
percent in 1991 to arecord ECU 22 billion. The
Comrnission presented its analysis of the problem
to the Council in 1992. In marked contrast to its
earlier report, the Comrnission now admitted that

307

"in bilateral trade, the revers al of recent trends and

the future outlook justifies concern about the possibility of reducing the serious imbalances between the Community and Japan." The Comrnission referred to the measures introduced by Japan
in 1986 and 1987 to stimulate the economy, which
increased domestic demand and fueled rapid
growth in 1988 and 1989, leading to a rapid increase in imports. Between 1986 and 1990 Japan's
current account surplus fell by 60 percent to $35.8
billion. Beginning in laie 1989, however, the
Japanese authorities tightened monetary policy to
control inflation, especially of asset prices. This
led to falling growth, causing the "bubble economy" to burst. In 1991 Japan's current account
surplus doubled to $72.6 billion.
The Commission admitted that "the challenge facing the Community will be to maintain
and develop its technical and industrial strength,
while participating fully in an open multilateral
economic system." With respect to Japan, much
had been achieved in eliminating formal barriers,
even if some remained. The Commission concluded that "the most important obstacles are now
structural in nature." Opening the Japanese market
would require "a steady haui," involving appropriate macroeconomic and exchange rate policies,
strong implementation of antitrust laws in Japan,
industrial cooperation, and trade promotion (Commission, 1992).
In March 1995 the Commission sent the
Council another communication on EU-Japan relations, which in some ways was more optimistic
than previous communications (Commission,
1995a). The Comrnission claimed to have arrived
at a "newand more focused approach," which was
"now producing results." Comparing the EU's approach with the more aggressive U.S. approach,
the Comrnission stated directly its opposition to
"unilateral trade sanctions [that are] a destabilising factor in world trade."
The Commission welcomed the Trade Assessment Mechanism (TAM), which had been introduced in 1992, and the dialogue on deregulation, which had started in 1994. These instruments
were seen as useful in solving some of the remaining market access problems. The Commission
proposed the following strategies: use the existing
dialogue on competition policy to push for more
open competition on the Japanese market, develop
industrial cooperation, improve the climate for
foreign investments in Japan, and increase Euro-

308

Japan

pean exports of services. Finally, the parties

should "make full use, where appropriate, of the
World Trade Organization."

Investments
In early 1960 Japanese investment in Europe was
only $3 million, which amounted to 1.1 percent of
total Japanese foreign direct investments. By 1968
this had reached $56 million (4 percent of the total); by 1980 the figure was almost $3.9 billion
(12.2 percent) (Sekiguchi, 1982, p. 167).
The first Japanese investments in Europe
were mainly made in support of trading activities
and went into distribution and service centers.
Japanese banks and insurance companies also established themselves in Europe. The tourist service industry, from airlines to travel agents,
quickly followed. A second phase of Japanese investment began in the early 1970s, focusing on
manufacturing. Factors influencing such investment included appreciation of the yen, rising
wages in Japan, and investment incentives in various European countries. Increasingly, as trade
frictions mounted, fear of European protectionism
became an additional factor. For instance, investments in car production in Europe were motivated
largely by the various limits imposed by several
EC member states on imports of Japanese cars
(Sekiguchi, 1982, pp. 167-173).
As a result, Japanese investments in the EC
increased significantly in the second half of the
1980s. Japanese cumulative investments from
1951 to 1989 reached almost $186.4 billion. Of
this, some $30.2 billion went to Western Europe
compared with about $75.1 billion to the United
States (Micossi and Viesti, 1991, pp. 202-203).
Japanese investments in the EC were unevenly
spread among the member states, with Britain taking the largest share (about a third), followed by
the Netherlands and Luxembourg. Economic recession in Japan since 1990 has led to a relative
decline in Japanese investments in Europe.
By contrast, European investment in Japan
has been minimal. Indeed, foreign investments in
Japan generally remain very low. It is striking that
in 1993 Japanese invested seventeen times more
abroad than foreigners invested in Japan (Ministry
ofInternational Trade and Industry, 1995, p. 196).
Formalized Dialogue and Cooperation
On the occasion of the EC-Japan summit meeting
in The Hague on July 18, 1991, a Joint Dec1aration

on Relations Between the European Community

and Its Member States and Japan was signed. In the
declaration, which followed the adoption of a similar joint EC-U.S. declaration the previous year,
both parties affinned their "common attachment to
market principles, the promotion of free trade and
the development of a prosperous and sound world
economy" and agreed on general principles and objectives of dialogue and cooperation as weIl as a
framework for such dialogue and consultations.
The parties would strengthen cooperation "in a fair
and harmonious way in a11 areas of their relations"
(Commission, 1991). Some EC member states had
wanted to inc1ude the words "balance of benefits."
In the end "equitable access" and "comparable opportunities" were the phrases agreed upon. The
framework built on the already established consultation mechanisms with regular meetings at various
levels. Under the terms of the 1991 dec1aration,
Japan and the EU now hold annual summits at the
level of the Japanese prime minister, the Council
president, and the Commission president.

Conc/usion
Difficulties in EU-Japan relations have mainly
been caused by Japan's huge trade surplus with
Europe. Japanese competitiveness vis-a-vis Europe was first based on low wages, which made
Japan competitive in labor-intensive industries. As
wages increased, capital-intensive industries, and
later knowledge-intensive industries, gave Japan
the edge. A successful strategy of export-led
growth continued in one area after another.
Japan's competitiveness is now based on product
quality and reliability. Recently the situation
seems to have eased somewhat. Japan's trade surplus with the EU fell 6.57 percent in 1993 and
17.75 percent in 1994, but remained high, at ECU
18.48 billion, in 1994. Both sides have tried to reduce barriers to trade, but residual elements of
protectionist policies and practices remain.
Bibliography
Comrnission. 1985. Commission Communication to the
Council: Analysis 01 the Relations Between the Community and Japan. COM(85) 574 final. Luxembourg: Office for Official Publications of the European Communities.
- - . 1991. Bulletin 01 the EC, 7/8-1991. Luxembourg: Office for Official Publications of the European Communities.
- - . 1992. A Consistent and Global Approach: A
Review 01 the Community's Relations with Japan.

Joint Action
Comrnunication frorn the Cornrnission to the Council. COM(92) 219 final. Luxernbourg: Office for Official Publications of the European Comrnunities.
- - - . 1995a. Europe and Japan: The Next Steps.
Comrnunication frorn the Cornrnission to the Council. COM(95) 73 final. Luxernbourg: Office for Official Publications of the European Comrnunities.
- - -. 1995b. Thirteenth Annual Report from the
Commission to the European Parliament on the
Community's Anti-Dumping and Anti-Subsidy Activities (1994). COM(95) 309 final. Luxernbourg: Office for Official Publications of the European Cornmunities.
Hanabusa, Masarnichi. 1979. Trade Problems Between
Japan and Western Europe. London: Royal Institute
of International Affairs.
Ishikawa, Kenjiro. 1990. Japan and the Challenge of
Europe 1992. London: Royal Institute of International Affairs.
Laursen, Finn, ed. 1991. Europe 1992: World Partner?
The Interna I Market and the World Political Economy. Maastricht: European Institute of Public Administration.
Micossi, Stefano, and Gianfranco Viesti. 1991. "Japanese Direct Manufacturing Investment in Europe." In
L. Alan Winters and Anthony J. Venables, eds., European Integration: Trade and Industry, pp.
200-233. Carnbridge: Carnbridge University Press.
Ministry of International Trade and Industry. 1991.
White Paper on International Trade, Japan 1994.
Tokyo: McGraw-Hill.
Sato, Hideo. 1992. "Irnplications of Gerrnan Unification
for Japan." In Paul B. Stares, ed., The New Germany
and the New Europe, pp. 365-386. Washington, DC:
Brookings Institution.
Sekiguchi, Sueo. 1982. "Japanese Direct Investment in
Europe." In Loukas Tsoukalis and Maureen White,
eds., Japan and Western Europe: Conflict and Cooperation, pp. 166-183. London: Pinter.
Tanaka, Toshiro. 1995. "EPC in World Society: The Picture frorn Japan." Hogaku-Kenkyo 68 (February), pp.
428-448.
Wilkinson, Endymion. 1990. Japan Versus the West: Image and Reality. London: Penguin.

-Finn Laursen

Jenklns, Roy (1920- )

Roy Jenkins was a prominent British Labour politician before becoming president of the European
Commission in 1977. Jenkins had been leader of
the pro-EC faction in the deeply divided Labour
Party during Britain's 1970-1971 entry negotiations, when the Conservatives were in power.
Labour leader Harold Wilson's support for a national referendum on the issue provoked Jenkins to
resign from the party's front bench. In the run-up to

309

the June 5, 1975, referendum that followed

Britain's renegotiation of membership terms, Jenkins chaired the Britain in Europe campaign.
In 1976, as Fran90is-Xavier Ortoli's term as
Commission president came to an end, the other
member states agreed that Britain, a large recent
arrival, should nominate the next president. As
much to get hirn out of Britain as in recognition of
his impeccable pro-EC credentials, the Labour
government chose Jenkins for the job. Having
spent his entire career in British politics and with
little experience of foreign affairs, Jenkins was a
Brussels outsider. Largely because he succeeded
the uninspiring Ortoli, Jenkins' arrival in Brussels
aroused inflated expectations. Yet, by his own account, his first year there was a disaster. It soon
looked as if Jenkins' Commission presidency
would be as undistinguished as any of his predecessors since Walter Hallstein.
Yet three events ultimately set Jenkins's presidency apart, although two of them had been set in
motion before he arrived in Brussels. One was
Greece's accession to the EC, which took place on
January 1, 1981. The other was the first-ever direct
elections to the European Parliament, which were
held in June 1979. Unlike these two events, the
third development that characterized Jenkins's
presidency, and helped to get the Community going
again, owed a great deal direct1y to him. This was
the European Monetary System (EMS), an initiative to establish a zone of relative monetary stability in a world of wi1dly fluctuating exchange rates.
The EMS, which eventually came into operation in
March 1979, was substantially different from what
Jenkins had originally envisioned. Nevertheless it
was to Jenkins's credit that a monetary initiative of
any kind had been taken in the late 1970s. Without
it, the single market program and the relaunch of
plans for Economic and Monetary Union in the
mid-1980s might not have happened or would certainly have been based on less solid foundations.
See also COMMISSION; EUROPEAN MONETARY
SYSTEM; UNlTED KINGDOM.

JHA

See JUSTICE AND HOME AFFAIRS.

Joint Action
A joint action is a legal instrument of the EU in
the fields of the Common Foreign and Security

310

Joint Research Centers (JRCs)

Policy (CFSP) and Cooperation on Justice and

Horne Affairs (JHA), that is, in the EU's second
and third pillars. The European Council is responsible for defining "the principles of and general
guidelines for the common foreign and security
policy" (Article J.8.1); within these guidelines, the
Council of Ministers mayadopt joint actions (by
unanimity or by qualified majority vote if this is
agreed to unanimously). A relatively small numher of joint actions have so far been taken, dealing
mosdy with a variety of international security issues. Reflecting the member states' reluctance to
abandon unanimity in the realm of intergovernmental cooperation, no joint action has been taken
by qualified majority voting. In Pillar Three, Article K.3.2(b) provides that the Council may take
joint actions in the area of Justice and Horne Affairs "in so far as the objectives of the Union can
be attained better by joint action than by Member
States acting individuallyon account of the scale
or effects of the action envisaged" (this is a classic
statement of subsidiarity). So far, the Council has
taken even fewer joint actions in JHA than in
CFSP.
See also COMMON FOREIGN AND SECURITY
POLICY; JUSTICE AND HOME AFFAIRS.

Joint Research Centers ORCs)

Joint Research Centers (JRCs) are EU-funded

centers and institutes for scientific research and
development. JRCs are located in four places-Ispra, Italy; Geel, Belgium; Petten, the Netherlands;
and Karlsruhe, Germany. In 1989 they were reorganized into nine units: the Institute for Transuranium Elements (Karlsruhe), the Central Bureau
for Nuclear Measurement (Geei), the Institute for
Advanced Materials (Petten), and the Environment Institute, Institute for Systems Engineering,
Institute of Safety Technology, Institute for Remote Sensing Applications, Institute for Prospective Technological Studies, and the Centre for Information Technologies and Electronics (Ispra).
JRCs are administrated by an independent board
but are accountable to the Commission.

IOULE
The JOULE program prornotes pure research on
the use of nonnuclear energy and renewable energy sources, such as solar energy, windpower,
and biomass energy, under the EU's research and

technological development policy. THERMIE, a

companion prograrn, prornotes the application of
such research. JOULE focuses on four areas: the
rational use of energy, renewable energy sources,
fossil fuels, and the dissemination of energy technology.

IRCs

See JOINT RESEARCH CENTERS.

lustlce and Home Affalrs OHA)

Cooperation on Justice and Horne Affairs (JHA) is

incorporated in Tide VI (the so-called third pillar)
of the Treaty on European Union (TEU), which
was signed on February 7, 1992, in Maastricht and
entered into force on November 1, 1993. Tide VI
was preceded by aperiod of purely ad hoc intergovernmental cooperation by the memher states of
the EC, covering policy areas such as immigration, asyl um, policing, and judicial cooperation.
For example, in 1976 member states set up the socalled Trevi Group to counter terrorism and to coordinate policing by means of intergovernmental
cooperation, without involving either EC or national institutions. With the adoption of the Single
European Act in 1987, such purely intergovernmental cooperation acquired a Community objective: the accomplishment of the internal market,
including the free movement of persons.
The corollary of removing internal border
controls within the EU, wh ich has not yet been
fully realized despite the expiry of the 1992 deadline, is the development of more intensive interstate cooperation in the fields of asylum, customs,
and policing. The Palma Document (1989), which
charged the Trevi Group with external border security coordination, stimulated closer Europeanlevel justice and police cooperation, leading ultimately to the inclusion of Title VI in the TEU.
Thus, the latter constitutes the culmination of a
process of formalizing intergovemmental cooperation and encompasses a permanent structure of
working groups and decisionmaking procedures
for the areas of "common interest" referred to in
Article K.1. As a result of such consolidation and
institutionalization, member states have assumed
an obligation to cooperate, in contrast with the
theoretically "reversible" process of purely ad hoc
intergovernmental cooperation that prevailed in
the preceding period.

justice and Horne Affairs (JHA)

The institutions of the EU do not function in

the same manner in the context of third pillar cooperation as within the context of the first pillar
(EC policies and activities). Moreover, the institutional balance prescribed in Article 4 of the EC
treaty has no equivalent in the third pillar. It is
striking that the central place in the institutional
setup provided for in the third pillar is without
question reserved to the Council of Ministers. It is
within the Council that the "Member States shall
inform and consult one another ... " in the areas of
the third pillar with a view to coordinating their
action. To that end, "they shall establish collaboration between the relevant departments of their administration" (Article K.3[l)). In a strict trias politica model of decisionmaking, the Council
would be directly accountable to a democratically
elected body of representatives. Moreover, the
power to legislate (including the right of initiative)
would reside not only with the Council but also
with a parliamentary body.
Of course a strict separation of powers as in
national constitutional systems does not prevail either in the EC system. But the unique system of
checks and balances in the EC is assured in part
by the fact that the right to initiate legislation is almost exclusively reserved to the Commission.
This important guarantee of action in the common
interest is damaged by the system of shared initiative with the member states or even, in some instances, the exclusive right of initiative enjoyed by
member states that was introduced in the third pillar. Moreover, within the fIrst pillar the European
Parliament (EP) is gradually acquiring apower of
co-decision (Artic1e 189b) to counterbalance the
legislative power of the Council. According to the
provisions of Article K.6 in the third pillar, the EP
only has the right to be consulted ex post facto.
National parliaments have no institutionalized role
in this context either.
One of the most striking features about intergovernmental co operation in the context of the
third pillar, therefore, is the fact that member
states acting within the framework of the Council
take decisions in the policy areas referred to in Article K.l in a "democratic void" and in the context
of a decisionmaking system shorn of any notion of
separation of powers. Areas previously within the
remit of national parliaments and national courts
are now being decided upon at the European level
behind closed doors, without effective parliamentary input---either European or national-and

311

with no effective mechanism to ensure the application of the rule of law. Given the sensitive nature of the subject matters under consideration in
the context of third pillar cooperation and the fact
that they concern and affect the rights and interests of individuals, the existence of an accountability defIcit, a transparency defIcit, and a rule of
law deficit can be viewed as an insult to democracy.
Aeeountability Defieit
In the current institutional setup of the intergovemmental third pillar (i.e., before implementation
of the Amsterdam Treaty), a major accountability
deficit emerges. The dominant role of the Council
in decisionmaking is reinforced by a stratified decisionmaking structure composed of the Committee of Permanent Representatives (see Article K.8
of the TEU and 151 of the EEC treaty), the KA
Committee, three steering groups, and an enormous number of working groups. Both the steering groups and the working groups are directly accountable to the so-called K.4 Committee (named
after Article K.4), there being no direct link between steering groups and working groups. The
KA Committee, a coordinating committee consisting of senior civil servants, may deliver opinions either at the Council's request or on its own
initiative. At the level of the Council, decisions are
formally taken by unanimity. At the lower levels,
in the event of an impasse, draft decisions are often forwarded to the next political level in the
hope that an agreement can be reached there. For
example, this tactic has been used in the working
group on police cooperation to obtain an agreement on cooperation between the EU and the European Network of Forensic Science Institutes.
The Council (including underlying structures) is supported by a general secretariat in
Brussels (Article 151.2), whose main tasks in the
third pillar are to support the Council presidency
in the various meetings and to function as the 10gistical backup for a number of clearinghouses,
notably the Center for Information, Discussion,
and Exchange on Asylum (CIREA), and the Center for Information, Discussion, and Exchange on
the Crossing of Borders and Immigration
(CIREFI). But the general secretariat is gradually
strengthening its own institutional position by expanding its tasks and sometimes taking initiatives
independently of the member states, for example,
in the field of combating organized crime. As the

312

Justice and Horne Affairs (JHA)

general secretariat is an autonomous body not accountable to any of the other actors in JHA cooperation, this is a serious antidemocratic development.
Although for the first time some EC institutions were given specific roles in what had hitherto consisted almost entirely of ad hoc intergovernmental cooperation, the role played by the
various other EC institutions in the context of the
third pillar has been seriously diluted as compared
with their role in the first pillar. Despite the appointment of a commissioner for JHA, who is supported by a task force consisting of European and
national civil servants, the Commission's involvement in JHA is severely curtailed. The Commission enjoys no right of exc1usive initiative of proposals for action: with regard to the policy areas
enunciated in paragraphs 1-6 of Artic1e K.I, its
right of initiative is shared with the member states,
and it enjoys no right of initiative whatsoever with
regard to the other policy areas. The absence of a
right of initiative in the field of judicial cooperation in criminal matters was apparent in the Commission proposal for a convention on the protection of the EU's financial interests, intended to
combat fraud. Due to lack of competence, the
Commission did not complete Title m concerning
Iudicial Cooperation Between Member States,
and left the initiative in that regard with the Council. Moreover, the institutional protection guaranteed in the EC system by the provision that Commission proposals can only be amended by
unanimity in the Council (Artic1e 189a and c) is
entirely absent in the third pillar.
In practice it is the member state holding the
presidency that has presented the texts and taken
the initiatives in the context of third pillar activity,
the Commission apparently preferring the tactic of
issuing vague "communications" on general policy areas (e.g., drugs and fraud). In 1996, however, the Commission acquired a significant role
in the assignment of EC budgets for activities under the third pillar, inc1uding activities in the field
of customs, police, and trafik in human beings,
areas in which the Commission has no role whatsoever according to the provisions of the third pillar itself. It is up to the Coullcil to decide which
budget is charged with the operational expenditure
of internal cooperation (Artic1e K.8.2).
With regard to the accountability of the
Council as such to parliamentary bodies, there is a
serious deficit. The EP plays no role whatsoever in

the JHA decisionmaking process, simply being informed ex post facto of decisions taken by the
Council (Artic1e K.6). As a result, the EP has not
been able to take a position on draft proposals or
to influence, however informaIly, the decisionmaking process. The general practice seems to be
that the EP gets the relevant documents some days
after their adoption and so is confronted with a
fait accompli. Even with the adoption of draft conventions (Artic1e K.3), the practice has developed
that the Council presidency submits to the EP legislative texts of often important (and controversial) subjects at a very late stage (as happened for
example in the case of the European Police Office
[EUROPOL] treaty). The EP has the right to address questions and recommendations to the
Council and, more important, a budgetary power
in the event that the member states decide to finance policy activities out of the EC budget.
National parliaments may fulfill an important
function in c10sing the accountability deficit in
two ways: first, by effecting an exchange of information with the parliaments of the other member
states on third pillar subjects; second, by means of
a parliamentary formal assent procedure introduced at the national level. The intensity of these
powers may vary from an ex post right to be informed of the measures already taken to the power
to bind government ministers with a mandate prior
to decisiontaking (as is the Danish situation on EC
maUers). The Dutch have a procedure whereby,
before a vote in the Council, the parliament may
instruct the national minister whether or not to
agree to a decision under the third pillar that could
legally bind the Kingdom of the Netherlands (part
ofthe statutory law ofDecember 17,1992). Even
this potentially far-reaching procedure does not
work all that weIl in practice: owing to translation
problems in the EU, documents are almost never
available to the Dutch parliament in time (fifteen
days in advance) but arrive in general a few days
before the Council meeting takes place. Moreover,
they are almost never translated into the Dutch
language (Curtin and Pouw, 1995, p. 27).
The Transparency Defieit
The lack of accountability is accentuated by two
additional factors (Curtin and Meijers, 1995).
First, decisionmaking takes place behind c10sed
doors: meetings of the Council and underlying
structures are not open to the public, nor are the
minutes or supporting documents made available

Justice and Horne Affairs (JHA)

313

to the public under the rules governing access to

documents that operate in other EU areas. Some
rather scanty information is, however, provided as
to policy programs. In particular since the Irish
presidency of the Council in the latter part of
1996, the practice has developed of issuing a multiannual working program for third pillar cooperation. This provides the public with some knowledge of the approach that various presidencies
intend to follow for aperiod of two years.
Second, initiatives (draft decisions, conventions, and so on) taken by the presidency have so
far never been published, and decisions (K.3 instruments, conventions, and so on) tend to be published a substantial time after the text has been
agreed upon. For example, it was only in 1996,
some years after many had been taken, that the
Council decided to publish a whole list of decisions based on Article K.3 relating to asylum and
immigration policy. A resolution on law enforcement requirements, passed on January 17, 1995,
was published in the Official Journal in the fall of
1996. Ironically, many such documents had already been released in the press communications
of the Council secretariat. In sharp contrast, most
Commission proposals in this field are systematically published in the Official Journal and se nt
immediately to the EP.

"single institutional framework," the British govemment, for example, declared to the upper house
of its own parliament (which had stressed the necessity of a role for the ECJ in very unequivocal
terms) that "a very strong practical justification
would be needed to override [the govemment's]
basic presumption against involving the Community institutions in an intergovernmental agreement" (letter from the Horne Office of May 31,
1995). To confer jurisdiction in regard to third pillar conventions on the ECJ, whose main responsibility and expertise is to uphold and develop Community law is, in this restrictive approach, to risk
blurring the important legal distinction between
the first pillar and the two intergovemmental pillars. This attitude has resulted in the practice of including, in aseparate optional protocol attached to
some international agreements (e.g., the EUROPOL Convention, Customs Information System Convention, and Convention on the Protection
of the Financial Interest of the EC), a right for the
ECJ to give prelirninary rulings. A general role for
the Court under the third pillar was therefore considered an important reform issue at the 19961997 intergovernmental conference (IGC). (lndeed, the revamped third pillar in the Amsterdam
Treaty assigned a larger role to the ECJ and also to
the EP.)

The Rule of Law Defieit

Article L of the TEU explicitly excludes the European Court of Justice (ECJ) from playing a general supervisory role over decisions taken in the
context of the third pillar. The ECJ's involvement
is only possible in the context of K.3 conventions,
and even then only pursuant to unanimous agreement among the member states in individual cases
(K.3.2[c]). This situation has proved to be one of
the most controversial points in practice, with certain member states adopting a strongly dogmatic
line to the effect that any involvement whatsoever
by the ECJ in the interpretation and/or resolution
of disputes arising in the context of K.3 conventions would contaminate the intergovernmental
nature of all activity in the third pillar. In other
words, it would allow the introduction into the intergovemmental sphere of central tenets of Community law, such as the (expansive) principles of
interpretation.
Despite the clear possibility that Article K.3
contains for recourse to the ECJ, and the laudatory
terms of Article B of the TEU stressing the EU's

Legal Instruments
One of the most striking features of the intergovemmental cooperation that has taken place to date
is the extreme paucity of instruments actually
adopted as provided for in the relevant provisions
of the third pillar. The Council clearly prefers to
resort to the classic nonbinding instruments of intergovemmental cooperation (resolutions, conclusions, recommendations) rather than to the novel
instruments contained in Article K.3, which might
putatively be considered as enjoying legally binding effects. The practice appears to be that when
the Council, KA Committee, and working groups
draft proposals, they choose the legal form likely
to encounter the least objections from member
states.
The Council is empowered by Article K.3 (2)
to adopt joint positions and promote cooperation
contributing to the objectives of the EU, using the
appropriate procedures; to adopt joint actions or
draw up conventions; and to decide (unanimously)
on the application of Article IOOc of the Rome
treaty-visa policy-in the areas referred to in Ar-

314

Justice and Home Affairs (JHA)

tic1e K.l (paragraphs 1-6) of the TEU and to determine the relevant voting conditions relating to
it. Although the treaty is silent on the question of
the binding nature of forms of cooperation other
than "conventions," such as "joint positions" and
"joint actions," in all cases the product of cooperation under the third pillar is governed by public international law. Accordingly, the question of
whether or not an act is legally binding depends
upon the intention of the parties and the terms of
the act itself.
Fields of Policymaking
The subject matter of the third pillar traditionally
belongs to the realm of state sovereignty. Government involvement in such areas started during the
nineteenth century with policymaking in the fields
of crime prevention, border protection, and control over the admission of foreigners to the national territory. Cooperation with other countries
in these fields, and in particular the transfer of
powers to the EC, was considered highly sensitive. Member states remain attached to their own
traditions, values, and policies, a fact acknowledged by the intergovemmental method of policymaking on the nine "matters of common interest"
enumerated in Artic1e K.l of the TEU. The areas
listed in K.l are therefore considered "matters of
common interest" to the extent that they do not
fall under the competence of the EC. As a result of
a highly complex division of powers between the
EC and the third pillar, a number of policy fields
have a hybrid character in terms of possible legal
basis (Community and intergovernmental)-for
example, visa policy (Artic1e lOOc of the Rome
treaty), drug policy (Artic1e 129 of the Rome
treaty), and combating fraud (Artic1e 209a of the
Rome treaty).
Asylum, extern al borders, and immigration
(steering group I). Steering group I is concerned
with asylum policy (K.l.l), external borders
(K.l.2), and immigration policy (K.l.3), areas that
the European Council, meeting in Thrin on March
26, 1996, indicated could be transferred to the first
pillar with the use of the passerelle (gateway) provision of Artic1e K.9. The Commission's proposal
at the 1996-1997 IGC to transfer these fields to
the first pillar suggests that the Commission had
dropped its earlier reservations in that regard. Indeed, in its draft treaty of December 5, 1996, the
Irish presidency adopted this suggestion to a substantial extent in a section on the free movement

of persons, asylum, and immigration, which was

inc1uded in the Amsterdam Treaty.
Asylum policy has developed along three
parallellines. It started off in 1990 with the signing of the Dublin convention, a treaty that was not
ratified for a long time by one laggard: the Irish
Republic. Finally, the European Council, meeting
in Amsterdam on June 16 and 17, 1997, welcomed
the completion of the ratification procedures that
allowed the convention to enter into force by September 1, 1997. In practice the most important
provision in the Dublin convention is that the
country through which an asylum seeker enters
the EU remains responsible for processing the
asylum request. Application ofthe Dublin convention will depend on the possibility in practice of
tracing asylum seekers in other member states.
Accordingly, a draft convention is under discussion that would establish a center for the exchange
of fingerprints at the European level (EURODAC). The Council has adopted several other
flanking documents to implement the Dublin convention (Official Journal, EC 1996 C 274, pp. 35,
42,44), such as a document containing means of
proof in the framework of the Dublin convention,
the form of a laissez-passer for the transfer of an
asylum applicant from one member state to another, and a standard form for deterrnining the
member state responsible for examining an application for asylum.
A second development relating to asylum
policy has been the adoption by JHA ministers of
several resolutions and conc1usions to attempt to
counteract the enormous flow of asylum seekers
entering the EU in the beginning of the 1990s. A
few of the measures, relating to the adoption of
minimum requirements for asylum procedures
and to bilateral readmission agreements, have
been published (Official Journal, EC 1996 C 274,
pp. 13, 20, 25). The third development was the decision by immigration ministers, meeting in Lisbon on June 11 and 12, 1992, to establish CIREA,
to collect and provide information on asylum legislation and practices in different member states,
and to draft common reports concerning the situation in third countries. CIREA reports twice a year
to the Council; its second report was published in
1996 (Official Journal, EC 1996 C 274/55).
Decisionmaking in the field of external border controls is slowed down considerably by a dispute between Spain and the UK over the status of
Gibraltar. The Commission tried to break the im-

justice and Horne Affairs (JHA)

passe by initiating a new draft convention in 1994

(Official Journal, EC 1994 C 11/8), but no substantial progress has been made. The same problem is also preventing the adoption of the draft
European information system convention (closely
linked in terms of substance to the draft external
border convention).
Immigration policy and policy concerning
third country nationals can be divided into three
separate aspects (see Article K.l, sub 3 a-c). First,
with respect to the conditions of entry and movement in the EU of nationals of third countries, there
is a clear connection with Article lOOc of the Rome
treaty, which regulates a few formal aspects of a
common visa policy (Official Journal, EC 1995 L
164/1, and Official Journal, EC 1995 L 234/1). The
substantive criteria are to be formulated in the context of the third pillar (e.g., the recommendation
concerning local consular cooperation regarding
visas). Second, the conditions of residence of third
country nationals in the territory of a member state,
including farnily reunion and access to employment, have so far been regulated by four resolutions
(see Official Journal, EC 1996 274, pp. 3, 7, 10,
and Official Journal, EC 1996 C 80/2) that contain,
on the one hand, measures on lirnitations on admission of third country nationals for employment, for
purposes of pursuing activities as self-employed
persons, and for study purposes, and, on the other
hand, measures on the status of third country nationals resident in the EU on a long-term basis.
Third, the combating of unauthorized immigration,
residence, and work by third country nationals in
the territory of the member states has had the attention of the member states since 1994, when they established CIREFl for information exchange concerning illegal border crossing and immigration
(Official Journal, EC 1996 C 274, p. 50). In 1994
the Council also adopted a uniform model for the
expulsion of third country nationals (Official Journal, EC 1996 C 274, p. 18). As measures adopted in
the field of immigration are almost entirely restricted to classic nonbinding instruments, the
Council adopted resolutions in 1995 and 1996 on
monitoring the irnplementation of these measures.
Cornbating international crirne (steering
group 11). Steering group 11 deals with combating
drug addiction (K.1.4), combating fraud on an international scale (K.1 .5), customs cooperation
(K.1.8), and police cooperation for the purposes of
preventing and combating terrorism, unlawful
drug trafficking, and other serious forms of inter-

315

national crime. Police cooperation includes, if

necessary, certain aspects of customs cooperation
in connection with the organization of an EU-wide
system for ex chan ging information within
EUROPOL (K.1.9).
Combating drug trafficking and drug addiction was a central theme of the Irish presidency in
the last half of 1996. Several decisions taken at that
time were so sensitive that they required deliberations at a high political level. Following a Belgian
initiative, several decisions were also taken in the
field of combating trafficking in human beings and
the sexual exploitation of children. The European
Council, meeting in Dublin on December 13 and
14, 1996, gave a mandate to reinforce actions to
combat international organized crime. As a result,
a high level group was established to report on this
situation during the Dutch presidency in the first
half of 1997. Thus far the most important decision
of the Council in combating organized crime is
probably the establishment of EUROPOL and the
EUROPOL Drugs Unit (EDU) in The Hague. The
main function of the EDU is to exchange criminal
information between member states through national liaison officers. The future EUROPOL will
also have a database containing information and
intelligence that can be used, for example, for
analysis purposes. This organization is likely to become more and more important in the near future
once the EUROPOL convention comes into force.
Moreover, EURO POL has been given a substantive role with respect to a number of recent decisions, for instance, the exchange of information on
the chemical profiling of drugs (Official Journal,
EC 1996 L 322/5) and the creation and maintenance of a directory of specialized competences,
skills, and expertise in the fight against international organized crime (Official Journal, EC 1996
L 342/2).
Judicial cooperation (steering group 111). Finally, steering group m covers judicial cooperation in civil matters (K.1.6) and criminal matters
(K.l. 7). To strengthen both areas of cooperation,
the Council adopted a joint action concerning a
framework for the exchange of liaison magistrates
(Official Journal, EC 1996 L 105/1) and the
Grotius program of incentives and exchanges for
legal practitioners (Official Journal, EC 1996 L
287/3). Cooperation in civil matters on the basis
of Article K.l.6 mainly concerns the drafting of
conventions. Work is underway on amending the
EEC execution treaty and on a draft convention

316

Justice and Horne Affairs (JHA)

simplifying the distribution of judicial documents.

Cooperation on the basis of Article K.l. 7 has so
far been fruitful. Although the drafting of a convention for mutual assistance in crirninal matters
is a priority, several decisions have already been
taken in such areas as the protection of EC financial interests (Official Journal, EC 1995 C 316),
individuals who cooperate with the judicial
process in the fight against international organized
crime (Official Journal, EC 1997 C 1011), and
sentencing for serious illicit drug trafficking (Official Journal, EC 1997 C 10/3).
The IGe and Amsterdarn Treaty
One ofthe major tasks entrusted to the 1996-1997
IGC was strengthening the EU's capacity to act in
the area of justice and horne affairs. There were
two main issues for consideration: first, which of
the matters covered presently by the third pillar
should be transferred to the first pillar; second,
what means were there of improving the effectiveness of action for those areas that would remain
within the intergovernmental framework of the
third pillar. The Amsterdam Treaty accepted that
the issues of asylum, visa, immigration policy, and
external border controls should be transferred to
the first pillar, thereby allowing for the possibility
of qualified majority voting in certain circumstances, and a greater role for the EP. In addition,
the transparency deficit should be reduced because the Commission's right of initiative would
ensure that draft legislation was at least published
in advance of decisionmaking.
With regard to those areas not transferred to
the first pillar (in particular, criminallaw), reform
includes measures to address the accountability
gap (inforrning the EP before decisions are taken;

institutionalizing a role for national parliaments);

the transparency deficit (publishing draft decisions in the Official Journal as a matter of course
and inforrning parliaments-both national and
European-well in advance of final decisionmaking); and the rule of law deficit (giving a general
overseer function to the ECJ). Moreover, reform
entails clarifying the types of legal instruments
that could be adopted in third pillar policy fields
and their putative legal effects. Decisionmaking
procedures are also simplified, notably by reducing the number of decision making levels. Finally,
the Schengen agreement was brought into the acquis communautaire in order to avoid the risk of a
further growth of this "parallel system" and in order to bring the progressive elements of Sehengen
into the EU framework.
See also COUNCIL OF MINISTERS; K.4 COMMITIEE; IMMIGRATION POLICY.

Bibliography
Curtin, D. M., and H. Meijers. 1995. "The PrincipJe of
Open Government in Schengen and the European
Union: Democratic Retrogression?" Common Market Law Review 32, pp. 391--442.
Curtin, D. M., and J.EM. Pouw. 1995. "La cooperation
dans Je domaine de Ja justice et des affaires interieures au sein de I'Union europenne: une nostalgie d'avant Maastricht?" Revue de Marche Unique
Europeen 3, pp. 13-34.
Dehousse, E, and L. van den Ende. 1996. "PJaidoyer
pour Ja reforme du troisieme piJier." Revue du
MaTChe commun er de /'Union Europeenne 403.
Muller-Graff, P. C. 1994. ''The Legal Bases ofthe Third
Pillar and Its Position in the Framework of the Union
Treaty." Common Marker Law Review 31, pp.
493-510.

-Deirdre Curtin and Franciska Pouw

K
K.4 Commlttee
Named after the relevant provisions of Pillar
Three (Justice and Horne Affairs) of the Treaty on
European Union (TEU), the KA Committee coordinates the work of the Justice and Horne Affairs
ministers, dealing with terrorism, drug trafficking,
and immigration. The KA Committee superseded
the Group of Coordinators, which had dealt with
such issues before their incorporation into the EU.
Also under the TEU, the Committee of Pennanent
Representatives (COREPER) was given final official responsibility for the K.4 Committee's work.
This was unwelcome to the KA Committee, as
was the attempt to integrate some of the committee's subordinate working groups. A compromise
between COREPER and KA coordinators gave
the final voice to COREPER on the understanding
that in nonnal circumstances the KA Committee's
recommendations would prevail.
See also JUSTICE AND HOME AFFAIRS.

KALEIDOSCOPE
Building on general EC support for cultural events
over many years, the EU launched the KALEIDOSCOPE program in March 1996 to encourage
multilateral cooperation (i.e., participation from at
least three member states) in creative projects or
cultural events as weIl as improvement of the
skills of young creative or performing artists.
Most of these activities are on a relatively small
scale, with the EU's contribution (up to 50 percent
of the total) having an upper limit of ECU 50,000.
Yet some larger-scale activities are also covered,
inc1uding a number of preexisting projects, such
as the European Community Youth Orchestra, the

European City of Culture, and the European Cultural Month.

See also CULTURAL POLICY.

Kangaroo Group
Fonned in 1979, the Kangaroo group is a crossparty group of members of the European Parliament (EP) who share a commitrnent to market integration and European unity. The group's name
refers to the members' determination to overcome
national barriers to trade. The group was influential in supporting the EP's Draft Treaty Establishing the European Union (1984) and the subsequent single market program.
See also SINGLE MARKET PROGRAM.

KAROLUS
To promote greater understanding of EC law and
practice and thereby facilitate implementation of
the single market pro gram, in 1992 the EC
launched the KAROLUS exchange program for
national officials responsible for market integration. The program is especially aimed at those
working on standards, testing, and certification;
public procurement; supervision of banks, insurance companies, and stock exchanges; regulation
of transport; operation of statistical programs; and
the free movement of persons.
See also IMPLEMENTATION; SINGLE MARKET
PROGRAM.

Klrchberg Declaratlon
Issued by leaders of the Western European Union
(WEU) on May 9,1994, at a meeting in Kirchberg,
Luxembourg, the so-called Kirchberg Dec1aration
established categories of WEU membership and
association. The four categories are full members
(who are also members of NATO and the EU), associate members (who are also members of NATO
but not the EU), associate partners (who are neither
NATO nor EU members), and observers (who are
also EU but not NATO members).
See also WESTERN EUROPEAN UNION.

Kohl, Helmut (1930- )

Gennany's longest-serving postwar chancellor and
the most influential head of government in the EU,

317

31 8

Kohl, Helmut (7930- )

Helmut Kohl was born in Ludwigshafen on April

3, 1930. The date and place of birth conditioned
much of his subsequent views on Europe. As a
teenager he experienced the trauma of the Third
Reich and its shaming defeat. Ludwigshafen's 10cation as a border region on the Rhine also meant
that he was caught up in the Franco-German relationship as it developed after 1945. After studying
at the University of Heidelberg, Kohl entered political life. He became the youngest member of the
state parliament in the Rhineland Palatinate in
1959, the youngest state parliamentary leader in
1963, minister-president in 1969, chairman of the
Christian Democratic Union (CDU)/Christian Social Union (CSU) parliamentary party in 1976, and
the youngest chancellor in 1982. Somewhat paradoxically, given this record of almost continual
success, he was consistently underestimated, especially in comparison to his more obviously brilliant
rival, Helmut Schrnidt, leader of the Social Democratic Party (SPD) and chancellor of Germany
from 1974 to 1982.
Helmut Kohl played the central role in securing German unity. His ten-point plan ofNovember
28, 1989, put German unity on the international
agenda and established the federal govemment as
the prime actor in the process. Kohl's most important individual contributions were keeping the
continuous support of U.S. president George
Bush, negotiating Soviet agreement to continued
German participation in NATO, and winning East
Germany's first and last free elections, in March
1990, very convincingly. Kohl was also able to use
the fact of unity to acce1erate progress toward
deeper European integration.
After assuming the chancellorship in October
1982, Kohl reestablished European integration as
Germany's central priority, in contrast to the Brandt
and Schmidt periods (1969-1982), during which
integration had sometimes been eclipsed by Ostpolitik and when Schrnidt, in particular, had shown
little enthusiasm for supranational solutions. Kohl's
support for supranationalism represented a reversion to the policy of Konrad Adenauer, the first
chancellor of the Federal Republic. Kohl signaled
the change of policy priorities by visiting Paris and
Brussels within a week of his advent to power. Yet
in his early years as chancellor, Kohl's European
policy was largely declaratory, as he was preoccupied with the contentious domestic debate on the
stationing of Pershing missiles in Germany. However, he used these years to cultivate a elose rela-

tionship with French president Fran~ois Mitterrand.

Kohl and Mitterrand were both committed integrationists, who envisioned the Franco-German relationship as the motor of integration.
Progress in this direction was initially very
slow, given the EC's intergovemmental character
in the early 1980s. Moreover, the first real German
initiatives to revive the EC-the GenscherColombo proposals and the resulting Stuttgart
Deelaration-were identified with the Free Democratic Party, the CDU/CSU's junior coalition partner. The British budgetary question remained a serious obstaele in the way of further progress, and
much effort was devoted to its removal, which
Mitterrand finally accomplished at the Fontainebleau summit in lune 1984. Kohl and Mitterrand
were weIl aware of British prime minister Margaret Thatcher's opposition to further integration
and, given that unanimity was the norm in EC decisionmaking, had to bide their time and not invest
too much effort in launehing schemes for deeper
integration in the early 1980s.
Finally, at the Milan summit in lune 1985, a
Franco-German proposal was put forward for a
draft treaty on European union. Despite its ambitious title, which reflected the European Parliament's plan of the previous year, it was a fairly
modest document that concentrated, like the
Stuttgart Dec1aration, on an extension of European Political Cooperation, the member states'
foreign policy coordinating mechanism. The proposal's force had in any case been weakened by
Germany's use of a veto in the agriculture council
only a month earlier. Considering that the draft
treaty envisaged an extension of qualified majority
voting (QMV) in the council, the use by Germany
of a veto for the first time did much to underrnine
Germany's position at the summit.
But soon the elimate for realizing Kohl's vision of integration improved dramatically. A major catalyst was the Single European Act (SEA) of
1986, which introduced QMV for a majority of
single market program directives. As Kohl anticipated, the use of QMV proved contagious. Thus,
although unanirnity remained the rule for institutional change, it was now embedded in a Community where majority voting was frequent and the
price of isolation potentially high. The capacity of
a single state to block progress was thus dramatically reduced.
If the SEA provided the potential for further
progress, it was the prospect and eventual achieve-

Kohl, Helmut (7930-)

ment of Gennan unity that paved the way for farreaching change. Kohl's reaction was to embrace
and accelerate unity but also to insist that a united
Gennany must be anchored in a much more
deeply integrated Europe. Gennan unity was accomplished at breathtaking speed between the fall
of the Berlin Wall on November 9, 1989, and October 3, 1990. Progress toward anchoring Germany in a deeper Europe began even during the
talks on unity. After a short period when Mitterrand appeared to return to a balance-of-power approach, he reached the conc1usion that Gennan
unity was inevitable and opened the way at the
Strasbourg summit in December 1989 for the series of events that led to the convening of intergovemmental conferences (IGCs) on Econornic
and Monetary Union (EMU) and political union.
In the period leading up to the IGCs, Kohl
stressed the necessity for progress on political
union, especially in tenns of the development of a
Common Foreign and Security Policy and
strengthened powers for the European Parliament.
In a speech in Edinburgh in May 1991, Kohl
launched the idea of a supranational police agency
(EUROPOL) that would be able to operate without hindrance in all the member states in matters
such as the fight against organized crime and drug
dealing. The outcome of the IGe itself was thus a
disappointment to Kohl. Although significant
progress was made on EMU, there was little
progress on EUROPOL and on political union.
In the years since the Treaty on European
Union, Kohl has become even more central to European integration, given the dernise of Mitterrand, Spanish prime minister Felipe Gonzalez,
and Comrnission president Jacques Delors. As
chancellor of the EU's eastemmost state and the
EU's most experienced statesman, Kohl dominates the politics of European integration in a way
that has only been equaled by Charles de Gaulle.
Kohl's primary efforts are now aimed at securing the realization of EMU, a goal to which

319

he attaches the greatest importance. Although

public opinion in Gennany has consistently been
unenthusiastic about EMU, opinion polIs also report a high level of trust in Kohl's handling of
European policy. To that extent, it is still possible
to talk of a pennissive consensus in Gennany toward the EU, which Kohl is detennined to use to
achieve a single currency. The failure of the
SPD's ill-conceived attempt to exploit public opposition to EMU in order to defeat the CDU has
been taken as an indication that Kohl will probably succeed.
Apart from making progress on justice and
horne affairs, Kohl is also concemed to promote
the eastem enlargement of the EU and has elevated Gennan-Polish relations to a personal priority, on a par with the defining Franco-Gennan relationship. In contrast to EMU, however, it seems
unlikely that Kohl will be able to use his position
as chancellor to see enlargement successfully conc1uded, given its Ion ger time horizon. Although
Kohl will run in the federal election in September
1998, it is likely that, if e1ected, he will not complete the full four-year tenn. If he did so, he would
have overtaken Bismarck as Gennany's longestserving chancellor.
In its core commitment to supranationalism,
Kohl's vision, inherited from Adenauer and sometimes called the Rhineland position, incorporates
the impact of Gennany's traumatic history from
1871 to 1945. Yet this vision is increasingly seen
to be less self-evident in Gennany today than it
was in the decades until reunification in 1990.
Kohl's contribution to bringing about Gennan
unity is already recognized. On Europe his vision
is more contes ted. Indeed, whether the Federal
Republic will c1eave to a Rhineland position on
Europe will depend in large measure on the realization of EMU.
See also GERMANY.
-Wilie Paterson

L
Lamers Paper
The so-called Lamers paper was a policy paper of
the governing Christian Democratic Union in Germany written by Karl Lamers and Wolfgang
Scheuble in September 1994. The paper was controversial because it advocated differentiated integration in the EU and identified the member states
that should form the hard core: France, Germany,
Belgium, the Netherlands, and Luxembourg (i.e.,
the EC's original six member states minus Italy).
See also GERMANY.

Latln Amerlca
The historical and cultural relationship between
Europe and Latin America is long-standing and
profound. From the initial "encounters" of Spanish
and Portuguese explorers in the late fifteenth century to the present day, each region has been influenced by the activities and aspirations of the other.
Latin America inherited from Europe its conception
of the nation-state, predominant religious traditions, political and economic philosophies, and legal systems. Demographics have also facilitated
greater interregional interaction. In the Southern
Cone, Argentina, Uruguay, and Chile have many
citizens who trace their ancestry to Italy, Germany,
Spain, Portugal, and Britain. Bach region is populous enough to constitute an attractive market for
the other. The EU encompasses 372 million potential customers; Latin America's population is even
larger, at 445 million (exc1uding the Caribbean). Finally, in the twentieth century, both European and
Latin American states have had to deal with the
United States on a number of levels, and at times
each has viewed the other as a "counterweight" to
U.S. economic and diplomatic influence.

These legacies have certainly shaped the economic and political relationship. Europe is Latin
America's second-largest trading partner after the
United States. Twenty-three percent of the area's
exports and imports have a European connection.
In contrast, the United States is the target of 41
percent of Latin America's exports and the source
of 45 percent of its imports. Latin America is also
increasingly attractive to foreign investment. In
this regard, Europe is again second only to the
United States in levels of investment, with 37 percent of European investment located in the region,
compared to 47 percent for the United States. In
some cases, European investment outstrips that of
the United States, particularly in Argentina and
Brazil. Forty percent of Latin American external
debt is held by European financial institutions,
nearly twice the level held by U.S. banks (Friscia
and Simon, 1995). The EU disburses $500 million
in development assistance to Latin American
countries each year (Smith Perera, 1995, p. 106).
Politically and culturally, European socialist, social democratic, and Christian democratic parties
have enduring ties with their Latin American
counterparts, and there is an expanding web of interregional interaction among a myriad of nongovemmental organizations.
Shared affinities, however, have failed to
overcome other factors that have reduced the importance of Latin America to EU countries. The
economic relationship has been limited by differing levels of development within and between the
regions. Moreover, EU preoccupation with its own
integrative experiment and its links with former
colonies in Africa, Asia, and the Caribbean as wen
as policies such as the Common Agricultural Policy (CAP) have served to limit Latin America's
access to European markets. On the other side of
the Atlantic, nationalist and protectionist orientations of Latin American governments, a lack of
export diversification, and the region's heavy burden of foreign debt have reduced opportunities for
trade and investment. In politico-military terms,
Europe has often viewed Latin America as falling
within the sphere of influence of the United
States. As such, European interest has-with few
exceptions-been minimal. Given the structural
and perceptual asymmetries of the relationship, it
is not surprising that its evolution has been ambiguous, sporadic, and frustrating.
From its founding in the 1950s, the EC
served as both impetus and model for Latin Amer-

321

322

Latin America

ican integrative efforts. For example, the Central

American COInmon Market (CACM) (1960), the
Latin American Free Trade Association (LAFTA)
(1960), and the Andean Pact (1969) as weIl as the
Latin American Economic System (SELA)
(1975), were designed in part to foster greater cooperation among the Latin American countries
themselves and to offset trade diversion from Europe. In the 1950s and early 1960s, Europeans
were preoccupied with their own experiment in regional integration, although the EC did express its
intention to pursue closer relations with Latin
America, and "contact groups" between the Commission and Latin American diplomatic missions
in Brussels were established in 1963 (Muniz,
1980, pp. 56-57). This profession of affinity was
largely rhetorical, however, as the EC usually favored closer ties with former colonies in Africa
and ignored the elements of a "Latin American
memorandum," drafted by the Commission in
1966, that recommended greater coordination of
interregional economic ties and more formal
mechanisms of consuItation between EC representatives and the heads of Latin American missions in Brussels (Mower, 1982, pp. 37-38). During the 1960s and 1970s, the most important
dimension of the EC-Latin American relationship
was economic, and trade expanded somewhat between the two regions. The unifying efforts of the
Latin Americans, particularly through CACM and
the Andean Pact, were targets of EC technical and
development assistance (Mower, 1982, pp.
38-45).
The adoption of the Buenos Aires Declaration in July 1970 was a high-water mark in the
evolving relationship. Coupling a Latin American
critique of the CAP and EC association policies
with a call for an expanded economic and political
dialogue, the declaration was embraced by the
Council of Ministers. It formed a basis for creation of an EC-Latin American joint committee
and negotiation of aseries of nonpreferential bilateral agreements with Argentina (1971), Brazil
(1973), Uruguay (1973), and Mexico (1975) (Kornat, 1985). The formation of SELA indicated a
Latin American desire to facilitate interaction on a
regional level. In 1978 and 1979, the Latin American Council, SELA's supreme body, proposed
adoption of a policy toward Europe on a number
of political and economic issues (Muniz, 1980, pp.
62-63). This project, however, "dropped into
oblivion" before it could influence interregional

relations (Baldinelli, 1986). And indeed, by the

end of the decade, the Latin American-EC relationship was characterized as lacking direction
and definition (Muniz, 1980).
In the 1980s, several factors combined to
raise European involvement in the Western Hemisphere. By mid-decade, Latin America owed
Western banks and international lending institutions approximately $350 billion; countries such
as Mexico and Brazil each owed more than $120
billion. AIthough European banks (especially
those in Britain) held approximately one-third of
Latin American debt, the EC generally deferred to
repayment proposals put forward by the United
States. European support of Latin American debt
reduction through export promotion was again
largely rhetorical; although the EC extended preferential access to the African, Caribbean, and Pacific (ACP) countries through the Lome convention, the EU made no special arrangements to
larger Latin American countries under the Generalized System of Preferences (GSP).
The 1980s also marked deepening EC involvement in issues not directly related to economics. In the 1982 dispute over the Falkland Islands (Islas Malvinas) between Argentina and the
UK, the EC supported Britain by condemning Argentina's occupation of the islands and imposing
an economic and arms embargo, which hastened
the British victory (Edwards, 1984). As one might
imagine, this event soured relations, as Latin
Americans feit betrayed by their ostensible
"counterweight." European activity was more
forceful and direct in formulating a response to
civil conflicts in Central America (Smith, 1995).
The view from Brussels was that U.S. support for
the contras in Nicaragua, as weIl as its assistance
to a government not known for its sterling human
rights record in EI Salvador, was, at best, misguided. At worst, Europeans believed that by
casting the issue in Cold War terms and asserting
that the Central American crisis was "externally"
inspired and supported, the United States was
risking an escalation of tensions with the Soviet
Union, thereby threatening European security.
Thus, the EC sought to mediate between the
United States and the players in the Central
American drama. EC member states and representatives of EC institutions participated in a series of historic meetings with Central American
foreign ministers, as weIl as ministers from the
Contadora group (Colombia, Mexico, Panama,

Latin America
and Venezuela), which culminated in the 1984
San Jose conference. This dialogue constituted
"the first common endeavor of the EC as such
within its European Political Cooperation structure" (Boselli, 1985, p. 12).
The entry of Spain and Portugal into the EC
in 1986 served as a catalyst for expanded European interest in Latin America. Both countries
had historie ties to Latin America and could
therefore speak for the region within EC institutions. Similarly, both countries had recently
abandoned authoritarian political systems and
thus could serve as models for democratic transitions in Latin America. One cannot overstate
Spain's role in placing Latin America on the EC's
radar screen and for revising EC institutional orientations and polieies in that regard. Madrid's influence is reflected in the EC's 1987 review of
Latin American policy, the expansion of EC
diplomatie missions in the region from four to
ten, the acquisition by the EC of ob server status
at the Organization of American States (OAS),
and the formalization of contact with Latin
American representatives to annual events. Spain
also had a hand in expanding nonpreferential
agreements with Latin America as well as in lobbying the EU to extend Lome concessions to
Haiti and the Dominican Republic (Schumacher,
1995, pp. 119-125). Madrid is also the location
of the Institute of European-Latin American Relations (IRELA), an organization created by the
European Parliament in 1984 to strengthen interregional relations, although it is interesting to
note that Spain has not always been an enthusiastic supporter of IRELA's activities (Wiarda,
1990, p. 165). Obviously, Spain has not been
alone in attempting to broaden and deepen interregional ties. Italy and Portugal also have important interests in the region. And no one can discount the diplomatie and economic importance of
Germany (van Klaveren, 1994, pp. 89-94).
At the end of the 1990s, one question worth
pondering is whether or not political and economic
reform in Latin America is attractive enough to the
EU to offset its preoccupation with consolidating
the single market, launehing economic and monetary union, enlarging into Central and Eastem Europe, and expanding ties with the Pacific Rim and
North Mrica. Democratic transformation in Latin
America has afforded opportunities for deepening
political contacts. Most important perhaps is the
continuing political dialogue between the Rio

323

Group and the EU following the 1990 Declaration

of Rome. Latin American reformism may also enhance economic opportunities for the EU. The
wave of privatization, for example, has increased
flows of European investment, especially in such
sectors as electronics and telecommunications.
Furthermore, one indication of European interest
in deepening relations with traditional trading partners is the December 1995 cooperation agreement
between the EU and MERCOSUR (Southem Cone
Common Market), the first ever between two customs unions, and the conc1usion of bilateral agreements with Mexieo and Chile. These lauer
arrangements provide EU entree into other regional groupings, most notably the North American Free Trade Agreement (NAFTA) and the Andean Pact.
Even though there are encouraging signs of
expanding interregional partnership, there are a
number of significant constraints. One is the continued dec1ine in Latin America's position as a
source of imports and a target for exports outside
the EU. On the import side, the region's share has
slipped from 8.7 percent in 1965 to 5.2 percent in
1991. Latin America's share of EU exports shrank
from 6.4 percent in 1965 to 4.13 percent in 1991
(Friscia and Simon, 1995, p. 16). Another constraint is a shift in interregional balance of trade.
For decades, Europe ran trade deficits with Latin
America; in 1993, however, the EU ran an ECU
1.7 billion surplus (Smith Perera, 1995, p. 101).
This makes the case for expanded economic relations less c1ear-cut than in the past and indeed
may provoke a protectionist response in the EU,
thus eroding positive political gains of recent
years. Opinion is divided regarding the single
market's trade-enhancing or trade-diverting effect
on Latin America (Sirnon and Purcell, 1995).
Other limitations are the variable speeds and differing geometries of Latin American integration.
Given the diversity of institutions and types of
economic arrangements, it is difficult for the EU
to manage relations on a regional level. Perhaps
the potential challenge of a proposed Free Trade
Area of the Americas (FTAA) will be a catalyst
for new approaches that will create a synergy toward "genuine partnership," rather than the alternative-and more accurate-characterization of
the regions as "distant friends" (Smith Perera,
1995, p. 99). Forty years on, Latin America and
the EU continue their "seareh for direction" (Vellinga, 1995).

324

Latvia

Bibliography
Baldinelli, Elvio. 1986. "Turning the Page Between
Latin America and the European Communities."
CEPAL Review no. 30, pp. 87-96.
Boselli, Luigi. 1985. "EC Boosts Ties to Latin America:
Political and Economic Dialogue Is Institutionalized
at Ministerial Level." Europe no. 252, pp. 12-14.
Edwards, Geoffrey. 1984. "Europe and the Falklands
Crisis of 1982." Journal of Common Market Studies
22,no.4,pp.295-313.
Friscia, A. Blake, and Fran90ise Simon. 1995. "The
Economic Relationship Between Europe and Latin
America." In Susan Kaufman PureeIl and Fran90ise
Simon, eds., Europe and Latin America in the World
Economy, pp. 5-37. Boulder: Lynne Rienner.
Kornat, Gerhard D. 1985. "Europe's Rediscovery of
Latin America." In Wolf Grabbendorf and Riordan
Roett, eds., Latin America, Western Europe, and the
US: Reevaluating the Atlantic Triangle, pp. 59-77.
New York: Praeger.
Mower, A. Glenn. 1982. The European Community and
Latin America: A Case Study in Global Expansion.
Westport, CT: Greenwood Press.
Muruz, Blanca. 1980. "EEC-LatinAmerica: A Relationship to Be Defined." Journal of Common Market
Studies 19, no. 1, pp. 55-64.
Schumacher, Edward. 1995. "Spain and Latin America:
The Resurgence of a Special Relationship." In Susan
Kaufman PureeIl and Fran90ise Simon, eds., Europe
and Latin America in the World Economy, pp.
113-137. Boulder: Lynne Rienner.
Simon, Fran90ise, and Susan Kaufman Pureeil. 1995.
"The Impact of Regional Integration on
European-Latin American Relations." In Susan
Kaufman PureeIl and Fran90ise Simon, eds., Europe
and Latin America in the World Economy, pp.
39-84. Boulder: Lynne Rienner.
Smith, Hazel. 1995. European Union Foreign Policy
and Central America. New York: St. Martin's Press.
Smith Perera, Roberto. 1995. "Economic Relations Between Latin America and the European Union."
CEPAL Review no. 56, pp. 97-110.
van Klaveren, Alberto. 1994. "Europe and Latin America in the 1990s." In Abraham F. Lowenthal and Gregory F. Treverton, eds., Latin America in a New
World, pp. 81-104. Boulder: Westview.
Vellinga, Menno. 1995. "The European Community and
Latin America: A Search for Direction." Journal of
Third World Studies 12, no. 2, pp. 238-265.
Wiarda, Howard J. 1990. "Europe's Ambiguous Relations with Latin America: Blowing Hot and Cold in
the Western Hemisphere." Washington Quarterly 13,
no. 2,pp. 153-167.

-Cleveland R. Fraser

Latvla

See

BALTIC STATES.

Legal Instrument

There are three legal instruments, or forms, in

which the Council of Ministers adopts legislative
acts: directives, regulations, and decisions. Directives are binding on the member states with regard
to the result to be achieved but allow member
states to choose the means to achieve that result.
Regulations lay down rules and guidelines applicable in their entirety to all member states. A decision is directly binding on the individual or enterprise to which it is applied.
See also DECISIONMAKING PROCEDURES.

Legislative Procedures

See DECISIONMAKING PROCEDURES.

Legltlmacy
Legitimacy is a central concept in the Western liberal tradition of government. Legitimacy transforrns the exercise of power into acceptable political authority. Although legitimacy and democracy
are not synonymous, legitimacy is usually strongest
in political systems governed by democratic
processes, norms, and constitutional guarantees of
fundamental rights and freedoms. Legitimacy relies
also on efficiency and the capacity to deliver material and nonmaterial benefits to the citizens of a
polity. In any political system, there are tensions
between these different components of legitirnacy.
It can be difficult, for example, to reconcile the demand for democratic processes with efficiency.
The legitimacy of the EU and its institutions
was not a major problem in the past, when the European project res ted on the legitimacy of its
member states and the contribution of integration
to peace and prosperity in Europe. Since the beginning of the 1990s, however, the legitimacy of
the EU is increasingly being questioned in political and scholarly debate on the future of the European project, for a number of reasons. First, European integration has become politicized in a
manner that was not evident in the past. The intensification of constitution building in the EU, highlighted by the fact that the 1996-1997 intergovernmental conference (IGC) was the fourth since
1985 but only the sixth since 1951, has placed
considerable strain on some national political systems. Denmark's narrow rejection and France's
narrow acceptance of the Treaty on European
Union (TEU) in 1992 demonstrated that political

Legitimacy
leaders could no longer assume that domestic public opinion would go along with their plans for the
future constitutional order of the EU.
Second, the policy remit of the EU has expanded significantly. The Single European Act
(SEA) of 1986 was essentially about market creation and deregulation. The TEU touched on
broader and more sensitive terrain with its commitment to a single currency, cooperation on internal security matters, and enhanced external cooperation. It is one thing to make rules about
permissible food additives; quite another to frame
a common security policy and create a single currency. It was inevitable that the process would become more politicized when the EU touched on
traditional attributes of state sovereignty. The consent of the people to a deepening of integration assumed added salience when the EU's collective
ambitions grew.
A third reason for the politicization of the European project and the growing debate on legitimacy is the deep-rooted conflict about where the
process is going. There is no shared vision of how
Western Europe should organize its collaboration
to take account of the dramatic changes on the
continent since 1989. A number of competing visions jostle for primacy in the system. The vision
of Europe as simply an economic space within
which traders and bankers are free to exchange
goods and services has powerful proponents. A
preference for economic Europe but not political
Europe is clearly evident in a number of member
states. The preference for market integration tends
to be accompanied by adesire to protect the nation-state as the primary arena of political order.
An alternative vision, promoted most coherently
by Comrnission president Jacques De10rs between
1985 and 1994, is ofEurope as an organized space
bound by ties of social solidarity that go beyond
market bui1ding. Another variant of the De10rs vision is the democratization of the EU by building
a polity that goes beyond the state.
The mere fact that legitimacy and democracy
are central issues in the contemporary debate
about the European project highlights the fact that
the EU has moved from being predominantly a
problem-solving arena to a polity. The EU is
breaking free of its economic fetters to confront
core issues of political order. The debate has
moved beyond relations between different levels
of government to the relationship between the EU
and Europe's peoples. Any debate on legitimacy

325

in the context of the EU touches on difficult issues

of normative political theory. The procedures and
processes of democratic government and theoretical discussion of the necessary preconditions for
democracy have evolved within the context of the
nation state. Rendering structures of governance
beyond the nation-state democratic and legitimate
raises problems of institutional design, political
accountability, and the very nature of political
community in contemporary Europe. Democratic
theory itself may need to be reassessed because of
the growing significance of internationalized governance in the world.
National representative democracy rests on a
set of institutions and practices that includes regular
elections, freedom of speech and the press, the right
to vote and run in elections, constitutional guarantees about the conduct of executive power, and the
accountability of governments to their electorates
largely through national parliaments. Political accountability in the EU is highly problematic. The
EU has a very fragmented and opaque range of
highly complex decisionmaking rules that gives
rise to a weakness of accountability. European law
emerges from discussions and negotiations within a
myriad of advisory and working comrnittees surrounding the Comrnission, working parties of the
Council of Ministers, European Parliament (EP)
comrnittees, and interinstitutional dialogue. Informal politics and backroom deals characterize the
process. The Comrnission, with responsibility for
proposing draft legislation, has no direct democratic mandate, although it is answerable to the EP.
The Council of Ministers large1y meets in secret
even when it is passing legislation that will become
directly applicable in the member states. Nor is the
Council collectively responsible at the EU level.
The democratic credentials of the EP are weakened
by the low turnout in EP e1ections (58 percent in the
1994 elections).
Integration has also affected national democracy by removing important areas of public policy
from within the ambit of national parliaments. All
national parliaments have difficulty in holding
their national ministers accountable for what they
do at a European level. Moreover, the technical nature of much EC legislation tends to enhance the
power of the expert over the politician. Most decisions are taken by delegated officials in the myriad
of comrnittees surrounding the EU's institutions.
The greater use of qualified majority voting since
the SEA means that laws must be implemented in

326

Legitimacy

national jurisdictions without necessarily receiving

the support of national representatives in the Council. There is a weakness of political accountability
in the EU system caused by the institutional balance, the technical nature of the decisions, the lack
of transparency about how decisions are reached,
and the particular weakness of parliamentary control in relation to the Common Foreign and Security Policy, Cooperation on Justice and Horne Mfairs, and the independence of the proposed
European Central Bank.
The EU and internationalized governance
structures more generally highlight the problem of
scale in contemporary governance. Political community based on the nation-state developed on the
basis of a relative congruity between bounded territory, the functional tasks of government, and shared
identity. This has broken down in the contemporary
international system. The tasks of government require the creation of institutional structures and policy regimes beyond the level of the state. The benefits of this, however, may come at the cost of
submerging national democracies into larger and
less democratic transnational spaces. Citizens are
faced with a trade-off between the consequences of
integration for their national democracy and the imperative on efficiency grounds of participating in
structures that he1p manage interdependence (Dahl,
1994). It may weIl be that national democracy in
the contemporary world can only be assured if
transnational structures are also rendered democratic. This raises issues not just of institutional design
but of political community.
The EU does not rest on a shared public realm
in any meaningful sense of the term. There is no
European body politic and a shared political identity (Scharpf, 1996, p. 26). Representative politics
is stililargely national, a situation that constitutes a
barrier to the emergence of a genuinely European
political realm. The public space is stilliargely national. The profusion of policy communities in the
EU is not matched by comparable linkages between
national political parties and the media, the traditional transmission belts of politics. The German
Constitutional Court, in its judgment on the TEU in
October 1993, placed considerable emphasis on the
need for democracy to go beyond the formal principIe of accountability to include "a continuous free
debate between opposing social forces, interests,
and ideas, in which political goals become clarified
and change course and out of which a public opinion emerges which starts to shape a political will."

Yet there is no shared language that would allow for

European-wide public discussion.
As the EU moves to a single currency and enhanced international cooperation, the affective dimension of integration is more important. An emphasis only on material benefits will not guarantee
continued comrnitrnent to the process. As Jacques
De10rs once remarked, "You don't fall in love with
a common market; you need something else"
(quoted in The European, November 3, 1994, p.
13). There is a need to strengthen the public's
identification with the European project so that
people feel at horne with the EU's institutions and
policies. Feeling at horne with transnational institutions requires the development of a political and
cultural identity that goes beyond the state. AIthough Europe cannot create a demos in the national sense, community building is increasingly
necessary to the legitimacy of the European project (Laffan, 1996).
Democratic legitirnization is a central issue of
political order in the EU at this stage of its development. However, overcoming the EU's democratic
deficit is problematic in many respects. It requires
constitutional reform that enhances political accountability and the visibility of the process in the
eyes of Europe's electorates. The process of constitutional reform itself should be conducted in a far
more public manner than in the past, and the consent of Europe' s peoples should be achieved. Moreover, a polity has shallow roots if it does not rest on
a shared political identity and realm of some sort.
There are enormous political and cultural barriers
to the development of a transnational political community and great uncertainty about the kinds of institutional structures and practices that are needed
for democratic governance above the level of the
state. That said, there are political forces actively
engaged in the project to democratize the EU. The
glimmer of a European civil society is discemible.
Domestic politics are no longer conducted in isolation from the European dimension, and identity is
no longer confined to the straitjacket of the nationstate. Political Europe is struggling to join economic Europe in a faltering but definite manner.

See also

ACCOUNTABILITY;

DEMOCRATIC

DEFICIT; EUROPEAN PARLIAMENT; NATIONAL PARLIAMENTS.

Bibliography
Dahl, R. A. 1994. "A Democratic Dilemma." Political
Science Quarterly 109 (Spring), pp. 23-34.

LlNGUA
Laffan, Brigid. 1996. ''The Politics of Identity and Political Order in Europe." Journal of Common Market
Studies 34 (March), pp. 81-1Ol.
Scharpf, F. W. 1996. "Negative and Positive Integration
in the Political Economy of European Welfare
States." In G. Marks, F. W. Scharpf, P. C. Schmitter,
and W. Streeck, Governance in the European Union,
pp. 15-39. London: Sage.

-Brigid Laffan

LEONARDO DA VINel
Designed "to ensure the implementation of a vocational training policy which will support and
supplement the action of the Member States as a
means towards realizing an open European area
for vocational training and qualifications," the
LEONARDO DA VINCI program has a budget of
ECU 800 million covering the 1995-1999 period.
LEONARDO has three broad objectives: to sustain the quality of member state's systems,
arrangements, and policies; to support innovative
actions on the training market; and to encourage
awareness of the "European dimension" of vocational training.
See also EOUCATION, VOCATIONAL TRAINING,
AND YOUTH POLICY.

Liberal, Democratlc, and

Reformist Party
See

EUROPEAN LIBERAL, DEMOCRATIC, ANO RE-

FORMIST PARTY.

327

sures to manage economic interdependence, with

geopolitical concerns playing a secondary role;
bargaining outcomes reflect relative power stemming from the nature and intensity of preferences,
with supranational actors playing a secondary role;
and institutional delegation reflects the desire for
credible commitments, with ideology and technocratic considerations playing secondary roles.
See also INTEGRATION THEORY.

Llechtensteln
Liechtenstein took the unusual step in May 1995
of joining the European Economic Area (a close
economic accord between the EU and the European Free Trade Association, of which Liechtenstein is a member) even though Switzerland, to
which Liechtenstein has close ties, had decided
not to join. Liechtenstein has little interest in joining the EU itself, however: the tiny principality
would have to change many of its generous tax
laws and could not bear the administrative burden
of accession.
See also EUROPEAN EcONOMIC AREA.

LlFE
LIFE, the EU's financial instrument for the environment, is the principal source of funding for
projects contributing to the development and implementation of the EU's environmental action
program. LIFE 11, for the years 1996-1999, also
covers projects in Central and Eastern Europe.
See also ENVIRONMENTAL POLICY.

Liberal Intergovernmentallsm

LlNGUA

Liberal intergovernmentalism, a critique of neofunctionalism, was initially presented as a framework for synthesizing theories of foreign economic
policy, interstate bargaining, and international
regime formation into a coherent account of landmark EU decisions taken under unanimity (such as
the Single European Act and the Treaty on European Union), though it can be applied to other
types of decisions as weIl. Liberal intergovemmentalism divides EC decisionmaking into three
stages-preference formation, interstate bargaining, and institutional delegation-each of which is
explained by a different set of factors. Most variants of liberal intergovemmentalism argue that national preferences reflect the issue-specific pres-

Launched in 1990, LINGUA (Action Program to

Promote Foreign Language Competence in the European Community) is a program to facilitate student and worker mobility in the EU by providing
opportunities for language learning directly relevant to education and vocational training.
LINGUA encourages bilateral and multilateral
cross-border exchange programs, partnerships
between institutions, joint educational projects,
town and city twinning, and grants for language
study. In 1995, LINGUA was brought under
SOCRATES, the EU's all-embracing educational
program for 1995-1999.
See also EOUCATION, VOCATIONAL TRAINING,
AND YOUTH POLICY.

328

Lobbying

Lobbylng
See INTEREST GROUPS.

Lome Conventlon
Named after the capital of Togo, where the first
convention was signed in 1975, the Lome conventions have represented the flagship of the EU's
global North-South cooperation policy. As a tradeand-aid pact among members of the EU and a
group of poor African, Caribbean, and Pacific
(ACP) countries, the first Lome convention was
hailed by optirnists and pragmatists as the way to
build a new relationship between Europe and its
former colonies. Lome I (1975-1980) raised
hopes of laying the groundwork for developing a
postcolonial partnership. Out of it grew a number
of new and even innovative structures that some
believed could redress the self-reinforcing asymmetrical relationships between the have and the
have-not states. Calls for a New International Economic Order (NIEO) had become the rhetorical
touchstone for the demands of the less-developed
countries (the Group of 77) in the early 1970s.
Lome I echoed both the demands for an NIEO and
some of the then-fashionable responses.
Lome 11 (1980-1985) and Lome III (19851990) were attempts to face the development failures of Lome I and stern the tide of worsening
conditions, especially in Africa. Neither the Lome
conventions nor other bilateral or multilateral
mechanisms were able to halt the steady economic
dedine in many ACP states. Since 1975 the EU
has spent in excess of ECU 340 billion on behalf
of Lome countries. The seventy ACP states today
still assert that past wrongs and recent natural and
man-made obstades justify such generous transfers of resources from Europe.
Lome IV (1990-2000) negotiations reflected
a number of fin de siede realities. The Lome partners were unwilling to endure the tedious complexity of renegotiating, every few years, an essentially static relationship. Instead they agreed
upon a ten-year treaty with amid-point reevaluation and adjustrnent offunding. By the mid-1990s
some members of the EU indicated a growing desire to bow out of the Lome arrangements. A deal
signed in Mauritius (November 1995) continued
to extend some trade-and-aid privileges to the
ACP group until the Lome IV expiration in 2000.
However, what in the 1970s looked like the beginnings of a partnership has deteriorated into a hold-

ing operation to last out the ten-year Lome IV

agreement, resulting in Httle more than a set of
face-saving gestures for all parties concerned.
In 1995 France sought to assure the ACP
states that financial aid would continue on a par
with previous levels, but French desires faced opposition from other EU members, notably Britain
and Germany, who favored reduced assistance. By
the mid-1990s the EU had already reduced or suspended assistance and concessions to fifteen ACP
countries, among them Nigeria, Zaire, and the Sudan, whose govemments were considered undeserving. For the ACP countries still receiving assistance and trade concessions, the final 1995
Lome compromise adjustrnents still ensured assistance on a par with previous levels, as weIl as
trade advantages (better terms for farm exports),
thereby salvaging some Lome benefits for ACP
participants.
The hopes for Lome partnership in 1970 were
vastly different from those of twenty years later.
Calls for an NIEO and the optimism about pumppriming development had given way by the 1990s
to post-Cold War competition, an expanding EU
embracing member states with no historical ties to
the ACP countries, donor fatigue in general, and
the political chaos and civil conflicts that have
ravaged much of Africa. It may be time to lay the
Lome partnership to a fitting rest at the end of the
century, but the twenty-five years of experience of
that partnership des erve reevaluation before the
search begins for new twenty-first-century policies and institutions.
From Lome I's inception to the twilight years
of Lome IV, the Lome arrangement has been asymmetrical. The ACP bargaining position for trade and
aid did not improve but deteriorated between 1975
and 1995. Throughout this period demands for aid
from the EU were made and the Lome aid spigot
remained open, but the resources transferred must
be measured against the painful reality that ACP
debt doubled in the 1980s and more than half of the
ACP states fell under the International Monetary
Fund's structural adjustrnent prograrn. Without EU
aid and loans the circumstances of many ACP states
might have been even worse, but it is dear that, at
best, the Lome assistance has been a finger in the
dike for many ACP govemments.
Lome arrangements are also asymmetric with
respect to the comparatively favorable trade access for ACP products in the EU market. Twothirds of the ACP states are dependent on non-

Lome Convention
petroleum commodities for their export earnings,
but the EU market for ACP raw materials has declined over the past twenty years. So, too, has the
ACP market share of EU imports. The potentially
advantageous access to the EU market has done
little to increase either European demand or the
ability of ACP states to take advantage of tariff
preferences in the face of competition from nonACP raw materials producers.
The Lome relationship did not and could not
overcome the lack of reciprocity between the partners or the worsening asymmetry of the economic
circumstances. Innovative structural efforts dating
back to Lome I attempted to develop institutions
that would be able, over time, to reduce the inequality between the have and the have-not states.
Lome took seriously NIEO-type concerns about
structural asymmetries stemrning from the colonial legacy that required affirmative and innovative intervention.
Perhaps the most distinctive innovation, dating back to Lome I, has been the System for the
Stabilization of Export Earnings from Products
(STABEX) scheme. STABEX was intended to address the chronic problem of unstable (often
falling) export revenues for countries overwhelmingly dependent on a single product. Under the
scheme, a country dependent on more than a set
percentage of export earnings on a list of STABEX
commodities such as tea, cocoa, coffee, and cotton
would be eligible for financial aid if those earnings
fell below a certain level. The system is based on a
regularly recalculated dependency threshold for
each country in relation to each product listed. Another scheme with similar provisions, the System
for the Stabilization of Export Earnings from Minerals (SYSMIN), was subsequently added, extending the STABEX idea to minerals.
Not surprisingly, as the price of many primary products declined on the world market in the
1980s, the demands on the schemes exceeded resources. Processing compensation claims was
slow, and the ACP countries argued for an expansion of the list of the products that needed to be
covered. Critics of the STABEX and SYSMIN
schemes have argued that the buffer against the
uncertainty of the international market also reduced the motivation to diversify economies to
make them less dependent on the export earnings
from a limited number of prirnary products.
Over the course of the various Lome conventions, STABEX and SYSMIN schemes were im-

329

proved and updated, but the Lome promise fundamentally to restructure the economies of ACP
states has failed. So, too, have attempts to restructure the international trading system to achieve
more diverse economies with fewer discriminatory
consequences for the least-developed countries.
Plans to compensate disadvantaged economies and
provide inducements for domestic economic reform are also heavily dependent on capable, honest
governments taking advantage of new opportunities. In many ACP states, funds from the STABEX
and SYSMIN schemes wound up in the pockets of
corrupt government officials instead of going to
producers to compensate them for falling prices
and induce them to diversify production. One may
conclude that even theoretically useful schemes to
address historically wrought structural economic
disadvantages in the international marketplace depend on efficient and effective governance in the
disadvantaged states.
The structure of the Lome re1ationship also
reinforced, not reduced, the asymmetrical nature
of the partnership in political and administrative
ways. The disparity between the relative1y small
number of EU states and the large and growing
number of increasingly diverse states (seventy
ACP states under Lome IV) made it difficult to develop consensus and strategy among the ACP
members.
Similarly disabling has been the small, poorly
staffed, and inadequate ACP secretariat. Throughout the Lome conventions, the EU group has enjoyed a large staff capable of generating aid and
trade data and strategic and policy options. Weak
ACP negotiations preparation and the absence of a
data-based strategy have been the norm throughout the life of Lome. There has been not only economic disparity between the haves and the havenots but organizational and structural disparities
as weIl. The EU had to reconcile the differing positions on the donor side of France versus Germany, Britain, and others, but the ACP had to
reckon with geographical differences between the
African and the Caribbean groups-the former
dominantly concerned with the size of aid packages and the latter with product entry into the European market-as weIl as differences between
the Anglophone and Francophone African states
and their generally weak and ill-prepared bargaining positions. Lack of unity in the ACP group was
worsened by the absence of support staff and firstclass preparatory staff work. All too often during

330

London Report

Lome renegotiations, the ACP group argued only

general principles and philosophies while the EU
came to the table with firm positions lodged in
statistical analysis.
Among the many failures of the Lome
arrangements has been Lome's inability to bridge
the capacity divide between the have North and
the have-not South. In fact, the institutional weakness of many ACP states and the ACP secretariat
has reinforced the reality of their unequal capacity
and status. Small, weak, administratively disorganized states produced weak bargaining positions
for more resources and a more equal partnership.
Since 1989 the strong, affluent European states
have also large1y redefined their interests around
domestic concerns and post-Cold War Central and
Eastern European interests. Only France is nostalgie about its re1ationship with Francophone
Africa.
The most charitable judgment about the
Lome conventions is that they were an interesting
but large1y failed experiment. Both sides will, no
doubt, have to readdress the need for a new EUACP relationship. Moreover, in the twenty-first
century, environmental and human rights issues
will be intertwined with economic interests. Policymakers of the new century will need to digest
Lome's overall failure before embarking on new
and more effective symmetrie al partnerships of
mutual benefit between the rich and poor states.
-Isebill V. Gruhn

London Report
As part of an effort in the early 1980s to give more
structure to European Political Cooperation
(EPC}--the EC member states' mechanism to coordinate foreign policy-and to make it more binding
and coherent, foreign ministers adopted areport on
EPC at a meeting in London on October 13, 1981.
The so-called London Report codified and intensified existing practices but also agreed on the need
for EPC to become less reactive and more anticipatory in its approach to international developments.
Member states had debated the appropriate content
of EPC, and the report noted their agreement to discuss in EPC "certain important foreign policy questions hearing on the political aspects of security."
Eventually, the heads of state and govemment issued a Solemn Declaration on European Union at a
summit in Stuttgart, June 17-19, 1983, which ex-

panded the scope of EPC discussions to ''the political and economic aspects of security."
See also EUROPEAN POLmCAL COOPERATION.

Luxembourg
Luxembourg has significantly influenced four major events in the evolution of European integration:
the establishment of the European Coal and Steel
Community (ECSC) in 1952 and the beginnings of
Franco-German reconciliation, the 1955 Messina
conference that led to the 1957 treaties of Rome,
the 1969 Werner Plan for monetary union, and the
1992 Treaty on European Union (TEU), particularly the portion on Economic and Monetary
Union (EMU). In addition, former Luxembourg
prime minister (1974-1979) Gaston Thorn was
Commission president between 1981 and 1985,
and former prime minister (1984-1995) Jacques
Santer became Commission president in 1995.
These singular contributions have come from
a nation of only 400,000 people having a GDP of
ECU 11 billion, less than 0.2 percent of the EU total (EUROSTAT, 1996). Luxembourg's role has
been mainly catalytic. Four factors made it effective: talented and highly experienced statesmen in
office at critical moments, unwavering commitment to the ideal of European union, unusuallanguage skills and personal relationships with leaders of France and Germany, and such small size
that Luxembourg could neither threaten nor riyal
any other European country (Trausch, 1996;
Haag, 1996; Werner, 1996).
During their World War 11 exile in London,
Luxembourg's leaders, particularly Foreign Minister Joseph Bech (1926-1959), decided to press
for new international organizations to promote
Franco-German reconciliation and European unification after the war. Bech focused on economic
institutions, and the 1948 Bene1ux customs union
was the first result. The EU's members saw it as a
model for all ofWestern Europe (Werner, 1996).
Since then both Luxembourg's leaders and
public have supported European economic union
as a means to political union, their ultimate goal.
The occasional public doubts about the benefits of
"union" all passed quickly. This was the pattern
when the Common Agricultural Policy (CAP)
boosted consumer prices in the 1960s, when
neighboring countries berated Luxembourg for
being a tax haven in the 1980s and 1990s, and
when resentment surged in Luxembourg in 1992

Luxembourg

over the TEU provision that all citizens of the EU

have the right to run and vote in local elections
wherever they may reside in the EU (Werner,
1996).
When French foreign minister Robert Schuman adopted Jean Monnet's proposal for a coal
and steel community in 1950, Luxembourg foreign
minister Bech immediately became a key champion. Bech was the ideal Franco-German interlocutor: he spoke both languages perfectly, he had
attended primary and secondary school in Luxembourg with Schuman, and he already knew West
Germany's chancellor Konrad Adenauer weIl.
Beck had a warm gregarious personality, all-night
stamina, a long memory, a gift for perceiving common ground, and more experience in bis ministerial role than anyone else in Western Europe. He
also rigorously kept a low profile befiUing his
country's size, yet he always managed to be present at critical meetings. By all accounts, Bech persuaded Schuman and Italy's prime minister Alcide
De Gasperi that Adenauer could be trusted. Bech
thus helped to start the long process of FrancoGerman reconciliation and to bring about the 1951
Treaty of Paris, which established the ECSC
(Kasel, 1996; Trausch, 1996; Haag, 1996).
A by-product of Bech's role is Luxembourg's
status as one of the three "capitals" of the EU.
This began with the "provisional" placement of
the ECSC's institutions in Luxembourg, ineluding
what is now the European Court of Justice (ECJ).
The sole exception was the ECSC Assembly (today's European Parliament), wbich went to Strasbourg because Bech feared that it would overwhelm Luxembourg's small capital city. Adenauer
suggested Luxembourg as a provisional site when
the ECSC signatories could not agree on any of
the formal candidates: Liege, Nice, and Turin.
Later the European Atomic Energy Community
(EURATOM), the European Investment Bank, the
Court of Auditors, and other EC offices were
added to the Luxembourg complex. The ECSC's
and ECJ's "provisional" status also became permanent. Luxembourg feared the size of the new
Commission (modeled on the ECSC's High Authority), however, and was relieved when Community leaders decided in 1957 to locate the Commission in Brussels (Trausch, 1996; Werner,
1996).
Bech's final key input came in June 1955
when he presided over the Messina conference of
ECSC foreign ministers. There he worked elosely

331

with Belgian foreign minister Paul-Henri Spaak to

launch the drafting process that led to the signing
of the treaties of Rome in March 1957 and the inauguration of the EEC and EURATOM in January
1958.
A decade later, in 1969, French president
Georges Pompidou proposed that the EC heads of
state and governrnent meet at The Hague on December 1 and 2 to discuss enlarging and deepening the EEC. There the EC leaders asked Luxembourg's prime minister Pierre Werner to chair a
study on Economic and Monetary Union (EMU).
Werner was also finance minister and had been
publiely advocating monetary union since 1960.
The EC failed to act on the subsequent Werner
Plan. France did not like forced harmonization of
monetary policies, the United States took the dollar off the gold standard, and the 1973 oil shock
put further pressure on exchange parities. But in
1979 the EC took a leaf from the Wemer book and
established the European Monetary System
(Wemer, 1996).
Gaston Thom became Commission president
in 1981 when consensus could not be reached on
any member state's first preference for the position. Thom's four years as president marked time.
Britain adamantly opposed any progress toward
European union, and a deep recession raised further problems. Coming from a small country,
Thorn had no great political weight of his own.
Although he could invoke his elose relationship
with Germany's chancellor Helmut Schmidt,
Thorn lacked comparably deep ties with top
French leaders (Trausch, 1996).
Luxembourg held the EC presidency during
the critical formative drafting of the TEU in the
first half of 1991, during the intergovernmental
conferences (IGCs). The treaty's structure and
most of its substantive content took shape under
Luxembourg's chairmanship. In particular, Luxembourg finance minister (also prime minister
since 1995) Jean-Claude Juncker set the agenda,
found the formulas, and presided over the sessions
that produced the treaty's text on EMU.
The first half of 1991 also saw the dissolution
of the Soviet Union, the Warsaw Pact, and the
Council for Mutual Economic Assistance
(COMECON), as weIl as the onset of the Gulf
War and of events that culminated in war in the
former Yugoslavia. As president of the EC's general affairs (foreign ministers) council at the time,
Luxembourg's foreign minister Jacques Poos

332

Luxembourg Compromise

pragmatically pressed the concept of a common

foreign policy both in internal EC councils and in
representing the EC and its members to the govemrnents involved in those events.
Some observers have argued that no small
EU member country will ever again play the special kind of formative role that Luxembourg exercised in the early stages of European integration.
They believe that the nature of contemporary
problems, the enlarged membership of the EU,
changes in EU internal decision mIes, and the
much greater ease with which European leaders
deal directly with each other all render such a role
either unnecessary or unworkable. Nonetheless, in
1995 the EU once again made a Luxembourger,
Prime Minister Jacques Santer, Commission president after none of the first-choice candidates
could win unanimous consent.
See also APPENDIX 2; APPENDIX 3.
Bibliography
EUROSTAT. 1996. Statistics in Focus: Economics and
Finance 1996-1997. Luxembourg: Office for Offida! Publications of the European Communities.
Haag, Prof. Dr. Emile, historian and director, Athenee
de Luxembourg. 1996. Interview by author. Luxembourg. March 25.
Haag, Emile, and Emile Krier. 1987. La GrandeDuchesse et son Gouvernement Pendant La Deuxieme Guerre Mondial: 1940 l'Annee du Dilemme.
Esch-sur-Alzette, Luxembourg: RTL Edition.
Kasel, Ambassador Jean-Jacques, permanent representative of Luxembourg to the European Union. 1996.
Interview by author. Luxembourg. March 24.
Trausch, Prof. Dr. Gilbert, director, Robert Schuman
Center for European Studies and Research. 1996. Interview by author. Luxembourg. March 29.
Wemer, Dr. Pierre, former prime minister of Luxembourg. 1996. Interview by author. Luxembourg.
March 25.

-Edward M. Rowell

Luxembourg Compromlse
The Luxembourg Compromise of J anuary 1966
ended the so-called Empty Chair Crisis, which
had erupted in July 1965 when France walked out
of the Council of Ministers over a dispute ostensibly about enhanced supranational power for the
Commission and the European Parliament but really about the introduction of majority voting in
the Council (due to come into operation in January 1966). The prospect of being outvoted in the
Council was anathema to French president
Charles de Gaulle, an ardent intergovemrnentalist.
De Gaulle returned to the negotiation table only
after suffering a scare in the presidential election
ofDecember 1965, and the crisis was resolved at a
meeting of foreign ministers in Luxembourg on
January 28-29, 1966. After restating their positions, France and the other member states approved a short declaration, the so-called Luxembourg Compromise, which maintained the
principle of majority voting but acknowledged
that "when very important issues are at stake, discussions must be continued until unanimous
agreement is reached."
The Luxembourg Compromise represented a
victory for de Gaulle and a serious setback for the
EC. Specifically, it impeded effective decisionmaking in the Council for the next twenty years
and underrnined the Commission's authority and
initiative. De Gaulle's insistence on unanimity
heightened the member states' awareness of each
other's special interests and increased their reluctance to call a vote in the Council even when no
vital interest was at stake. Only in 1986, when
faced with the need to implement the single market pro gram, did the member states decisively
tackle the problem of unanimity in the Single EuropeanAct.
See also EMPI'Y CHAIR CRISIS.

M
Maastrlcht Summlt
The European Council coneluded the year-Iong
intergovemmental conferences on economic and
monetary union and political union at the Maastricht summit on December 9 and 10, 1991.
See also TREATY ON EUROPEAN UNION.

Maastrlcht Treaty
The foreign ministers of the EC's member states
signed the Treaty on European Union (TEU) in
the southem Dutch town of Maastricht on February 7, 1992. The decisive negotiations finalizing
the treaty's provisions had taken place in the European Council in Maastricht the previous December. Therefore, the TEU is popularly known as the
Maastricht treaty.
See also TREATY ON EUROPEAN UNION.

Macedonla

Greece blocked EU recognition of Macedonia's in-

dependence from Yugoslavia, declared in November

1991, on the grounds that the establishment of a sovereign state called Macedonia would encourage
Macedonian irredentism (Greece has a province of
the same name). As a result, the new state became
known as the Former Yugoslav Republic of Macedonia (FYRoM). The EU's acquiescence in Greece's
hard-line policy toward Macedonia symbolized the
disarray and ineffectualness of EU policy toward the
former Yugoslavia in the early and mid-l990s.
See also GREECE; YUGOSLAVIA.

Macmlllan, Harold (1894-1986)

Harold Macmil1an led Britain's first unsuccessful
effort to join the EC. Macmillan, who became

prime minister in 1957, advocated Britain's entry

for negative reasons: the Commonwealth seemed
an inadequate vehiele through which to promote
British influence and prosperity, and the EC was
thriving. The decision to apply for Community
membership complemented Macmillan's foreign
policy priority: restoring and maintaining the Anglo-American "special relationship." That meant
repairing the damage caused by the Suez crisis of
1956 and cultivating a elose friendship first with
President Eisenhower (with whom Macmillan had
served in North Africa during World War II) and
then with President Kennedy, a much younger
man. Yet Macmillan's success in reestablishing
elose relations with Washington ultimately destroyed his chances of bringing Britain into the
EC, as French president Charles de Gaulle distrusted Britain's Atlanticism and doubted Britain's
commitment to its continental neighbors.
Entry negotiations began in 1961 but quickly
bogged down in amorass of technical detail. The
main sticking points were the Common Agricultural Policy (CAP), Commonwealth access to EC
markets, and EC-European Free Trade Association (EFTA) relations. Matters came to a head
over Anglo-American relations, when Macmillan
and Kennedy signed an agreement in December
1962 allowing Britain to use U.S. Polaris missiles
as the delivery system for British nuelear warheads. For de Gaulle, then struggling to develop
the French nuelear force, this represented a damning surrender of British sovereignty to the United
States. There could have been no more graphie
demonstration of Britain's irreconcilability with
de Gaulle's conception of a "European Europe."
De Gaulle responded dramatically at a press
conference on January 14, 1963. In a long, wideranging response to a planted question, de Gaulle
cataloged the history of Britain's role in Europe
and coneluded by effectively vetoing Britain's application. The ensuing suspension of entry negotiations undermined Macmillan's domestic political
position. Citing ill health, Macmillan resigned as
prime minister in October 1963 but went on to enjoy twenty-three years of robust retirement.
See also UNITED KINGDOM.

MacSharry Plan
The so-called MacSharry Plan, adopted by the EC
in 1992, proposed radical reform of the Common
Agricultural Policy (CAP). Named after Ray Mac-

333

334

Mad Cow Disease

Sharry, the commissioner for agriculture, the

MacSharry Plan tried to reconcile the goals of
maintaining high farm incomes and keeping peopIe on the land with the need to reduce agricultural surpluses and abolish trade-distorting export
subsidies. MacSharry's plan angered EC farmers,
including his Irish constituents, who fiercely opposed any reform. The plan satisfied the EC's
trading partners (especially the United States),
however, and paved the way for a conclusion of
the Uruguay Round of the GATT.
See also COMMON AGRICULTURAL POLICY.

Mad
See

COW

Disease

BOVINE SPONGIFORM ENCEPHALOPATHY.

Majorlty Votlng
See

DECISIONMAKING PROCEDURES; QUALIFIED

MAJORITY VOTING.

Malfattl, Franeo (1927-1991)

Franco Malfatti replaced Jean Rey as president of
the Commission in 1970. Malfatti's tenure was
undistinguished. Although the EC seemed poised
for revival after French president Charles de
Gaulle's resignation in 1969, the Commission remained seriously weakened following the Empty
Chair Crisis of 1965-1966. Nor did Malfatti, a
former Italian politician and government junior
minister, have the stature or enthusiasm to restore
the Commission's confidence. Malfatti dealt the
Commission's prestige a further blow by retiring
before the end of his two-year term as president in
order to reenter Italian politics. He went on to
have a distinguished career in Rome, becoming a
senior govemment minister.
See also COMMISSION.

Malta
A tiny (246 kilometers square) but strategieally 10cated Mediterranean island, Malta signed an association agreement with the EC in 1970 and applied for membership twenty-three years later,
when the end of the Cold War seemed to remove a
strategie impediment to the country's possible accession. Yet the compatibility between EU membership and Malta's constitutionally enshrined
neutrality and nonalignment is a divisive domestic

issue, with the Labor Party charging that accession would unduly constrain Malta's international
options. The Nationalist Party, in government
when Malta lodged its application, was at pains to
emphasize Malta's acceptance of the EU's Common Foreign and Security Policy, although it ruled
out full Western European Union membership.
Concerned about the stability of its southern
Mediterranean flank, and eager to build bridges to
its North African neighbors, the EU agreed in December 1995 to open accession negotiations with
Malta six months after the end of the 1996-1997
intergovemmental conference (lGC). In the meantime, Malta and the EU began a "structured dialogue" to help prepare the country for membership,
notably by reforrning the key agricultural, fisheries,
and financial serviees sectors. Malta has a higher
per capita GDP than that of Greece and Portugal
and is well within reach of the Economic and Monetary Union convergence criteria. Nevertheless, as
an EU member Malta would hope to benefit from
structural funds and other redistributive policies.
Although Malta's population of 376,000 is
similar to that of Luxembourg, it is difficult to
imagine that Malta would be on a par with Luxembourg institutionally within the EU. Whatever
one might think about having a Maltese commissioner, many member states would balk at the
prospect of having a Maltese presidency of the
Council, with small and inexperienced Malta setting the EU's agenda and representing the EU internationally.
It is uncertain whether a majority in Malta
would endorse EU membership in a referendum,
which is neither legally obligatory nor (for the Nationalist Party) politically wise. In the event, the
October 1996 general election became a referendum on whether or not Malta should join the EU.
The Labor Party's victory resulted in Malta's application being put in abeyance, much to the quiet
relief of many EU officials and politicians.
See also MEDITERRANEAN POLICY; TABLE 6.

Mansholt, Sicco (1908-1995)

Sieco Mansholt served as a commissioner from
January 1958 until January 1973. For the last few
months of that time he replaced Franco Malfatti,
who retired to reenter Italian polities, as Commission president. Mansholt's exceptionally long
tenure as a commissioner spanned the formation
of the European Economic Community in 1958,

Market Access Strategy

the Empty Chair Crisis of 1965-1966, the establishment of the customs union in 1968, the Community's revival after French president Charles de
Gaulle's resignation in 1969, and the first enlargement in 1973.
Mansholt's greatest contribution to the EC
was to implement the Common Agricultural Policy
(CAP) and, subsequently, to sound a warning
about the CAP's excesses. Coming from a Dutch
farrning background and having been agriculture
minister in the Netherlands before moving to Brussels, Mansholt had a profound grasp of Europe's
agricultural needs. As vice president of the Commission with responsibility for agriculture, Mansholt convened a conference of Comrnission officials, member-state delegates, and representatives
offarmers' groups in Stresa, in July 1958, to draw
up blueprints for the CAP. Detailed discussions on
the CAP's fundamental principles and procedures
continued during the next eighteen months before
the Comrnission submitted a proposal to the Council of Ministers in June 1960. The Council's approval six months later paved the way for the series
of complex and rancorous negotiations that preoccupied the Community in the early 1960s, as the
Comrnission and the member states thrashed out
exactly how the CAP would operate. In December
1964 the Council adopted the Mansholt Plan, establishing a fixed price for wheat and feed grains
throughout the Community for the farm year beginning July 1, 1967, the date set for frontier-free
trade in most agricultural products.
By that time Mansholt was concerned about
the impact of guaranteed high prices on agricultural production in the EC. He also sought to rationalize the agricultural industry by cutting down on
the number of smalI, inefficient farms. His proposed reforms in that regard made economic but
not political sense. Although national govemments
appreciated the wisdom of his proposals, none was
willing to risk the inevitable farmers' protests.
Mansholt left the Comrnission distrusted by EC
farmers for his reform proposals, although his design and implementation of the CAP were the basis of their prosperity in the 1960s and 1970s.
See also COMMON AGRICULTURAL POLICY.

Marjolln, Robert (1911-1986)

As Jean Monnet's right-hand man in the mid1940s and as a vice president of the Comrnission
in the 1960s, Robert Mrujolin played an extremely

335

important part in the origin and early development

of the EC. In the immediate postwar years Marjolin worked with Monnet on the French modernization plan before becoming secretary-general of
the Organization for European Economic Cooperation. He retumed to French public service in 1955.
Perhaps Marjolin's greatest contribution to
European integration came in 1955 and 1956, during the intergovernmental conference that led to
the establishment of the European Economic
Community and European Atomic Energy Community (EURATOM). As an adviser to the foreign
minister and a chief French negotiator, Mrujolin
attempted not only to strike the best bargain for
France but also to overcome deep-rooted French
hostility to the removal, however gradual, of the
protection that French industry then enjoyed. In
addition to fighting in France's corner in the intergovernmental negotiations in Brussels, Mrujolin
found hirnself waging a rear guard action at horne:
what he called in his memoirs the Battle of Paris.
Mrujolin's ultimate victory made French participation in the proposed common market possible
and therefore secured the EC's future.
Marjolin retired from the Commission in
1967 and turned his extensive experience and considerable ability as an economist to the service of
European industry. A decade later he returned
briefly to the forefront of European integration as
one of the so-called Three Wise Men who, at the
suggestion of French president Valery Giscard
d'Estaing, prepared areport on EC reform. Published in 1980, the report made a number of proposals to improve decisionmaking but disappo in ted Giscard by not going far enough in
endorsing a more powerful European Council. Although the report was politely shelved, it influenced future Comrnission president Jacques Delors, who implemented some of the report's
recommendations in the late 1980s.
See also FRANCE.

Market Access Strategy

As part of an effort to promote EU exports, in
February 1996 the Comrnission developed a European Market Access Strategy for trade and investment and set up an Action Group on Market Access to field enquiries from businesses regarding
trade policy questions. The strategy seeks to improve EU exporters' access to other markets and
to sharpen EU trade policy.

336

Marshall Plan

Marshall Plan
Probably the best-known U.S. international initiative ever, the Marshall Plan was the means by
which the United States sent massive economic
assistance to post-World War II Europe. The Marshall Plan--or the European Recovery Program,
as it was formally called-had many origins and
objectives, all of them interconnected. One goal
was humanitarian, another was strategic: U.S.
economic assistance would stabilize Western Europe politically and underrnine indigenous support
for communist parties while bolstering Western
Europe's ability to defend itself in the event of a
direct Soviet attack. As part of the U.S. strategic
approach to Western Europe at the outset of the
Cold War, the Marshall Plan also sought to encourage European integration by insisting that the
recipient countries formulate a joint approach to
aid solicitation and distribution.
General George MarshalI, the U.S. secretary
of state, announced the plan in a commencement
address at Harvard University on June 5,1947. Almost immediately the U.S. administration set
about convincing a skeptical Congress that it was
in the country's interests to allocate large-scale assistance to Western Europe. In Western Europe itself the French and British governments took the
lead in organizing a multilateral response to the
U.S. offer. To meet the U.S. prerequisite for Marshall Plan assistance, the recipient countries established the Organization for European Economic
Cooperation (OEEC), an umbrella body to solicit
U.S. funds. But the OEEC was too large and diverse to act as an institutional instrument of integration. Its eighteen members varied greatly in
size, population, and economic well-being. Perhaps more important, widely differing political
cultures and wartime experiences made the
prospect of agreement on integration extremely
remote. Thus the OEEC failed to live up to U.S.
expectations.
The Marshall Plan nonetheless played a pivotal role in promoting European integration by indirectly inspiring the Schuman deelaration. The
Marshall Plan involved the reconstruction of
Western Germany as an integral part of the reconstruction of Western Europe, thereby setting the
stage for aseries of diplomatic decisions that
would gradually rehabilitate the former enemy,
much to the consternation of Germany's neighbor
to the west. The threat to France's own economic
recovery, let alone intrinsic security, was im-

mense. Here was the crisis on which Monnet

seized in order to convince first Schuman, and
then the dubious French government, that it was
imperative for France to accept the inevitability of
German economic recovery and make a virtue of
necessity by proposing the pooling of French and
German production of coal and steel. Thus the
MarshalI Plan was an important antecedent of the
European Coal and Steel Community.
See also EUROPEAN COAL AND STEEL COMMUNITY; ORIGINS OF EUROPEAN INTEGRATION (POSTWORLD WAR

II).

MCAs
See MONETARY COMPENSATORY AMOUNTS.

MEDA
Part of the new Euro-Mediterranean Partners hip
launched at a conference in Barcelona on November 28, 1995, MEDA is a financial instrument to
support economic development, political stability,
and social cohesion in the EU's southern Mediterranean neighbors (the MED 12). Modeled on
Pologne et Hongrie: Actions pour la Reconversion
:Economique (PHARE) and Technical Assistance
for the Commonwealth of Independent States
(TACIS)--the EU's assistance programs for Central and Eastern Europe and the former Soviet
Union-MEDA replaces bilateral protocols between the EU and the MED 12.
See also MEDITERRANEAN POLICY.

Medlterranean Pollcy
A Euro-Mediterranean Partnership is the cornerstone of the EU's policy toward its Mediterranean
neighbors. Launched by the EU and the so-called
MED 12 (Algeria, Cyprus, Egypt, Israel, Jordan,
Lebanon, Malta, Morocco, Syria, Tunisia, Turkey,
and the Autonomous Palestinian territories) at a
conference in Barcelona on November 28, 1995,
the partnership represents a major effort by the EU
to improve its economic and political relations
with those nonmember Mediterranean states with
which it has association and cooperation agreements. The initiative calls for elose cooperation in
the fields of politics and security, economics and
finance, and social and human affairs. It also sets
an ambitious target for a free trade zone between
the EU and MED12 by 2010 (Comrnission, 1995).

Mediterranean Policy

As it was, trade agreements provided for duty-free

access to the EU for most of the MEDI2's industrial products and concessions for some agricultural produce, and the EU gave substantial financial assistance to the MED 12 in the form of
grants and loans. Despite the extent of these
arrangements, the EU decided to expand the scope
and depth of its ties to the MEDI2, partly out of
dissatisfaction with the results that had so far been
achieved by its Global Mediterranean Policy
(GMP), which had hitherto been the cornerstone
of its Mediterranean policy.
The EC's original Mediterranean policy began in the 1960s in the form of concessionary
trade agreements and was expanded to inc1ude
economic and financial cooperation under the
GMP, launched in 1972. Important economic and
political considerations underlay this program, inc1uding the EC's desire to check the expansion of
Soviet influence in the Mediterranean Basin
(Ginsberg, 1983, pp. 161-162). Despite its ambitious framework aimed at bringing Mediterranean
countries c10ser to the EC, several complications
prevented fulfillment of the GMP's goals (Yesilada, 1991, p. 361). First, because of the restrictive
nature of the Common Agricultural Policy (CAP),
the EC did not make substantial concessions for
agricultural imports. Second, despite qualifying
for duty-free entry, certain industrial goods (textiles and c1othing, shipping, stee1, synthetic fibers,
paper and paper products, machine tools, and
cars) often faced such nontariff barriers as quotas
because of the member states' des ire to protect domestic industries. A third concern was the economic and social problem of migrant workers and
their status in EC member states.
The difficulties faced by the GMP worsened
when Greece, Spain, and Portugal, three of the
countries covered by it, joined the Ee. This resulted in the EC becoming more Mediterranean
oriented, especially in the agricultural sector
(Tovias, 1990, p. 2). The agricultural produce of
these three countries was given direct access to the
other member states' markets, and imports from
nonmember Mediterranean countries suffered accordingly (Promfet, 1981; Yannopoulos, 1984).
As economic difficulties in the nonmember
Mediterranean countries worsened in the 1980s
and early 1990s, another undesirable development
surfaced in the form of Islamic fundamentalism,
which-because of its threat to political stability-increasingly alarmed EC member states. In

337

addition, serious unemployment in the Mediterranean countries meant that more people from
North Africa sought refuge in France and Spain.
Under these adverse circumstances, European officials began to search for an alternative strategy
to meet economic and political challenges in the
Mediterranean Basin. Following aseries of opinion papers from the Commission, the European
Council, at its meeting in Corfu in June 1994, invited the Commission to draft a new strategy for
the region. The Commission responded with a
proposal to create a huge free trade zone that
would span the EU and its North African and MiddIe Eastern partners (Commission, 1995); this became the basis of discussion at the Barcelona conference.
The Barcelona Dec1aration pledged to establish the putative Mediterranean Free Trade Area
and to link it through the EU to another free trade
zone with the countries of Central and Eastern Europe. In order to realize this grand design, the EU
will need to sign separate free trade agreements
with the MEDI2, and the Mediterranean partners
need to sign such agreements with each other. It is
hoped that the outcome will check chronic unemployment, promote economic development, and
stern Islarnic fundamentalism in the region. The
EU has association agreements with Israel, Morocco, and Tunisia and initialed an association
agreement with Jordan in April 1997. Relations
with Cyprus, Malta, and Turkey are stronger, as
these countries have applied for EU membership.
Indeed, Turkey has a customs union agreement
with the EU, and an EU-Cyprus customs union
was completed in 1997. Furthermore, the EU has
been negotiating association agreements with
Egypt and Lebanon, and preliminary talks for
such an agreement with Algeria are underway.
The EU is eager to begin talks with the Syrian and
Palestinian authorities when the time is right.
The Barcelona Dec1aration covers a wide
range of issues in EU-MEDI2 relations. The first
area is partnership in political and security relations. In this regard, the participants identified
peace, stability, and security in the Mediterranean
region as common assets that they pledged to promote and strengthen. Accordingly, they dec1ared
their commitment to the following principles and
objectives: respect for human rights and fundamental liberties (inc1uding freedoms of expression, thought, and association); the equal right of
people and the right to self-determination; nonin-

338

Mediterranean Policy

terference in each other's internal affairs; dispute

settlement by peaceful means; greater cooperation
in the fight against terrorism; stronger regional security through adherence to, and compliance with,
international agreements in such areas as the nonproliferation of nuelear, chemical, and biological
weapons; and aMiddIe East free of weapons of
mass destruction (nuelear, chemical, and biological) as weIl as their delivery systems. The declaration added that the signatories should reject arms
proliferation by not developing military capacities
beyond that needed for defensive purposes.
The second part of the deelaration called for
an economic and financial partnership to achieve
three important objectives: intensified efforts for
social and economic development, improvement
of individuals' living conditions by raising employment and reducing the economic gap within
the Euro-Mediterranean region, and promotion of
cooperation and regional economic integration.
The main vehiele for this part of the partnership is
the establishment of a free trade area, involving
the progressive elimination of tariff and nontariff
trade barriers on manufactured products and a
progressive liberalization of agricultural produce
and the services sector. The plan also ineludes an
increase in the EU's financial assistance to the
MED12 countries. Earlier, in June 1995, the European Council in Cannes agreed to an assistance
package of about ECU 4.7 trillion to the MEDI2,
spread between 1995 and 1999. The deelaration
also calls on the European Investment Bank to
make loans available to the MEDI2, in addition to
bilateral assistance from EU member states. Cooperation priorities inelude investment and joint
ventures, regional cooperation, fisheries, industry,
agriculture, rural development, energy, infrastructure, information technologies and telecommunications, research and development, and protection
ofthe environment (Yesilada, 1997).
The third leg of the deelaration is partnership
in social, cultural, and human affairs. This will involve cooperation in the fields of education and
training; social development; migration; media;
health care; cultural exchange; youth programs;
the fight against terrorism, international crimes,
corruption, racism, and xenophobia; and judicial
affairs (Commission, 1995).
Clearly, the Barcelona Deelaration is a grand
design that requires the serious commitment of all
parties concerned. In order not to lose momentum,

the deelaration calls for periodic foIlow-up meetings of the foreign ministers of the twenty-seven
nations to review progress and to agree on actions
to achieve the stated objectives. The deelaration
also foresees a special conference of ministers and
leaders from business and finance to discuss ways
to boost private sector investments in the MEDI2.
The Commission is responsible for preparing the
meetings and following up on them and for developing a work program to implement the deelaration through concrete actions.
The second Euro-Mediterranean conference
of foreign ministers took place in Valetta, Malta,
on April 15 and 16, 1997. Ministers reviewed the
activities so far undertaken under the Barcelona
Deelaration and developed guidelines for future
cooperation. However, the meeting was overshadowed by the Middle East peace process, not least
because it provided an opportunity for discussions
between the Israeli and Palestinian delegations.
Special Cases: Cyprus and Turkey
Cyprus and Malta present no real economic problems as potential EU members. Yet the possible
consequences of their membership for voting
rights in the Council of Ministers and the representation of small countries in other EU institutions are profound (Redmond, 1993). Before
Cyprus joins the EU, however, the island's political division needs to be addressed.
Cyprus has always maintained elose relations
with the EU and has had an association agreement
since 1972. Despite the division of the island into
the Greek Cypriot south (which represents the internationally recognized Republic of Cyprus) and
the Turkish Cypriot north, the EU had good lines
of communications with both sides until the decision of the European Council in June 1994 to open
negotiations on Cypriot membership six months
after the conelusion of the 1996-1997 intergovernmental conference. Since then, the Turkish
Cypriots, supported by the Turkish government,
have taken the position of the aggrieved party
(Yesilada, 1997). It would be a very serious problem for the EU to open negotiations and admit
Cyprus before resolution of the Cypriot crisis.
How the EU can solve the Cyprus problem, which
the UN and the United States have been unable to
resolve since 1963, is beyond comprehension. The
EU's position would be particularly weak because
its accession plans exelude any input from one of

Mediterranean Policy

the conflicting sides: the Turkish Cypriots. An additional problem with Cypriot accession is the apparent veto that the Turkish Cypriots have. According to the Cypriot constitution (Article 50,
Paragraph la), Cypriot membership in international organizations in which Greece and/or
Turkey are not members requires the consent of
both communities on the island.
Despite these problems, EU officials have indicated that a perpetuation of partition would not
prevent Cyprus's membership. This suggests that
the EU hopes to force the Turkish Cypriots to
make concessions in negotiating a settlement on
Cyprus. However, the threat also carries the risk of
further alienating the Turkish Cypriots and making them more rigid at the negotiating table. If so,
the EU may end up with only part of Cyprus as a
member and thereby inherit one of the international community's "unending" conflicts.
Turkey's application for EU membership resulted in a customs union rather than accession.
For econornic and political reasons, the EU cannot
afford to adrnit Turkey for the foreseeable future.
In every respect, Turkey's macroeconornic indicators are not comparable with those of the EU: inflation is above 80 percent; the budget deficit is
excessively high; unemployment is above 12 percent; and purchasing power parity, at $3,617, is
unacceptably low (the comparable figure in
Greece, the EU's poorest member state, is
$6,367). Economic disparities between the EU
and Turkey have grown despite rapid growth of
the Turkish economy since the late 1980s.
Politically, Turkey's level of democratic development fails to pass the EU's test for membership. Moreover, the rising Islarnic threat in Turkey
worries the EU, especially as the Turkish political
parties have failed to form a stable governing
coalition. Under these circumstances, the customs
union represents a safe comprornise between the
danger of rejecting Turkey's application and possibly alienating an important Western ally or of
admitting Turkey into the EU and risking huge
econornic costs that could bankrupt the CAP and
regional development funds.
Conclusion

Despite initial enthusiasm surrounding the

Barcelona Declaration, a number of factors
threaten to underrnine the declaration's effectiveness. First, the MED12 countries view each other

339

with great suspicion and the involvement of an

outside actor, like the EU, is unlikely to change
that reality. Unless the MED12 countries work together to build confidence and promote trade, existing suspicion, among their citizens and governments will not disappear. Second, the MED 12
countries can expect additional complications in
their relations with the EU, as three of their members stand to increase their bilateral ties to the EU:
Cyprus and Malta could become EU members in
the near future, and Turkey has a customs union
with the EU. As exports to the EU from these
countries gain special preference, aided by increased econornic integration between these countries and the EU, the other MED12 countries' exports to the EU could face even greater obstacles.
The EU's Mediterranean policy includes a
complex web of issues that present unique challenges. On the one hand, the Barcelona Declaration represents a new global approach to the region's problems. On the other hand, however, the
EU seems to be repeating its earlier practice of
providing preferential treatment to selected
MED12 countries at the expense of others. In this
case the possible memberships of Malta and
Cyprus and the customs union with Turkey could
have negative consequences for the other Mediterranean countries' trade with the EU. Doubtless the
objectives of the Barcelona Declaration are commendable, but one cannot help wondering how the
EU can successfully pursue so many different priorities and objectives.
See also CYPRUS; MIDDLE EAsT; TuRKEY.
Bibliography
Commission. 1995. "Barcelona Conference Establishes
a Euro-Mediterranean Partnership." Press Release.
Brussels. November 29.
Ginsberg, Roy. 1983. "The European Community and
the Mediterranean." In Juliet Lodge, ed., Institutions
and Policies 01 the European Community. New York:
St. Martin's.
Pornfret, Richard. 1981. "The Impact of EEC Enlargement on Non-Member Mediterranean Countries' Exports to the EC." The Economic Joumal91 (September), pp. 716--729.
Redmond, John. 1993. The Next Mediterranean Enlargement 01 the European Community: Turkey,
Cyprus, and Malta? Aldershot: Dartmouth.
Tovias, Alfred. 1990. Foreign Economic Relations 01 the
European Community. Boulder: Lynne Rienner.
Yannopoulos, George. 1984. "Prospects for the Manufacturing Exports of the Non-Member Mediter-

340

Member States

ranean Countries in a Community of Twelve." World

Development 12, no. 11-12 (December), pp. 10871094.
Yesilada, BiroI. 1991. "The EC's Mediterranean Policy."
In Leon Hurwitz and Christian Lequesne, eds., The
State of the European Community: Policies, Institutions, and Debates in the Transition Years. Boulder:
Lynne Rienner.
- - . 1997. "The Mediterranean Challenge." In lohn
Redmond and Glenda G. Rosenthai, eds., The Expanding European Union: Past, Present, and Future.
Boulder: Lynne Rienner.

-Birol A. Yesilada

Member States
The tenn member states refers to the countries of
the EU: Austria, Belgium, Denmark, Finland,
France, Gennany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden,
and the UK.

MERCOSUR
On December 15, 1995, the EU signed an interregional cooperation agreement with MERCOSUR,
the Southern Cone Common Market (Argentina,
Brazil, Paraguay, and Uruguay). The agreement,
which includes political as weH as economic aspects, signifies MERCOSUR's growing regional
importance and the growing importance of Latin
America in global trade. At the first annual ministerial meeting held under the agreement, in Luxembourg on June 10, 1996, both sides emphasized
the importance of stepping up cooperation, especially on measures to combat drug trafficking and
money laundering and to promote sustainable development and environmental protection.
See also LATIN AMERICA.

proved most mergers reported to it (only the largest

mergers are caught). Between September 21,1990,
when the merger regulation entered into force, and
June 30, 1996, the Commission received 477 notifications, of which 16 were later withdrawn. The
Commission conducted detailed investigations into
26 cases, prohibiting only five of them.
See also COMPETITION POLICY.

Merger Task Force

The Merger Task Force is the unit in the Commission's Competition Policy Directorate General
(DG IV) that investigates mergers referred to the
Commission under the tenns of the 1989 merger
control regulation.
See also COMPETITION POLICY.

Merger Treaty
The Merger treaty establishing a single Council of
Ministers and a single Commission for the three
European Communities came into force on July 1,
1967, more than two years after it was signed by
the EC's member states on April 8, 1965. The new
Commission began functioning on July 6, 1967;
simultaneously the tenns of office of the members
of the High Authority of the European Coal and
Steel Community (ECSC), the Commission of the
European Economic Community (EEC) , and the
Commission of the European Atomic Energy
Community (EURATOM) came to an end. Because of French president Charles de GauHe's opposition, Walter Hallstein, outgoing president of
the EEC Commis si on, was not nominated to become president of the new, single Commission;
instead, Jean Rey became its first president.
See also COMMISSION.

Merger Control

Messlna Conference

In 1989, as a logical accompaniment to the single

On June 1-3, 1955, in Messina, Sicily, the foreign

ministers of the six member states of the European
Coal and Steel Community (ECSC) met to discuss
the ECSC's future in view of Jean Monnet's decision to resign as president of the High Authority
and the future of European integration generally
in view of the recent rejection by the French parliament of the European Defense Community
treaty. Paul-Henri Spaak, the Belgian foreign minister, had prepared a memorandum on behalf of

market program, the Council of Ministers gave the

Commission authority to vet large-scale mergers in
the EU to verify the mergers do not violate antitrust laws. The merger control regulation came
into force in September 1990 and fiHed the last
great gap in the EC's competition policy. Because
the system established by the regulation calls for
notifications on the basis of turnover thresholds
rather than market power, the Commission has ap-

Middle fast

the Benelux countries suggesting further integration along the lines ofMonnet's idea for an atornic
energy organization and Dutch foreign minister
Johan Willem Beyen's idea for a common market.
The foreign ministers asked Spaak to form a committee and write areport on future options. The
Spaak comrnittee's deliberations led to the establishment of the European Economic Community
(EEC) and the European Atomic Energy Community (EURATOM). Symbolically, the first meeting
of the pre-1996 intergovemmental conference Reflection Group took place in Messina on June 2,
1995, on the fortieth anniversary of the original
Messina conference.

Mlddle East

EC policy toward the Middle East, taken as a distinctive geographic area, was not formulated until
the early 1970s. Before then, the EC had only established a contractual relationship with Israel
dealing exclusively with trade matters, first (1964)
on a nonpreferential basis and later (1970) on a
preferential basis. A broader approach toward the
Middle East, embracing almost all Mediterranean
nonmember states, was launched in 1972. This
was the so-called Global Mediterranean Policy,
which covered economic matters only (basically
trade and development assistance). The EC's first
initiative regarding the Middle East itself was
launched at about the same time, when, in the
wake of the 1973 Middle East war, the member
states tumed their attention to the Arab-Israeli
conflict and attempted to coordinate their foreign
policy positions through the mechanism of European Political Cooperation (EPC).
Subsequently, one of the EC's main activities
with regard to the Middle East was the Euro-Arab
Dialogue (EAD), involving the EC and the twenty
member countries of the Arab League. At the first
meeting, held on July 31, 1974, it was agreed that
a Euro-Arab General Comrnission and a number
of working parties would be set up. But there were
no tangible results from the EAD because the two
sides had a fundamentally different perception of
the procedure's nature and future: the European
side refused to tackle overt political issues, such
as Palestinian representation; the Arab side was
not eager to give specific assurances regarding the
supply of oil to European countries. The EAD
reached astalemate in 1978, after the historic

341

Camp David Accords between Israel and Egypt

(which resulted in Egypt's exclusion from the
Arab League). The EAD was resumed briefly in
1981 and again in 1989 and 1990, but collapsed in
the wake of Iraq's invasion of Kuwait.
Throughout the duration of the EAD, the
member states issued declarations through EPC
on the Arab-Israeli conflict. These evolved over
time in the direction of an increasing recognition
of Palestinian rights. Whereas in November 1973
the Palestinians were still considered refugees, albeit with "legitimate rights," by J une 1977 the
member states stressed the Palestinians' "right to a
homeland." The member states' famous Venice
Declaration of June 1980 went several steps further by supporting the right of self-determination
for Palestinians and the right of the Palestine Liberation Organization (PLO) to be associated in
any negotiation to resolve the conflict. As a kind
of consolation to Israel, the Venice Declaration
also mentioned the right of all states in the area to
live in peace and security, but the declaration went
on to criticize Israel's settlements policy. Moreover, the member states declared their willingness
to participate directly in a comprehensive peace
settlement. Significantly, the declaration came at
the height of the second oil crisis, which followed
the downfall ofthe shah ofIran in early 1979. The
timing might also explain a more active approach
to the Middle East on the part of the European
Council, whose subsequent communiques proposed solutions to the Middle East conflict that
combined carrots (economic aid to the Palestinians) and mainly sticks (in the form of minisanctions against Israel).
Before the Venice Declaration, EC aid to the
Palestinians was limited to refugee assistance;
thereafter a new approach prevailed, characterized
by direct assistance from the EC budget for the
Palestinian population (including compensation to
the Palestinians for the consequences of the Gulf
War) and by EC cofinancing with European nongovemmental organizations (NGOs) of Palestinian assistance programs.
On the trade side, beginning in 1986 the EC
granted preferences directly to the Palestinians,
without the latter having to make undue use of the
1975 Israel-EC Free Trade Agreement or having
to use Israeli export monopolies to market their
agricultural products. This change was highly
symbolic, because it treated the Occupied Territo-

342

Middle fast

ries (ar) as aseparate economic entity (whereas

the ar are in fact part of Israel's customs territory). The EC's so-called Council Guidelines of
1986, which stated that aid to the Palestinians
would be implemented without the EC's seeking
final approval from the Israeli authorities, contained the same political message. Beyond politics, it is also significant that for the first time the
EC established a link between peace and economic development in the ar.
Sanctions against Israel were used for the
first time shortly after the Israeli invasion of
Lebanon. In June 1982, EC foreign ministers
agreed to defer the signing of the Second Finandal Protocol between the EC and Israel and to
cancel a ministerial meeting of the Israel-EC Cooperation Council. Israel saw these measures as a
violation of an international economic agreement,
signed under the Global Mediterranean Policy,
which has nothing to do with the Israeli-Arab conflict. Financial cooperation was restored exactly a
year later, in June 1983, after Israel agreed to
withdraw from Lebanon. In December 1987, in
the wake of the intifada (a popular revolt of the
Palestinians against Israeli occupation), the European Parliament (EP) voted to defer indefinitely
ratification of the Third Financial Protocol of the
1975 EC-Israel agreement. Yet this sanction was
short lived: in October 1988, at the fifth attempt,
the EP finally agreed to ratify the protocol.
The Venice Dec1aration became the central
point of reference for EC policy toward the MiddIe East. For instance, in 1987 the European
Council called for an international conference on
the Middle East under UN auspices, on the basis
of the Venice Dec1aration. Again, in June 1989,
the European Council reiterated the Venice Dec1aration, asking explicitly for Palestinian participation in a peace conference. Subsequent dec1arations stressed the need for Israel to respect human
rights in the fight against the intifada. Moreover,
at their June 1990 summit in Dublin, the heads of
state and govemment agreed to send a Commission official as an ob server to the ar and to double the direct aid programs to the ar by 1992.
A new era in EC-Middle East relations
opened in the aftermath of the 1991 Gulf War,
when the Uni ted States and the USSR agreed to
sponsor an international peace conference and the
EC sought to become an active participant. Israel
reluctantly agreed in June 1991 to EC participation,
in return for a promise by the EC to review the

1975 EC-Israel economic agreement. However, the

role assigned to the EC by U.S. secretary of state
James Baker displeased the Europeans: the EC was
to have a kind of "observer status," its main role being confined to economic development issues.
Paradoxically, the ensuing peace conference took
place in Madrid, a Community capital.
Soon it appeared that the EC's role would be
more significant than initially thought. The peace
process was to be handled along two different
tracks: abilateral one dealing with conflict resolution (i.e., "the pase) and a multilateral one dealing
with the consolidation of peace (i.e., "the future").
The multilateral track was based on functional
economic cooperation, a concept at the core of
European integration. Five working groups dealt
with economic, social, and environmental issues.
In one of these groups, the Regional Economic
Development Working Group (REDWG), the EC
was in the chair; in another two, dealing with water and the environment, it was a cosponsor. As
REDWG was the largest group in terms of participants and possible projects, the EC became a major player in the multilateral track.
The Madrid conference and follow-up meetings assumed added importance when it transpired, in late 1993, that Israel and the PLO had
been negotiating a secret bilateral agreement (the
Oslo process). The international community, inc1uding the EC, strongly supported such a development. The EC responded in three ways. First, in
early September 1993 the Commission broadened
its approach to the Mediterranean to inc1ude regional cooperation in the Middle East, embracing
the Mashreq countries (Egypt, Jordan, Lebanon,
and Syria) and Israel, through a policy of progressive institutionalization.
Second, a short time later the newly launched
EU announced that, together with the international
community, it was about to embark on an ambitious cooperation program to develop the ar economically. Accordingly, the EU pledged ECU 500
million (half of which was to be made available by
the European Investment Bank) for the 1994-1998
period, making the EU by far the largest financial
donor. This placed the EU at the center of the Ad
Hoc Liaison Committee Coordinating International Aid for the Occupied Territories.
Third, at the REDWG plenary meeting in November 1993, the EU strongly supported the
Copenhagen Action Plan, which allocated ECU
9.2 million for an initial list of priority activities

Mitterrand, Franrois (7976-7996)

and corresponding feasibility studies. In June
1994 the group decided to establish a monitoring
committee to allow the "core parties" to playa
more direct role in the identification of priorities.
In March 1996 the monitoring committee secretariat was transformed into a permanent regional
economic institution based in Amman, Jordan, financed and served by the EU. This was a key step
in the institutionalization of regional dialogue, a
step weIl understood by the EU, with its history of
regional conflict resolution.
Equally important, in December 1993 the European Council identified the Middle East as one
of five priority areas in which to implement a joint
action on the basis of Article J.3 of the Treaty on
European Union's Common Foreign and Security
Policy (CFSP). Accordingly, the EU undertook to
promote democracy and human rights in the region. Later, in January 1996, the EU agreed to
send observers to the elections in the (Jf.
Given its apparently central role in the MiddIe East peace process, the EU was caught by surprise when the regional actors agreed to hold an
economic summit-essentially a huge business
forum supported by the Uni ted States and Russia-in Casablanca in October 1994. It was there
that the idea of creating aMiddie Eastern development bank took shape, an idea initially rejected by
the EU. The EU was also annoyed by the fact that
there was some overlap at the Casablanca summit
with items dealt with by the EU-chaired REDWG.
It looked to the EU as if the United States and
some regional actors were trying to steal the show.
Indeed, it can be argued that the Commission's
initiative for a Euro-Mediterranean Partnership,
which bore fruit in the Barcelona Declaration of
November 1995, was an attempt to counteract
what the EU perceived as an increasingly intrusive
U.S. role in the one area of the Middle East peace
process that the EU had made its own: economic
cooperation and development.
See also COMMON FOREIGN AND SECURITY
POLICY;

EUROPEAN

POLITICAL

Tovias, Alfred. 1990. Foreign Economic Relations 01 the

European Community. Boulder: Lynne Rienner.

-Alfred Tovias

Milan Summlt
The Milan summit in June 1985 was a watershed in
the history of European integration. Two main
items were on the European Council's agenda: the
Commission's white paper on the single market and
the report of the Ad-Hoc Committee on Institutional Affairs (the Dooge Committee). The heads of
state and government quickly approved the white
paper, but they argued fiercely over the Dooge
Committee's recommendations for reform of the
EC's institutions and decisionmaking procedure
and for an extension of Community competence.
Without a curb on unanirnity in the Council of Ministers, the European Council realized that the single
market program would never be implemented. But
British prime minister Margaret Thatcher, Danish
prime minister Poul Schlter, and Greek prime
minister Andreas Papandreou resisted the other
leaders' efforts to amend the Treaty of Rome and
instead advocated informal arrangements to improve legislative decisionmaking. FinaIly, Italian
prime minister Bettino Craxi forced the issue by
calling for an intergovernmental conference (IGe)
to negotiate treaty reform, as perrnitted under Article 236 (EEC treaty). When Thatcher, Schlter, and
Papandreou continued to object, Craxi took the unprecedented step in the European Council of calling
for a vote, thus paving the way for the IGe that culminated six months later in the Single European
Act. At the time the Milan summit seemed a disaster, with Britain, Denmark, and Greece isolated in
the Community; later the summit came to represent
a decisive first step on the road to the Community's
revitalization and transformation.
See also EUROPEAN COUNCIL; IN'rERGOVERNMENTAL CONFERENCE; SINGLE EUROPEAN ACT.

COOPERATION;

MEDITERRANEAN POLICY.

Bibliography

343

Allen, David, and Alfred Pijpers, eds. 1984. European

Foreign Policy-Making and the Arab-Israeli Conflict. The Hague: Nijhoff.
Hollis, Rosemary. 1997. "Europe in the Middle East:
Power by Stealth?" International Affairs 73(1):
15-29.

MItterrand, Fran~ols
(1916-1996)
Fran90is Mitterrand, president of France from
1981 to 1995, played a decisive role in shaping
and accelerating the European integration process.
His specific policies toward the EU evolved in response to changing international and domestic
contexts, but his fundamental view of Europe re-

344

Mitterrand, Fran~ois (1916-1996)

mained constant: the EU should serve as a vebic1e

to protect and enhance France's European and
world position.
Mitterrand's pro-European attitude was apparent yet muted in his early political career. As a
member of parliament he voted in favor of the 1957
treaties of Rome but believed that Africa rather than
Europe should be at the center of France's foreign
policy (Cole, 1994, p. 117). In the 196Os, he criticized President Charles de Gaulle's vetoes of
Britain's application for membership in the EC and
continued to express support for European integration. In the 1970s, disagreement within the French
political left over European integration, coupled
with Mitterand's role as leader of the Socialist Party
(PS), led him to avoid a strong pro-European stand,
although he was able to link the PS to a moderate
pro-European position.
In 1981, Mitterrand was elected president on
a platform that concentrated on domestic issues
such as unemployment rather than on European
affairs. Indeed, during the first two years of his
presidency, Europe was a secondary issue, as the
French government concentrated on implementing
Keynesian reflationary policies to stimulate economic growth. At the June 1981 Luxembourg
summit, Mitterrand did call for the establishment
of a "European social space" (espace social europeen) in order to relaunch the European integration process, but bis proposal generated little enthusiasm among his European partners. It was
only wheu the Freueh government's plan to reflate
the economy failed dramatically and the French
frane was devalued twice that Mitterrand realized
the centrality of the European marketplace and the
importance of the Franco-German relationship for
Franee's economie well-being. In 1983, in a CfUcial deeision, Mitterrand announced that the
French franc would remain in the European Monetary System, cementing France's economic Uturn to a conservative fiscal and monetary policy.
Moreover, the European dimension became the
most important priority of French policy, and Mitterrand became intimately and personally involved
in directing France's European policy.
By 1984, Mitterrand had conc1uded that
France needed actively and assertively to pursue
European integration. In his view, a Freneh foreign
policy of "grandeur" could only be aehieved if
backed by the weight of the EC led by France and
Germany. The benefits of integration would out-

weigh the eost of some loss of national autonomy

(de Swaan, 1994, p. 16). In January 1984, when
France took over the six-month Council presidency,
the EC was plagued by a number of divisive problems, inc1uding the question of the British contribution to the EC budget, reform of the Common Agricultural Poliey (CAP), and the applications of
Spain and Portugal to join the EC. By the end of the
Fontainebleau summit, held in June 1984, Mitterrand's personalleadership and willingness to make
concessions proved highly successful. The surnmit
had addressed the British budget coneems, agreed
to negotiations on Spanish and Portuguese entrance
into the EC, and launched the European Strategie
Program for Research and Development in Information Technology (ESPRIT) for cooperation in
high technology. Last but not least, an ad hoc comrnittee, chaired by Irish senator James Dooge, was
soon established to propose institutional reforms.
Mitterrand's 1984 initiatives were largely responsible for creating the momentum necessary to
propel the European integration process forward.
At the Luxembourg summit in June 1985, the
member countries agreed to the Single European
Act (SEA), an event that "consolidated Mitterrand's status as a prime initiator of moves towards
closer European integration" (Cole, 1994, p. 127).
The SEA not only provided for the completion of
the single market by January 1, 1993, but also introduced institutional reforms such as the principIe of qualified majority voting for many single
market proposals. Although Mitterrand remained
firmly committed to an EC controlled by intergovemmental institutions, he demonstrated a willingness to compromise to achieve greater European
integration vital to French national interests.
In 1988, Mitterrand was reelected president
of France in a campaign that stressed the importance of Europe and the need to proceed with Economic and Monetary Union (EMU), a common
defense policy, and a Social Charter. However, the
details of integration were quickly overshadowed
by the astonishing events of 1989 and after: the
fall of communism in Central and Eastem Europe,
the fall of the Berlin Wall and eventual German reunification, and the collapse of the Soviet Union.
Initially, Mitterrand expressed doubts over German reunification, fearing that it would unfavorably tilt the balance of power in Europe away
from France and toward Germany. But as it became c1ear that rapid German reunification was

Monetary Committee
inevitable, Mitterrand decided that France's most
advantageous policy res ted on tying Germany
more c10sely to Europe by accelerating European
integration under Franco-German leadership. The
result was the 1992 Treaty on European Union
(TEU).
The TEU was a success largely due to the
commitment of Mitterrand and Helmut Kohl, chancellor of Germany. As in the past, Mitterrand opposed any radical moves toward a supranational
Europe but was willing to compromise and allow
some greater measure of authority to the European
Parliament (EP) and the Commission. Mitterrand's
proposal for a Common Foreign and Security Policy (CFSP) was accepted, albeit with reservations,
and the Western European Union (WEU) was formally linked to the EU. Finally, and most important, the TEU called for EMU: the establishment of
a European Central Bank and a single currency by
1999 at the latest. In Mitterrand's view, monetary
union would underrnine the German central bank's
complete control of European monetary policy and
give France a voice in such affairs (Cole, 1994, p.
157). Mitterrand's personal success in shaping the
TEU was placed in doubt by his decision to ratify
the treaty by a national referendum. The "yes" vote
prevailed in the September 1992 referendum by the
narrowest of margins (51.04 percent to 48.95 percent), demonstrating that a large section of the
French public was apprehensive over Europe's direction. The TEU represented Mitterrand's last major European initiative. Parliamentary e1ections in
1993 led to a second period of cohabitation (a conservative majority in parliament sharing power with
a socialist president), which lasted until Mitterrand's second seven-year term as president of
France came to an end in 1995.
Fran~ois Mitterrand's reputation as one of
Europe's foremost statesmen is assured. He made
enormous strides toward achieving his vision for
France and Europe based on a strong Franco-German partnership, deeper integration (inc1uding
EMU), and a Common Foreign and Security Policy. His policies helped create an EU that has
changed the political and economic face of Europe. But perhaps his greatest legacies are the belief by an overwhe1ming number of French citizens that the EU is essential to France and the
belief by the vast majority of Europeans that the
EU is an essential part of their future.
See also FRANCE.

345

Bib/iography

Cole, Alistair. 1994. Franrois Mitterrand: A Study in

Political Leadership. New York: Routledge.
de Swaan, Jean-Christophe. 1994. "Mitterrand and the
Gaullist Dilemma over European Integration." International Relations 12, no. 2 (August).
Drake, Helen. 1994. "Fran-rois Mitterrand, France and
European Integration." In Gino Raymond, ed.,
France During the Socialist Years. Aldershot: Dartmouth Publishing.
Favier, Pierre, and Michel Martin-Roland. 1990. La Decennie Mitterrand. Vol. I, Les Ruptures. Paris: Editions du Seuil.
- - - . 1991. La Decennie Mitterrand. Vol. 2, Les
Epreuves. Paris: Editions du Seuil.
Haywood, Elizabeth. 1993. "The European Policy of
Fran-rois Mitterrand." Journal of Common Market
Studies 31, no. 2 (June).

-Pia Christina Wood

Mixed Agreements
Mixed agreements are international agreements
that cover areas of both EU and national competence and are therefore signed jointly by the EU
and its member states. Examples inc1ude the ambitious Europe Agreements, signed in the early
1990s by the EU, its member states, and the Central and Eastern European states.
See also CENTRAL AND EASTERN EUROPEAN
STATES.

Molltor Group
The so-called Molitor Group was established in
September 1994 under the chairmanship of Bernhard Molitor, a former senior official in Germany's ministry for economic affairs. Establishment of the group was one of a number of
initiatives to promote deregulation and competitiveness in the EU in the aftermath of the single
market program. Made up of seventeen independent experts, the group examined the impact of
EU legislation in four priority areas-sociallegislation, company law, environmental standards for
machinery, and food hygiene-and reported to the
Commission in July 1995.
See also SINGLE MARKET PROGRAM.

Monetary Commlttee
See ECONOMIC AND FINANCIAL COMMITTEE.

346

Monetary Compensatory Amounts (MCAs)

Monetary Compensatory
Amounts (MCAs)
Monetary Compensatory Amounts (MCAs) were
compensatory payments to farmers to bridge the
gap between green currencies (artificial exchange
rates introduced by the EC in the late 1960s in order
to maintain uniform, EC-wide prices in the Common Agricultural Policy) and real exchange rates.
See also COMMON AGRICULTURAL POLICY.

Monnet, Jean (1888-1979)

Jean Monnet, French statesman and "father of Europe," was the architect, strategist, and driving
force of the EC in the early years when its basic
features were established. Although a political entrepreneur, not an academic thinker, he was also
virtually alone arnong European founding fathers
in seeking to define the values of the new Community. Appreciation of these achievements has
been de1ayed by his anomalous career as a political innovator who was not an elected politician
and who therefore acquired the reputation of an
eminence grise.
Monnet was born in Cognac in west Francethe horne of brandy---on November 9, 1888, and
died ninety-one years later in Bazoches-sur-Guyonne, west of Paris, on March 16, 1979. His father,
Jean Gabriel Monnet, of peasant stock, became
chairman in 1896 of a cooperative of smallholders
originally formed in 1838 to compete with the giants of the brandy industry, the Hennessys and
their like. Monnet grew up in a merchant-patrician
house but hated school and left at sixteen to leam
English by working in the City of London. Two
years later, he began to roarn the world for the farnily firm (Europe, North America, Russia, Egypt)
with a paternal injunction: "Don't take books. Nobody can think for you. Look around. Talk to peopIe." All his life, Monnet valued action through
people and practice more highly than theory
(though he theorized from his own experiences),
traveled anywhere in the world at the drop of a hat
to advance a cause, and saw politics from the point
of view of the citizen rather than the state.
Monnet might have remained a businessman
had not war drawn hirn twice into public service.
Deelared unfit for the military in 1914, he
emerged as a elose adviser of Etienne Clementel,
who became French minister of trade and posts
late in 1915 and remained in govemment, acquiring ministries until, by 1918, he ran virtually the

whole civil economy except finance. Monnet becarne Clementel's agent for allied cooperation in
London and took part in setting up in late 1917 the
Allied Maritime Transport Executive (AMTE),
which controlled the scarcest resource, shipping,
and thereby rationed all Allied supplies. One contemporary called the AMTE "the most advanced
experiment yet made in international cooperation." When the League of Nations was set up in
1919, Monnet, only thirty but already a proved
force in the field, was appointed deputy secretarygeneral handling economic affairs.
Monnet eamed a strong reputation at the
league but had to leave at the end of 1922 to save
the farnily firm in Cognac. In 1926, he becarne
head of the European office of a major Wall Street
investment bank, Blair & Coy; until World War n
he worked as a financier, winning and losing a fortune between 1929 and 1932. Even in private business he carried out public operations similar to
those at the league: resolving disputes in Upper
Silesia and Austria for the league in 1920 and 1921;
negotiating loans for Blair in 1927 and 1928 to
launch recovery prograrns in Poland or Romania;
and in 1934, as a free1ance, conceiving the then outlandish device of joint Chinese-Western ventures to
invest in railways and modernize China. In the end,
the destructive 1930s negated most of these efforts.
Monnet's life between the wars shaped his
later career in at least two respects. One was that,
having observed the failure of international cooperation to stop the slump and the slide to war, his
European policies after 1945 assumed that cooperation meant nothing unless national vetoes were
curtailed. The other was that he forged strong
links through two decades of work based in the
United States. He was aprewar friend of lawyers
like Dean Acheson, John McCloy, John Foster
Dulles, and others who were to fashion post-1945
U.S. policies. His insider status with them was a
huge unseen asset after the war.
War brought Monnet back into public service
more or less where he had left off in 1918. From
1938 to 1943 he strove to nudge the United States
into becoming the "arsenal of democracy," a phrase
colleagues like McCloy ascribed to him. His main
impact carne after the fall of France in 1940, in
Washington, when he acted as a senior official in
the British Supply Council for war purchases in the
United States, though still a French citizen. The
United States was nonbelligerent, and isolationist
sentiment was strong and vocal. Monnet seems to

Monnet, Jean (7888-1979)

have suggested to like-minded officials in Franklin

RooseveIt's entourage many, if not most, of the tactics to prepare a Victory Program, involving huge
war-winning targets for arms production (100,000
warplanes and the rest to match), despite the isolationists. This strategy paved the way for RooseveIt
to be able to launch the program immediately after
the United States entered the war. In 1946, a elose
observer, Lord Halifax, Hritain's wartime ambassador to the United States, wrote that "Monnet was,
with such as Harry Hopkins, one of the real architects of our victory."
So it was that in February 1943 Roosevelt,
ho stile to the Free French leader, General de
Gaulle, sent Monnet to Algiers, where the Allies
had landed four months before. There Monnet was
to give political backbone to General Henri Giraud, the Americans' favored but inept French
leader in North Africa. The idea was to sideline de
Gaulle. Monnet had deeply distrusted de Gaulle's
egotism since both had promoted in London in
lune 1940 the abortive scheme for an AngloFrench Union to keep France in the war. Hut wedded to the idea of French unity, Monnet realized
Giraud had no political backbone to stiffen. So
Monnet acted as a marriage broker between Giraud
and de Gaulle in forming the French Committee of
National Liberation (CFLN) in Algiers in lune
1943, of which de Gaulle predictably emerged as
sole leader. Monnet sat on the CFLN and from
then unti11950 worked on French reconstruction.
Monnet negotiated a Lend-Lease agreement
with the United States in February 1945-late in
the war because of Roosevelt's continuing suspicion of de Gaulle. Then, in lanuary 1946, backed
by de Gaulle, Monnet launched the five-year investment and modernization plan known as the
Monnet Plan. Planning was in the air after the liberation as a means of repairing the economic decay of the 1930s and the destruction of wartime
German occupation. Hut ministries feIt threatened
by planning and had already blocked two such attempts, one by Pierre Mendes-France, based on a
highly centralized approach. Monnet changed
that. He presented planning not as a virtue in itself
but as a means of obtaining urgent U.S. aid now
that peace had cut off Lend-Lease. He agreed that
a plan "will be effective only to the extent that it
has been thought through and adopted as their
own by a broad enough swathe of the people involved." Subsequently, "modernization commissions" brought together civil servants, industrial-

347

ists, labor unions, and diverse experts. Monnet

asked for no formal powers but jealously guarded
his access to top ministers and to the funds.
The Monnet Plan succeeded in tapping the
widespread will for renewal in early postwar
France, but not without trouble. The Fourth Republic that took over from de Gaulle in 1946, ron
by a plethora of political parties, produced shifting
coalition governments lasting on average six
months. Monnet had constantly to renew his
courtship of the stage army of revolving premiers
and ministers. He succeeded on the whole because
he had stable tenure and was a known source of
ideas. Hut the Americans failed to provide dollars
in 1946 on the sc ale he had hoped, and crisis followed in 1947. The situation was saved by the
Marshali Plan's aid. Monnet's alliance with U.S.
aid officials and (less consistently) the French
ministry of finance ensured that his investment
programs got the lion's share of dollars. Gradually, by 1950, the Monnet Plan became a perceived source of success in a country widely regarded as the sick man of Europe. France' s growth
was not outstanding, but the plan was the vital first
step in the country's reconstruction as a modem
industrial state.
The position Monnet gained in French policymaking through the plan made possible his major achievement, the launching of the Schuman
Plan in 1950. Hitherto, "Europe" had been a big
theme for political orators speculating on a new
start, notably with Germany, but had not been
taken up by govemment. Now that the Americans,
backed by the Hritish, had created the Federal Republic as a Cold War bastion, Germany was soon
going to recover sovereignty, and France's postwar policies of controlling Germany through the
International Ruhr Authority were collapsing. A
new policy was desperately needed. Robert Schuman, the French foreign minister, provided it on
May 9, 1950, by proposing a federal-style Community of France and Germany, open to others (in
the event, Italy and the Henelux countries) and
confined to coal and steel, as a first step to a
united Europe. The Schuman Plan was Monnet's
scheme, and he immediately proved himself the
driving force and strategist behind it.
Monnet made a number of choices, highly
controversial at the time, that still shape the EU
today. The first was that Franco-German reconciliation demanded equal treatment between the two.
The Schuman Plan aimed at collective control not

348

Mannet, Jean (1888-1979)

only of the Ruhr but also of French coal and steel.

This entailed a commitment to the rule of law applied by COInmon bodies that is familiar in the domestic politics of democracies but in sharp contrast to the traditional balance of power between
states. As a policy transforming Franco-German
relations, this long antedated the treaty of friendship (Elysee treaty) signed in 1963 by Chancellor
Adenauer and President de Gaulle.
The second choice was to go ahead with Germany but not with an anti-integrationist Britain, a
breathtaking leap only five years after the war.
Monnet, a staunch supporter of British membership in the EC, rejected any British veto on action.
Integration was launched by a minority of states
and has always depended on a leading group. The
United States had more than replaced Britain as
the guarantor of the new policy. Without active
U.S. pressure, notably on the Ruhr magnates, a
treaty for the first of the three communities, the
European Coal and Steel Community (ECSC),
would probably never have been agreed to.
The third choice was to limit the federal experiment to coal and steel. The general approach to
union had already failed when the Council of Europe was set up in 1949. Monnet argued that it
would require practical experience of the ECSC to
lead, step by step, to further communities and European federation. His own initial vision of the ECSC
was of a kind of European Monnet Plan abstracted
from the nation states. When negotiations opened,
the Dutch insisted that governments be brought directly into the picture in a Council of Ministers.
Within a month, by July 1950, a compromise was
reached, and a pattern of Community institutions
emerged that remains (despite changes) the essence
of the system today.
Negotiations to set up the ECSC had hardly
begun when, on June 26, 1950, the Korean War
broke out, creating fears of a similar war in Europe
over divided Germany. The United States would
not position troops in Europe without a Western
European defense effort, inc1uding Germany. The
French were horrified. Monnet, fearing that a West
Germany allowed to rearm as a Western ally would
have no incentive to accept restraints within a European Community, persuaded the French prime
minister, Rene Pleven, to propose on October 24,
1950, a European Defense Community (EDC) parallel to that for coal and steel.
Monnet concentrated on the ECSC, which
began operating on August 10, 1952, after a long

tussle over decartelization of the Ruhr. Monnet

was president of the "first European Government,"
the ECSC High Authority. Earlier, on May 27,
1952, the EDC treaty had been signed by the
ECSC member states. But an increasingly passionate rejection in French political circ1es of all
German rearmament led to rejection by the French
National Assembly of the EDC treaty (already ratified by France's five partners) on August 30,
1954. The ECSC was weakened by the turmoil.
Monnet's presidency of the High Authority
quickly introduced the common market for coal
and stee1 and ended most open trade discrimination rooted in nationalist economic policies but
lost the battle to control the steel cartels backed by
governments. Boom conditions softened the impact of this defeat, however.
The failure of the EDC cast doubt on integration and focused opposition in France to Monnet
as the personification of "supranationalism." He
duly left the High Authority on June 10, 1955. Yet
the ECSC remained the model for subsequent efforts to "relaunch Europe." Monnet and PaulHenri Spaak, the Belgian foreign minister, proposed in April 1955 that a new Community for
civil nuc1ear power (the European Atomic Energy
Community-EURATOM) should be set up. The
Dutch foreign minister, Johan Willem Beyen, and
the Germans promoted a broader common market
instead. The two proposals were combined and finally led to the signing and ratification of the two
treaties of Rome, thanks primarily to a change of
government in France that brought in a pro-European socialist, Guy Mollet, as prime minister
(1956-1957). Fearing that the common market, in
order to succeed, would require more federalism
than was politically possible after the EDC fiasco,
Monnet concentrated on EURATOM.
De Gaulle's return to power in June 1958
ended Monnet's ability to "inspire" French governments. Having seen the EDC destroyed by a
political tidal wave, Monnet had set up a lobby in
October 1955, the Action Committee for the
United States of Europe (ACUSE), comprising the
leaders of all political parties and labor unions of
the EC member states except the communists, the
Gaullists, and their associates. This unique lobby
lasted until Monnet, at age eighty-six, dissolved it
in 1975.
Tacitly admitting his old underestimation of
the common market, Monnet tried from 1958 on
to make it the trampoline of political union. A plan

Mostar
for European monetary union was formulated as
early as November 1957. Monnet was attracted in
1961 to de Gaulle's Fouchet Plan for meetings of
heads of states, supranationalist though it was.
The ACUSE also proposed an "equal partnership"
between Europe and the United States before
President Kennedy's famous speech on that theme
on July 4, 1962. None of these fructified in Monnet's day, but his associate, Max Kohnstamm, with
a new Action Comrnittee, helped Jacques Delors
prepare Economic and Monetary Union (EMU) in
the 1980s.
The last decades of Monnet's activity, in politics but outside government, were important in giving expression to, and implanting, the only view of
Europe so far that has gone beyond arguments of
power or economics. Monnet's vision of European
integration as a way of applying civil and democratic norms of politics to interstate relations under
common institutions ("the pillars of civilization")
became more and more explicit from the 1950s on.
At the end of Monnet's life, he dreamed of a book
entitled Yesterday the Rule of Force; Today the
Rule of Law. This aspect of European integration is
confirmed by the eagemess of small states to join a
club that enhances their influence and security as
against great power directorates.
It is sometimes argued that the Community
method associated with Monnet is out of date in
the present no-man's-land between economic and
political union. Certainly, a full political union
implies a unitary system. Monnet's support for
the Fouchet Plan of 1961 and the European Council of 1974, which brought together heads of state
and govemment but not on Community lines, betrayed his own sense of a contrast between the
implications for union of "high" and "low" politics. Yet more or less far-reaching schemes such
as EMU and the European Police Office still suggest that the neofunctional approach has potential, notably because overt political union is not in
the cards.
See also ACTION COMMITfEE FOR THE UNITED
STATES OF EUROPE; EUROPEAN COAL AND STEEL
COMMUNITY; EURO PE AN DEFENSE COMMUNITY;
SCHUMAN, ROBERT.

Bibliography

Duchene, Fran<;ois. 1994. Jean Monnet: The First

Statesman oi Interdependence. New York: Norton.

-Franrois Duchene

349

Monnet Method
The traditional "Monnet method" of "integration
by stealth" refers to Jean Monnet's strategy to promote spillover from one economic sector to another and eventually from market integration to
political integration. Commission president
Jacques Delors used the Monnet method to transform the EC in the late 1980s. However, the Monnet method worked only for economic integration
and, largely because of its secretive nature, lost its
effectiveness when the single market pro gram began to affect people's everyday lives. Moreover,
the Monnet method proved largely ineffective at
promoting spillover from economics to politics.
See also MONNET, JEAN.

Monnet Plan
The Monnet Plan, officially called the Plan de
Modemisation et d'Equipement, helped to modemize and revitalize the French economy in the
immediate postwar years and to prepare France
for membership in the EC.
See also MONNET, JEAN.

Mostar
In the mid-1990s the EU undertook a highly publicized reconstruction and reconciliation effort in
Mostar, a city in Bosnia bitterly divided between
Croats and Muslims that came to symbolize the
failure of EU policy throughout the Balkans.
Mostar was destroyed in May 1993 as Bosnia's
Croats turned on the Muslims, their onetime allies
against the Serbs, in a bid to carve out achunk of
Bosnia to unite with Croatia. Croat forces expelled thousands of Muslims from the west side
onto the east bank of the Neretva River, and some
fifty-five thousand Muslims withstood nine
months of hunger and [Ire that destroyed much of
the Ottoman-era east bank, including the sixteenth-century stone bridge for which Mostar was
famous. The fighting ended with a U.S.-brokered
pact establishing the Muslim-Croat federation.
Member states sanctioned the EU administration
ofMostar as a Common Foreign and Security Policy joint action and appointed Hans Koschnik, formerly mayor of Bremen, as EU administrator
there. As part of a local peace agreement,
Koschnik directed an ECU 175 million reconstruction program and began the process of reunification by establishing a joint city police force

350

MRAs

(under Western European Union auspices) and a

joint govemment. But Koschnik's efforts were unavailing, and EU money was poorly spent.
Koschnik resigned in July 1996, leaving Mostar's
future in doubt. The EU's involvement in Mostar
was a costly disappointment and an embarrassing
symbol of the failure of EU policy toward the former Yugoslavia as a whole.
See also YUGOSLAVIA.

MRAs
See

EUROPEAN STANDARDS COMMITTEE; STAN-

DARDS AND CONFORMITY ASSESSMENT.

Multi-Speed Europe
See

DIFFERENTIAlED INTEGRATION.

Mutual Recognltlon
See

EUROPEAN STANDARDS COMMITTEE; REGULA-

TORY POLICY; SINGLE MARKET PROGRAM; STANDARDS AND CONFORMITY ASSESSMENT.

Mutual Recognltlon
Agreements (MRAs)
See

EUROPEAN STANDARDS COMMITTEE; STAN-

DARDS AND CONFORMITY ASSESSMENT.

N
NACC
See

NORTH A1LANTIC COOPERATION COUNCIL.

National Parllaments
The coming into force of the Treaty on European
Union (TEU) in November 1993 resulted in extensive constitutional reforms in some member states
(notably France and Germany) that amended the
role of national parliaments in EU affairs. In Belgium, Spain, Ireland, the Netherlands, and Portugal, speciallaws and agreements between govemment and parliament were adopted in order to
strengthen parliamentary scrutiny of European affairs. Concomitantly, national assemblies changed
their rules of procedure in order to consolidate
their capacities relating to European affairs (Masc1et and Maus, 1993).
These changes occurred in a c1imate in which
public opinion became more critical vis-a-vis the
integration process and its achievements. National
parliaments saw themselves faced with problems
that more and more called their institutional position and procedural function into question. This
was a new development, as national parliaments
had not been granted a significant role when the
Treaty of Rome was signed in 1957. Instead, their
involvement in EC affairs had been limited to approving amendments to the treaty and budgetary
arrangements. Notwithstanding, national parliaments had been provided with an organic link to
the institutional system of the EC in two ways.
First, unti11979, members of the European Parliament (EP) were drawn from national parliaments.
As a result, interested national parliamentarians
had an opportunity (however limited) to get involved in the EC decisionmaking process and to

establish informal but sometimes effective control

meehanisms in their national parliament. Provided
they were members of the national parliamentary
majority group, these Members of the European
Parliament (MEPs) could also influence their own
govemment and its representatives in the Council
of Ministers. Second, before the Single European
Act (SEA), nearly a1l important decisions adopted
by the Council of Ministers were taken unanimously, thereby giving govemments an opportunity to block decisions on grounds of national parliamentary reserve. Consequently, parliaments had
at least a formal possibility of influencing decisions at the European level through the control of
their respective govemments.
As a result of the SEA and the TEU, national
parliaments are affected by the extension of the
range of qualified majority voting in the Council
and the formal independence of the directly
elected EP from national parliaments. Furthermore, the increasing scope of EU activities is affeeting and undermining the traditionallegislative
function of national parliaments. At the same
time, provided they are the "national authorities"
to which Artic1e 189 of the Rome treaty leaves the
choice of form and methods in order to achieve
the results of a directive, national parliaments
have a growing role in the transposition of Community secondary legislation. Additionally, the
TEU granted national parliaments new approval
rights: conventions under Artic1e K.3.2[c], the use
of the so-called passerelle (gateway) c1ause in Artic1e K.9, and the extension of scope in matters regarding the creation of new rights by virtue of citizenship are subject to ratification in the member
states.
The transfer of national competencies to the
European level implies an immediate loss of legislative powers exercised by national parliaments
in favor of the Council of Ministers, the Commission, and, to a lesser extent, the EP. Only after the
introduction of the so-called cooperation procedure (Artic1e 189c) and the co-decision procedure
(Artic1e l89b) did the EP get important rights in
the field of EC legislation. Even under the TEU,
however, the transfer of national parliamentary
powers to the European level has not entailed a
transfer of those powers to the EP. As Nothomb
pointed out, "the transfer of powers from national
to European level has been larger and more rapid
than either the strengthening of the powers of the
European Parliament or the supervision by na-

351

352

National Parliaments

tional parliaments of the development of European legislation" (Nothornb, 1994, p. 12).

The loss of original legislative powers may be
compensated by an increase in the national parliament's control function. Following adecision by
Germany's upper house (Bundesrat) in 1957 to
create a special EC affairs committee, parliaments
in other member states established procedures and
institutions in order to scrutinize their governments' activities in the EC decisionmaking
process. Neverthe1ess, the degree of effective
parliamentary scrutiny varies significantly (Laprat,
1995, pp. 4-10; Norton, 1995).
Based on proposals by Britain and France during the 1991 intergovernmental conference (lGC),
the TEU inc1uded a dec1aration on the role of national parliaments in the EU (Corbett, 1993, pp.
61-62). Accordingly, governments are to ensure
"that national parliaments receive Commission proposals for legislation in good time for information
or possible examination." This dec1aration constitutes a discretionary provision without any legally
binding effect other than a welcome source of political debate and conflict between governments and
parliaments on the effectiveness of parliamentary
accountability in EU affairs.
Concerning the scope of scrutiny that results
from documents being forwarded to parliaments by
their governments, some assemblies have access
only to draft legislative proposals issued by the
Commission. Parliaments in Denmark, Belgium,
the Netherlands, and Germany mayaiso exarnine
green and white papers, recommendations, communications, resolutions of the EP, and acts relating to
Economic and Monetary Union (EMU), the Common Foreign and Security Policy (CFSP), and Cooperation on Justice and Horne Affairs (JHA). In
order to streamline the examination process, some
governments transmit not only the original EU documents but also fact sheets inc1uding an account of
possible consequences of the legal act for the member state's public authorities, enterprises, citizens,
state finances, and the environment. Finally, the
monitoring process may be acce1erated if parliament receives from the government additional
notes explaining the latter's position on a certain
legislative act and information about meetings that
take place below the level of the Council, such as of
the Antici group or the Committee of Permanent
Representatives (COREPER).
However, the scope of parliamentary scrutiny
may be restricted according to national hierarchies

of norms. This is the case in France, where parliament examines only those proposals for Community acts that inc1ude provisions of a "legislative
nature," thus only those acts that, if adopted in
France, would form part of the law within the
meaning of Artic1e 34 of the constitution. As a result, the French parliament examines only about
15 to 20 percent of the draft proposals sent to it
(De Berranger, 1995, p. 423; European Parliament, 1995, p. 32).
Effective scrutiny presupposes that parliaments receive draft proposals for legislation in
good time. In this connection, some rules goveming the parliamentary monitoring process in the
handling of European affairs oblige governments
to transmit the relevant documents at the earliest
possible date. In practice, the timing of scrutiny
varies according to the internal management of
European affairs on the governmental as well as
on the parliamentary level and depending on the
irnplications of parliamentary scrutiny powers for
the government's European policy. If ministers are
bound by national parliamentary decisions,
governments are politically obliged to forward the
relevant documents within a certain period to allow national parliaments to exarnine them before
the relevant Council meeting. In reality, however,
parliaments often receive documents only a few
days before the Council meets.
Finally, the implications of parliamentary
scrutiny are different in every national parliament.
Even under the TEU, the scrutiny power of some
parliaments is strictly limited to information gathering, without much effect on the government's
conduct of European policy. But many national
parliaments now aspire not only to know what legislation is pending in the EU but also to affect
their government's stance on it in the Council. In
Denmark, ministers get mandates on the basis of
which they can negotiate with their partners and
participate in any Council decision; they cannot
agree to a Council proposal if the process of national parliamentary scrutiny is incomplete. In
Britain, Parliament can ask government not to take
adecision in the Council until Parliament has had
an opportunity to examine the text. Similarly in
France, ministers were instructed in July 1994 not
to agree to any text in the Council if national
scrutiny procedures had not been conc1uded. Accordingly, if parliament expresses the intention of
exarnining texts of a legislative nature before the
Council, the French representatives in the Council

National Parliaments

spell out a parliamentary scrutiny reserve that has

the effect of suspending the Council decision.
This rule also applies to COREPER meetings.
National parliaments must constantly adapt
and adjust possibilities and arrangements for parliamentary activity in response to new Community legislation. In CFSP and JHA, the EP has no
right to colegislate with the Council, which alone
defines common positions and adopts joint actions and joint positions. Conventions drawn up
under JHA must be ratified only in the national
parliaments. National governments and parliaments have always been determined to keep control in the field of justice and horne affairs, regarding this as a manifestation of their sovereignty
and consequently a topic falling essentially within
their field of competence. As for procedural aspects of CFSP and JHA, there is no lack of
democracy in an intergovernmental pillar as long
as the national legislator is provided with the appropriate instruments to legislate and to control.
But practice shows that the participation of some
national parliaments in these two areas is rather
limited (Maurer, 1995, p. 95).
In this respect, the example ofthe French parliament is illustrative: in June 1994, the national
assembly's newly renamed Delegation for European Union Affairs asked to receive from the government all EU legislative acts having to do with
CFSP and JHA. Although the government agreed
to transmit documents relating to JHA, it did not
respond until October 1995 to the request for draft
acts drawn up by the Council in the framework of
CFSP. In some member states the role of parliament in the fields of intergovernmental cooperation is much more restricted, with parliaments being informed about progress on CFSP and JHA
only if their governments agree to a special demand. On the other end of the spectrum, some
parliaments are much more involved: the Danish
parliament applies its mandatory procedure in the
two intergovernmental pillars. Others, like the
Dutch second chamber or the Austrian Nationalrat, may approve the government's position on
proposals issued under the third pillar.
Although the role of national parliaments is
above all a matter for the particular constitutional
organization of each member state, inevitably the
question was addressed at the 1996-1997 IGC. Indeed, governments and parliaments forwarded
proposals to the IGC on granting the right to national parliaments to petition the European Court

353

of Justice when they believe that EC law infringes

the division of competence between the EU and
the member states or violates the principle of subsidiarity. Another proposal discussed at the IGC
had to do with the codification of "parliamentary
scrutiny reserves" exercised by some member
states in order to allow national parliaments the
necessary time to acquaint themselves with a draft
act on the Council's agenda.
In the event, the Amsterdam Treaty, which
came out of the IGC, included a protocol on the
role of national parliaments in the EU. This stipulates that all Commission consultation documents
will be "promptly forwarded" to national parliaments, that Commission legislative proposals
"shall be made available in good time so that the
government of each member state may ensure that
its own national parliament receives them as appropriate," and that a six-week period will elapse
between the Commission's sending a legislative
proposal or a proposed JHA measure "in all languages" to the Council and the EP and the Council's placing the proposal on its agenda for the
adoption of an act or a common position.
Alongside various unilateral control mechanisms, the EP and national parliaments have carried out different strategies based on interparliamentary cooperation in order to cope with the lack
of democratic accountability in the EU. The oldest
formula constitutes the Conference of Presidents
and Speakers of the Parliaments of the EU, which
meets once every six months. Although a welltried instrument, the conference is handicapped in
two ways. First, its powers are very limited because some presidents and speakers are not competent to speak either on political issues in an international arena or on behalf of their parliament.
Second, although the presidents and speakers attach great importance to interparliamentary control, other commitments prevent them from giving
adequate attention to the issue. In November
1989, the speakers' conference approved setting
up a Conference of European Affairs Committees
(CEAC) of national parliaments and the EP. This
new body meets twice a year in the country holding the Council presidency. In 1991 specific rules
of procedure were adopted. These laid down, inter
alia, the duration of meetings, their composition
and organization, and the fact that decisions must
be taken unanimously by those present. It has become a regular practice for the parliament organizing the meeting to distribute in advance a ques-

354

National Parliaments

tionnaire relating to issues on the agenda. Moreover, CEAC meetings are usually addressed by the
prime minister and foreign minister of the country
holding the Council presidency, and comrnissioners sometimes attend.
CEAC meetings may help develop a climate
of opinion in relation to specific issues. CEAC
faces major problems in going beyond questions
of a general and institution al nature because of
differences in national parliaments over the importance and role of EU affairs comrnittees in the
overall parliamentary process and over the powers
of such comrnittees in relation to those of specialist standing comrnittees. Nor is CEAC's composition representative, as most of the delegations are
not mandated by their respective assemblies.
Consequently, a third instrument of interparliamentary cooperation seems to be more appropriate for a systematic and policy-oriented monitoring process linked to the preparation and
application of EC law: since the adoption of the
SEA, the EP has invited national parliaments to
hold bilateral and multilateral meetings between
specialized EP and national comrnittees in order
to discuss items of EC legislation under consideration or in the pipeline. Although informal, these
meetings have informed opinions expressed by the
EP within the framework of the EU's legislative
procedures. They thus contribute implicitly to satisfying the need for more efficiency in the field of
EU legislation, in that the EP may be made aware
of potential and foreseeable problems in the transposition of proposed directives. Sirnilarly, the specialized comrnittees of national parliaments obtain
background information on the possible negotiating strategies and positions of other governments
and parliaments. As a result, both kinds of informal interparliamentary cooperation serve equally
to pro gram and systematize the parliamentary
scrutiny procedures in the parliaments of the EU.
In its dec1aration on the role of national parliaments in the EU, the TEU recognized the importance of interparliamentary control mechanisms. Moreover, as a result of the so-called
Assizes held in Rome in November 1990, which
brought together 173 national parliamentarians
and 85 MEPs in order to adopt a resolution on the
IGCs then in progress, another dec1aration invited
both the EP and national parliaments to "meet as
necessary as a Conference of the Parliaments." AIthough this dec1aration gave the Assizes a consultative role in the discussion of the "main features

of the European Union," there was only limited

enthusiasm for another such conference in the
framework of the 1996-1997 IGC. The main reason for this reluctance was that the concems of
parliamentarians from countries such as Britain
and France were not reflected in aresolution of
the earlier Rome conference, which was passed by
majority vote (Shackleton, 1995, p. 173).
With regard to EU institutional reform, several
ideas were suggested before and during the
1996-1997 IGC to involve national parliaments
more fully in the European policy process. The
French parliament considered that a European senate or standing interparliamentary comrnittee, made
up of an equal number of representatives from each
member state, could best represent national parliaments in the EU decisionrnaking process. Yet most
national parliaments opposed this, arguing that the
creation of new bodies would overload the EU's institutional framework. Instead, several parliaments
and governments suggested upgrading CEAC in a
pragmatic fashion in relation to the application of
the principle of subsidiarity and the functioning of
the second and third pillars. As long as CFSP and
JHA remain intergovernmental, with the EP having
virtually no legislative or consultative role, greater
and perhaps even formalized involvement of national parliaments in these pillars is likely to become a realistic option for the strengthening of parliamentary accountability in the EU. However,
although stipulating that CEAC "may make any
contribution it deerns appropriate for the attention
of the institutions of the EU," the Amsterdam
Treaty's protocol on the role of national parliaments made it c1ear that the conference's input
should be directed primarily at "the establishment
of an area of freedom, security and justice which
might have a direct bearing on the rights and freedoms of individuals."
See also EUROPEAN PARLIAMENT; LEGISLATIVE
PROCEDURES.

Bibliography

Corbett, Richard. 1993. The Treaty oi Maastricht. Harlow: Longman Information and Reference.
De Berranger, Thibaut. 1995. Constitutions nationales
et construction communautaire. Paris: Librairie
Generale de Droit et de Jurisprudence.
European Parliament. 1995. European Affairs Committees oi the Parliaments oi the Member States. BrusselslLuxembourg: European Parliament.
Laprat, Gerard. 1995. "Parliamentary Scrutiny of Community Legislation: An Evolving Idea." In Finn

The Netherlands
Laursen and Spyros A. Pappas, eds., The Changing
Role of Parliaments in the European Union. Maastrieht: European Institute of Publie Administration.
Masclet, Jean Claude, and Didier Maus, eds. 1993. Les
Constitutions nationales a l'epreuve de l'Europe.
Paris: La Docurnentation Franeaise.
Maurer, Andreas. 1995. Options and Recommendations
for Inter-Parliamentary Cooperation Between the
European Parliament and National Parliaments.
Study N /95120 for the European Parliament, Directorate-General N. Brusse1s: European Parliament.
Norton, Philip, ed. 1995. National Parliaments and the
European Union. Special Issue of Journal of Legislative Studies 1, no. 3.
Nothomb, Charles-Ferdinand. 1994. "The Role of National Parliaments and the European Parliament in
Building the European Union." The Brussels Review,
no.4.
Shackleton, Michael. 1995. "Inter-Parliamentary Cooperation and the 1996 Intergovemmental Conference." In Finn Laursen and Spyros A. Pappas, eds.,
The Changing Role of Parliaments in the European
Union. Maastricht: European Institute of Public Administration.

-Andreas Maurer

NATO
See NORTH ATLANTIC TREATY ORGANIZATION.

Nel
See NEW COMMUNITY INSTRUMENT.

Neofunctlonallsm
Neofunctionalism is a theory of regional integration first advanced by Emest Haas in the late
1950s. The critical explanatory hypotheses of neofunctionalism focus on the unintended or unexpected feedback of previous integration decisions,
termed "spillover." For Haas, the precise reasons
for initiating economic integration, often geopolitical, are relatively unimportant. Once economic
integration is launched, however, spillover tends
to create two types of press ure for an expansion in
the scope or intensity of integration. In economic
spillover, social groups demand further economic
integration in order to preserve or extend existing
gains. In political spillover, integration creates
new transnational and supranational actors, who
tend on balance to favor greater integration and
are advantageously placed to engineer it. Expectations and values eventually adapt to integration,

355

creating a transnational political community,

which in the end legitimates centralized regional
govemance.
See also INTEGRATION THEORY.

The Netherlands
The Dutch have areputation for being champions
of European integration, or so they think. Occasionally, the Dutch have provided substantial
pushes toward integration and cooperation. The
1948 meeting that led to the establishment of the
Council of Europe took place in The Hague; the
creation of the European Economic Community
(EEC) was inspired by a 1955 memorandum by
Dutch foreign minister Johan Willem Beyen;
Philips, a Dutch multinational company, played an
important part in the process leading to completi on of the single market; Euromindedness was
prominent in the rejected Dutch draft treaty on
European Union, submitted during the 1991 intergovemmental conference (IGC); and the Dutch
presided over the conc1usion of the 1996-1997
IGC. More generally, the Dutch have adecent
record when it comes to implementing EC legislation.
Nonetheless, Dutch enthusiasm for Europe
has been the result of a pragmatic assessment of
national interests rather than of an unmitigated
commitment to federalism. Indeed, the federal
route is quickly dismissed when it may conflict
with Dutch interests. Thus, the Netherlands insisted, at the eleventh hour, on adding a Council of
Ministers to the institutional structure of the
European Coal and Steel Community, if only to
protect the Dutch steel industry; it was Dutch foreign minister Josef Luns who for roughly a decade
tried to lure Britain into the Community, thus crippling the establishment of a Franco-German directorate; and when it came to foreign policy
cooperation, the primary Dutch attitude was one
of hesitation at best.
In general, when it comes to European
integration, Dutch behavior is characterized not
by unequivocal federalism but rather by a general
and pragmatic disinterest. The major political parties (always goveming in coalitions) have been
and remain by and large in agreement as to the
desirability of European economic integration.
The result is that debates in Dutch politics tend to
center on rather abstract, constitutional issues,
such as whether or not the powers of the European

356

The Netherlands

Parliament (EP) should be increased (most parties

routinely answer positively). Attempts to infuse
politics into the debate, such as the Labor Party's
position in the 1970s that Europe should be socialist or should not exist, usually are short-lived or
stern from the smaller parties on the far right and
left of the political spectrum.
An interesting recent development, however,
is the position taken by the conservative-liberal
Freedom and Democracy Party (VVD). Within the
VVD (well on its way to becoming the largest
party), traditional (if undefined) federalism is
somewhat on the wane. Nowadays, the VVD
advocates retaining decisionmaking by unanimity
in the second and third pillars of the EU as well as
an increased use of the principle of subsidiarity
and perhaps even the institutionalization of differentiated integration.
The VVD's emerging conception (the party is
still divided on the issue) may be partly the result
of a fear of losing the country's traditional Atlantic orientation in matters of security and defense. Since World War II the Dutch have looked
toward the United States for security and have
proved themselves reluctant to substitute an exc1usively European defense arrangement for U.S.
protection. A loss of sovereignty, especially in the
realm of security and defense policy, could result
in a loosening, perhaps even a cutting off, of those
traditional transatlantic bonds.
Another factor of some importance may be
that whereas the Dutch have traditionally benefited from European integration, recent developments (notably reform of the Common Agricultural Policy) have resulted in the Netherlands
becoming a net contributor to the EU's budget.
Some calculations suggest that by the year 2000
the Dutch will be the biggest per capita contributors. Thus, an important incentive to advocate European integration may slowly be withering away.
But perhaps the most important factor is that
previously the Dutch could easily afford to present
themse1ves as federalists. "Ever c10ser union" was
a vague phenomenon, hidden beyond the horizon
and never expected to become a reality. With the
entry into force of the Treaty on European Union,
however, and especially its provisions for Economic and Monetary Union (EMU), the mythical
goal of European union has suddenly taken on
some distinct features, urging political parties to
engage in a serious debate as to what sort of Europe they want. As a result, federalism may no

longer appear a viable option. From this perspective, the VVD is not so much backtracking as arguably becoming the first major Dutch political
party to take Europe seriously.
Interestingly, even rejection by most other
member states of the draft treaty in September
1991 hardly led to a serious reevaluation of Dutch
Europolicy. The defeat provoked comments on the
quality of Dutch diplomacy (apparently unable to
assess the European political c1imate correct1y),
and the influence (or lack thereof) of the Dutch on
the European scene but did not result in a serious
questioning of the wisdom of the more-or-Iess
federalist route.
Politicians' attitudes generally reflect those of
the electorate. European integration is by and
large regarded as a good thing but not as something to get overly excited about, as indicated both
by regular European opinion polls and by the
tumout at EP elections (notwithstanding the everincreasing presence of Dutch lobbyists on the European scene). Although a low tumout might indicate a high degree of satisfaction, the more
plausible explanation appears to be that it reflects
a high degree of disinterest.
Perhaps this general lack of interest can
partly be explained by historical considerations.
Often characterized as a "pillarized" nation, Dutch
politics could only proceed through a process of
accommodation at the elite level. While the public
at large remained tucked away in isolated pillars
(e.g., Catholics, Protestants, liberals, and socialdemocrats), their leaders were in constant contact
with each other to plan the course of the nation.
But this could only work if the public at large remained somewhat indifferent to what the elites
agreed to, a condition that correspondingly hinged
on the capacity of those elites to turn substantive
issues into issues of procedure. As long as fair
representation is guaranteed, the Dutch have been
raised to believe that the correct, or at least the legitimate, answer to any substantive problem will
almost automatically follow. It is no surprise,
therefore, that although the pillarized structure has
largely been dismantled, Dutch politics in general
tend to be sterile, focusing on procedure rather
than on substance. Dutch policy toward European
integration is no exception.
If it is true that Dutch Europolitics are largely
shaped by a proper assessment of Dutch interests,
then the underlying problem is to deterrnine what
those interests are and what the best way is to pur-

Neutrality

sue those interests. Here, opinions diverge. For

some, the fact that the Netherlands is a small nation indicates that, on its own, it would be virtually powerless in today's world. Hence, the Dutch
should seek refuge in supranational structures that
at least prevent domination by larger neighbors
such as Germany. The somewhat ambivalent
stance toward Germany-an important trading
partner and monetary anchor, increasingly the focal point of Dutch EU policy, but also still a bit
too c10se for comfort-may also partly explain the
traditional Dutch Janus-faced approach to the EU:
wanting economic integration in Europe but looking to the United States for security. Dutch reliance on trade and transit suggests that the Dutch
are best off endorsing free trade and the international role of law, as the seventeenth-century jurist
Grotius acknowledged. Indeed, an assessment of
Dutch national interests points to the advisability
of international (not necessarily supranational)
structures based on law and free trade.
Thus the question remains: which course better suits Dutch interests? The answer hinges on a
variety of issues. Perhaps the most urgent one relates to monetary union: should the Dutch continue to support EMU, or should they remain content to stay in the shadow of the German mark?
According to some, the latter option is preferable,
as monetary union could weaken the mark and
thereby hurt the Dutch economy. On another important policy issue, presumably the Dutch have
most to gain from the liberalization of the European transport sector. Traditional trading and transit
interests have created a comparative advantage in
transport, which can only be fully realized once
the transport sector has been liberalized. In other
policy areas, the benefits of European integration
appear less c1ear-cut, although developments in
the financial services sector seem advantageous
for the Netherlands.
In traditional fashion, however, other issues
of supposed political importance relate in fact to
matters of procedure, such as decisionmaking and
judicial review in the Common Foreign and Security Policy and Cooperation on Justice and Horne
Affairs and the need for greater transparency in
the legislative process. That such issues appear to
be the main focus of present Dutch policy toward
the EU indicates a recurring preference for procedure over politics. As a prominent Dutch parliamentarian once observed, "especially in our country, investing in Europe has always meant

357

investing in institutional matters, as a substitute

for politics." Paradoxically, Dutch preoccupation
with procedural issues creates the impression of
ambitious federalist aspirations.
See also APPENDIX 2; APPENDIX 3.

Bibliography

Bonnes, Jacque1ine. 1994. Uitvoering van EG-verordeningen in Nederland. Zwolle: Tjeenk Willink.
Griffiths, Richard T., ed. 1980. The Eeonomy and Polities ofthe Netherlands Sinee 1945. The Hague: Martinus Nijhoff.
- - - . 1990. The Netherlands and the Integration of
Europe 1945-1957. Arnsterdarn: NEHA.
Den Hartog, Arthur. 1994. "The Netherlands and the
Ratification of the Maastricht Treaty." In Finn
Laursen and Sophie Vanhoonacker, eds., The Ratifieation of the Maastrieht Treaty: Issues, Debates and
Future Implieations. Maastricht: European Institute
of Public Administration.
Jansen, Max, and J. K. de Vree. 1988. The Ordeal of
Unity. 2d ed. Bilthoven: Prime Press.
Klabbers, Jan. 1988. "Nederland en de EPS." Nieuw Europa 14, pp. 65-69.
- - - . 1990. "Europese integratie." In J. van Deth and
J. Vis, eds., Politieke problemen, pp. 478-495. Leiden: Stenfert Kroese.
- - - . 1993. Nederland op Europees peil: De EG na
1992. Leiden: Stichting Burgerschapskunde.
- - - . 1996. "Netherlands." In Roger Morgan and
C1are Tarne, eds., Parliaments and Parties: The European Parliament in the Politieal Life of Europe,
pp. 10-27. London: Macmillan.
Wo1ters, Menno, and Peter Coffey, eds. 1990. The
Netherlands and EC Membership Evaluated. London: Pinter.

-fan Klabbers

Neutrallty
During the Cold War, Europe's neutral states
(Austria, Finland, Sweden, and Switzerland) did
not apply to join the EC, which the Soviet Union
characterized as an economic arm of NATO. Yet
Ireland, a nominal neutral, joined the EC and participated in European Political Cooperation, the
member states' foreign policy coordinating procedure. The vastly different historical, geographical,
and strategic circumstances of Europe's other,
"real" neutrals, however, prec1uded their membership in the EC. Only with the end of the Cold War
did they apply to join, while at the same time eschewing both NATO and full Western European
Union membership. Austria, Finland, and Sweden
joined the EU on January 1, 1995; Switzerland

358

New Approach

shelved its application after rejection of proposed

membership in the European Economic Area in a
December 1992 referendum. The EU's new neutral member states had no difficulty participating
in the Common Foreign and Security Policy but
remained wary about the possible development of
an EU defense policy. Although in post-Cold War
Europe neutrality had little practical meaning, it
remained a cherished symbol for Austria, Finland,
and Sweden.
See also AUSTRIA; FlNLAND; SWEDEN.

New Approach
See STANDARDS AND CONFORMITY ASSESSMENT.

New Commerclal
Pollcy Instrument

ration but went far beyond it in terms of the range

and specificity of commitments undertaken. The
program is subject to a rolling process of review
and renewal as items are added to and crossed off
the action plan.
See also U.S.-EU RELATIONS: THE POUTICS
OF PARTNERSHIP; U.S.-EU RELATIONS: TRAnE AND
INvESTMENT.

New Transatlantlc Marketplace

The New Transatlantic Agenda identifies the establishment of a New Transatlantic Marketplace,
with few barriers to the movement of goods, services, and capital, as a U.S.-EU objective.
See also U.S.-EU RELATIONS: THE POLITICS
OF PARTNERSHIP; U.S.-EU RELATIONS: TRAnE AND
INvESTMENT.

In 1984, the EC adopted the New Commercial

Policy Instrument as a protective device against illicit trade practices that affected EC exports as
weIl as imports. When illicit practices were
proved to exist, the instrument allowed the Council of Ministers to introduce various retaliatory actions, including increasing the level of import duties and the application of import quotas.
See also COMMON COMMERCIAL POUCY.

With the accession of Britain, Denmark, and Ireland to the EC in 1973, the number of member
states became nine. Thus Nine was the name by
which the EC was sometimes known until the accession of Greece in 1981 (when the Nine became
Ten) and the accession of Spain and Portugal in
1986 (when the Ten became Twelve).

New Communlty
Instrument (NCI)

See SINGLE MARKET PROORAM.

The New Community Instrument (NCI) was introduced in 1977 to supplement the EC's structural
funds, specifically by assisting industrial investment and infrastructural development in association with loans and technical advice from the European Investment Bank (EI). The NCI was
discontinued in 1990.

New Transatlantlc
Agenda (NTA)
On December 3, 1995, U.S. president Bill Clinton,
European Council president Felipe Gonzalez, and
Commission president Jacques Santer signed the
New Transatlantic Agenda (NTA) at a U.S.-EU
summit in Madrid. The NTA, comprising a set of
agreed principles and common concems, included
a Transatlantic Action Plan, a checklist of policy
goals to be pursued by both sides. The agenda and
action plan built on the 1990 Transatlantic Decla-

Nlne

1992 Program

Noel, Emlle (1922-1996)

Between 1958 and 1987, during almost thirty
years as secretary-general of the Commission,
Emile Noel served under Commission presidents
Walter Hallstein, Jean Rey, Franco Malfatti, Sicco
Mansholt, Fran<;;ois-Xavier Ortoli, and Roy Jenkins. Noel played a key role in the EC's deve1opment over three decades: often his clever insights
and subtle suggestions cut to the core of a particular problem and helped resolve an otherwise intractable issue. Noel's formal involvement in European affairs began in the Council of Europe,
where he served as secretary of the General Affairs Committee of the Consultative Assembly between 1949 and 1952. For two years after that he
directed the secretariat of the Constitutional Committee of the ad hoc assembly charged with drafting plans for a European Political Community. In

North Atlantic Cooperation Council (NACC)

359

the mid-1950s Noe1 served as chief personal assistant to Guy Mollet, fIrst when Mollet was president of the Consu1tative Assemb1y of the Council
of Europe and 1ater when he became prime minister of France. Thus Noe1 was intimate1y involved
in Mollet's maneuvering during the disastrous Anglo-French military intervention in Suez in 1956.
After Noel's retirement from the Commission, he
became president of the European University Institute in Florence.
See also COMMISSION.

foreign and defense ministers established guidelines for the WEU's development in light of the recently signed Treaty on European Union. SpecifIcally, the Noordwijk Declaration addressed WEU
enlargement, pledged support for conflict prevention and peacekeeping efforts in cooperation with
the Organization for Security and Cooperation in
Europe and the UN, and announced the establishment of a planning cell for future operations.
See also WESTERN EUROPEAN UNION.

Nomination Procedure

Established in 1952 to promote regional economic

and political cooperation, the Nordic Council has
fIve members (Denmark, Iceland, Norway, Sweden, and Finland) and two institutions (a parliamentary assembly and aministerial body). After
Sweden and Finland joined the EU in January
1995, Iceland and Norway became the Nordic
Council's odd men out: the only Nordic countries
not also in the EU. The split between EU and nonEU member states undermined the cohesion and
effectiveness of the Nordic Council, especially in
the aftermath of Norway's bitter referendum on
EU membership in November 1994.

The Commission president is nominated by the

European Council, and the other commissioners
are nominated by the member states. The nomination and subsequent approval procedures, which
may affect the legitimacy of the Commission in
particular and the EU in general, are the subject of
an on-going political struggle between the European Parliament and the European Council.
See also COMMISSION; EUROPEAN PARUAMENT.

Noncompulsory Expendlture
The two categories of EU expenditure are compulsory and noncompulsory. The distinction between
them is based on the treaties: compulsory expenditure results necessarily from treaty commitments or
from acts adopted in accordance with the treaties,
whereas noncompulsory expenditure covers policies and activities not specifIcally provided for in
the treaties. The structura1 funds are the largest item
of noncompulsory expenditure, over which the European Parliament has considerable control.
See also BUDGET.

Nonpaper
A nonpaper is an unofficial draft treaty or agreement put on the table (usually by the Council presidency) to move negotiations along. The Luxembourg presidency's nonpaper, presented during the
1991 intergovernmental conference on political
union, is probably the best known such stratagem.
See also INTERGOVERNMENTAL CONFERENCE.

NoordwlJk Declaratlon
At a meeting in Noordwijk, the Netherlands, on
June 19, 1992, Western European Union (WEU)

Nordlc Councll

North Atlantlc Cooperatlon

Councll (NACC)
At a summit in Rome in November 1991, NATO
leaders agreed to create a North Atlantic Cooperation Council (NACC) as a framework for security
cooperation between the Atlantic Alliance, its former Warsaw Pact adversaries, and other European
states. The NACC held its inaugural meeting on
December 20, 1991, with the participation of
twenty-fIve countries. Following the dissolution of
the Soviet Union, which took p1ace on the same
day, membership in the NACC was opened to include all former Soviet republics. The NACC
holds at least one regular meeting per year, at ministeriallevel. However, the NACC has been overshadowed and largely supplanted by the Partnership for Peace (PfP) program, established by
NATO in January 1994. PfP establishes closer relations between NATO and European states not in
NATO, including joint defense planning, military
exercises, and permanent facilities for the nonmembers at NATO headquarters in Brussels.
See also NORTH ATLANTIC TREATY ORGANIZAnON.

360

North Atlantic Treaty Organization (NATO)

North Atlantlc Treaty

Organlzatlon (NATO)
The North Atlantic Treaty Organization, commonly known as NATO and also known as the Atlantic Alliance, is based on the North Atlantic
treaty signed in Washington, DC, on April 4,
1949, by ten Western European countries, the
United States, and Canada. The current members
of NATO (1998) are Belgium, Canada, Denmark,
France, Germany, Greece, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain,
Turkey, the Uni ted Kingdom, and the United
States. The Czech Republic, Hungary, and Poland
are due to join in 1999, on the fiftieth anniversary
of the Washington treaty.
Before the Atlantic Alliance was launched in
1949, five West European countries, which were
also founding members of NATO, coneluded an
alliance among themselves through the Brussels
treaty in March 1948. Both alliances were conceived as defensive coalitions in response to expansionist behavior in Europe by the Soviet Union
during the early Cold War years. The elose proximity in the establishment of the two coalitions exemplified a characteristic of the postwar transatlantic relationship: U.S. security guarantees to
Europe linked to Europe's own measures of selfdefense and a common Atlantic-level civilian and
military institutional framework.
The Soviet-supported North Korean invasion
of South Korea in June 1950 provoked concern in
the West that Moscow was becoming more aggressive and that a stronger NATO po sture in Europe was required. The alliance's response of balanced collective forces, whereby member states
contributed military assets to NATO-level organizational and command structures, had far-reaching implications for U.S.-West European relations
and for the fledgling European unity movement.
In particular, an asymmetry developed whereby
major European security issues were dealt with at
the Atlantic (NATO) level while economic integration went forward on a European level. Efforts
to elose the gap by creating a European nueleus in
defense proved unsuccessful when the European
Defense Community (EDC) treaty was rejected by
France in 1954. Shortly afterward the Western European Union (WEU) was established, based on
the Brussels treaty, though it was largely a consultative body and lacked a European-Ievel military
command structure. The effect was to reinforce
the primacy of NATO in European security mat-

ters and to deepen the asymmetry between Atlantic and European institutional and policy levels-an imbalance that continued into the
post-Cold War period.
During the 1960s strains deve10ped in the alliance as a result of Soviet military advances. Previously NATO had relied on nuelear weapons for
deterrence and for retaliation if deterrence failed.
Yet the growing U.S. vulnerability to a Soviet nuelear strike eroded the credibility of NATO's nuelear reliance doctrine and pushed the United
States toward a flexible response strategy that envisaged a retaliation by NATO conventional (nonnuelear) forces to a conventional attack by the Soviet-Ied Warsaw Pact. Some European critics
argued that the new strategy weakened deterrence
of aggression with conventional forces by implying that NATO nuelear forces were intended primarily to deter a nuelear attack. Nevertheless, following U.S. efforts to reassure its allies, ineluding
expanded European participation in NATO nuelear planning, the flexible response strategy was
adopted by the Alliance in 1967.
Despite the continuing NATO-Warsaw Pact
military confrontation, following the Cuban missile crisis (1962) a thaw in the Cold War ensued
until the mid-1970s, only briefly interrupted by
Soviet military intervention in Czechoslovakia in
1968. NATO's adjustment to the more favorable
East-West elimate was signaled by the Harmel Report on the alliance's future tasks, which affirmed
NATO's twin purposes of defense and detente.
Adopted by the alliance in 1967, the Harmel Report undergirded subsequent Western initiatives
aimed at stabilizing and eventually ending the
Cold War.
NATO's adjustment to changes in East-West
relations in the 1960s was buffeted by political
turbulence within the alliance. In 1958 French
president Charles de Gaulle, a vigorous advocate
of his country's independence and international
status, proposed a U.S.-British-French directorate
within the alliance that would design political and
military strategy for the free world and, if necessary, make decisions on the use of nuelear
weapons. The United States opposed this initiative
largely because it would have formalized a privileged political roIe for the three powers and created a potentially divisive hierarchy of status
within the alliance. Relations with NATO were
strained thereafter, and de Gaulle withdrew
French forces from NATO's integrated military

North Atlantic Treaty Organization (NATO)

command in 1966, though France continued to

participate in other alliance activities. France also
experienced problems with its European allies
over de Gaulle's proposa1 in 1961 (the Fouchet
Plan) to create a European po1itical union that
wou1d deve10p a common foreign and defense
policy alongside the already established EC. Despite lengthy negotiations, the project failed
large1y because of the other member states' resistance to de GauIle's intergovemmental rather than
supranational approach and their suspicions that
he sought to elevate French independence to a European level, which could undermine the unity of
the Atlantic Alliance. France's position was somewhat vindicated later on when European Political
Cooperation, the EC's foreign policy coordination
procedure that began in the 1970s, and more recent efforts to shape a Common Foreign and Security Policy (CFSP) proceeded essentially on the
basis of intergovemmental cooperation.
Tbe latent tension between Atlantic and some
European approaches to defense surfaced in the
1980s in the context of European efforts to reactivate co operation in defense through the WEU.
Given its status as the only multilateral European
body with a mandate in defense, and its already
established organization and charter (including a
tighter mutual defense commitment than that of
NATO), the WEU had obvious advantages. In
1984 the WEU adopted a broad agenda for its deliberations-including defense, arms control, and
East-West relations-that paralleled issues also
taken up in NATO and that provoked U.S. concems over the implications of aseparate European
caucus ofNATO members that could riYal or challenge U.S . leadership in the alliance. Nevertheless, the WEU's revival received another boost
following the U.S.-Soviet summit in 1986 that
launched superpower arms control diplomacy. Tbe
summit culminated in agreement to eliminate U.S.
and Soviet intermediate-range nuclear forces,
most of which were deployed in Europe. Although
this arms reduction step generally was viewed
positively in Europe, it also underscored Europe's
security dependence on superpower diplomacy.
Tbe Cold War had certain anomalous effects
on the alliance. On the one hand, different U.S.
and European perspectives on dealing with the Soviet Union and handling East-West issues in general often generated friction in transatlantic relations. On the other hand, the Cold War milieu and
the formidable Soviet military presence in Europe

361

moderated U.S.-European differences so as to preserve the alliance's political cohesion and defense
preparedness. Moreover, Europe's growing capacity and disposition to act independently on economic matters through the EC contrasted with its
continued security dependence on the United
States through NATO.
Tbe ending of the Cold War, and hence the
lessened (or at least altered) importance of NATO
as a military coalition, changed the nature of the
traditional West European security dependence on
the United States. Yet a central role for the alliance
as part of the structure for stabilizing and steering
Europe's post-Cold War transition was widely supported on both sides of the Atlantic, not least because of the latent possibility of some future hegemonic ambitions by the Soviet Union (later Russia)
or, however remote, by the newly unified Germany
as weIl as because of potential conflict within Europe, for example, in the former Yugoslavia.
NATO ministerial and summit meetings in
1991 showed that despite the end of the Cold War,
North Arnerica remained permanently tied to the
security of Europe. Tbe meetings we1comed the
emergence of a European identity in security and
defense through the WEU but pointedly noted that
NATO remained the forum for agreement on policies related to its members' commitments under
the NATO treaty. It was also recognized that transparency and complementarity (nonduplication)
should obtain between the Atlantic Alliance and
the defense and security policy activities of the
WEU and EC member states. Tbe WEU, in particular, was viewed as a bridge between NATO and
the newly established EU. Finally, the expectation
was expressed that as European defense cooperation in NATO progressed, the European members
of the alliance would assurne greater responsibility for their own defense. To facilitate this change,
in January 1994 NATO leaders innovated the concept of combined joint task forces that envisaged
the development of separable but not separate military capabilities that could be used by NATO or
the WEU. This new step opened the possibility
that European NATO members, acting through the
WEU, could utilize NATO military assets for operations in which the United States might choose
not to take part.
Further steps to harmonize NATO and European approaches to defense were achieved by
agreement that the Eurocorps, a rapid reaction
force that became fully operation al in 1995, would

362

Norway

come under NATO comrnand in time of war if approved by its European contributors. Thus both
the NATO-Eurocorps relationship and the agreement on combinedjoint task forces signaled flexibility in reconciling European and Atlantic approaches to defense.
Similarly, in 1995 French policy under President Jacques Chirac aligned more closely with
NATO, expanding upon the improvement in
French-Alliance relations begun earlier by President Fran~ois Mitterrand. In particular, France announced that it would return to NATO's Military
Committee, the alliance's highest military planning body, and that it would become active in
NATO deliberations at the ministerial level. Even
though the move was prompted by the practical
need to coordinate French military activities in
Bosnia with those of NATO, the announced
longer-range aim was to strengthen the European
pillar of the alliance, in particular the WEU. The
action also signified French recognition that for
the foreseeable future NATO would remain the
centerpiece of post-Cold War European security.
The ending of East-West military confrontation, the breakup of the Soviet Union, and the
spread of democratic movements and economic
privatization in Central and Eastem Europe and
the former Soviet Union prompted NATO to adopt
measures to help stabilize the new situation and to
guide Europe's post-Cold War transformation. In
1992 alliance members endorsed the principle of
furnishing military peacekeeping assistance in areas outside NATO's defense perimeter at the request of the UN. An early application of NATO's
new role came in December 1995 when the alliance assumed the task of safeguarding implementation of an agreed peace plan for Bosnia, including interposing NATO forces between the
nascent Croat-Muslirn federation and the Bosnian
Serbs. The NATO-Ied forces, numbering some
sixty thousand troops from thirty-two countries
(including the United States and Russia), represented the largest military operation in the alliance's history.
In 1991 the North Atlantic Cooperation
Council was formed to begin regular dialogue on
political and security issues between NATO govemments and former members of the Warsaw Pact
and states of the former Soviet Union. In a similar
move, the January 1994 NATO summit established the Partnership for Peace program, which
provided for expansion of NATO relations with

former Warsaw Pact and other European states on

an individually tailored basis, including joint defense planning, military exercises, and permanent
facilities at NATO headquarters in Brussels.
Finally, NATO's most serious issue in the
second half of the 1990s was its prospective eastward enlargement to embrace the Central and
Eastem European states who desired a security
shield and safeguards from any Russian neoimperialist tendencies. Most of these states also desired
membership in the EU to further extend and solidify their ties with the West. Although the alliance
was comrnitted to the principle of enlargement,
whereby admitted states would assurne full membership responsibilities, a precise timetable was
avoided until the NATO summit of July 1997,
when the first of the Central and Eastem European
prospective members (the Czech Republic, Hungary, and Poland) were invited to join. At the same
time, NATO's expansion was directly linked to
strenuous efforts to allay Russian concems that
enlargement would adversely affect its security.
These efforts culminated in the Founding Act on
Mutual Relations, Cooperation, and Security
signed between NATO and the Russian federation
in May 1997. Thus the expansion issue was part of
the wider task of devising a viable post-Cold War
European-wide security structure that included
Russia.
See also COLD WAR; WESTERN EUROPEAN
UNION; APPENDIX 3.
Bibfiography
Algieri, Franco, Josef Janning, and Dirk Rumberg, eds.
1996. Managing Security in Europe: The Challenge
of Enlargement. Washington: Brookings.
Crornwell, William C. 1992. The United States and the
European Pillar: The Strained Alliance. New York:
St. Martin's.
Gornpert, David c., and Stephen Larrabee, eds. 1997.
America and Europe: A New Partnership for a New
Era. Cambridge: Cambridge University Press.
Gordon, Philip, ed. 1997. NATO's Transformation: The
Changing Shape of the Atlantic Alliance. Lanham,
MD: Rowrnan and Littlefie1d.

-William C. Cromwell

Norway
The explanation for Norway's aloofness from European integration can be found in the country's
short history of independence (since the dissolution of the union with Sweden in 1905) and in a

Norway

very young nationalism-nation-building in Norway began only in the nineteenth century and continues today. Geographical location (far from the
continent), a dispersed population pattern, and
economic independence due to oil revenues are
other factors. Moreover, Norwegian foreign policy
has a traditional Atlantic orientation (Riste, 1985).
By comparison, only in the last three decades has
European integration been on the political agenda.
Indeed, Norway applied for EU membership because of perceived necessity. Much of the political
elite has favored membership for both political
and econornic reasons, but the electorate has been
deeply skeptical of the EU and of any other form
of binding international comrnitrnent.
An emphasis on neutrality and isolationism
runs deep in Norwegian history. Instead of strategic considerations, Norwegian foreign policy has
been concentrated around trade policy, shipping,
and fishing (Lundestad, 1985). Indeed, the dissolution of the union with Sweden was partially
based on Norwegian fears of being implicated in
"high politics" on the Continent (Riste, 1985).
Foreign policy originally took the form of "moral
politics": a rnissionary attitude that rejected realpolitik and embraced the strong puritan form of
Christianity that underlay a strong missionary
movement (Mj~set, 1996). A type of secularized
missionary zeal in foreign policy, perhaps most
typical of the Scandinavian countries, can still be
discerned today (Matlary, 1993).
Norway's emphasis on moral rather than
strategic considerations resulted in a policy of
neutrality during both world wars. Unlike Sweden, however, Norway was invaded by Germany
in 1940. As a result, after World War 11 Norwegians saw foreign policy as being either anchored
on the Atlantic connection (free trade and an automatic security guarantee) or based on a much
more insecure and volatile European order. Nordic
cooperation (shared social-democratic principles,
language, and culture) fit weIl with Atlanticism,
and the Nordic states implicitly counted on the security guarantee of the United States and the UK.
Norway entered its first formal alliance by joining
NATO in 1949, causing a deep rift in the Labor
party's left wing. Although NATO ineluded most
European (and later EU) states, the Norwegians
continued their elose relationship with the Americans and the British without developing elose connections with either Germany or the Latin countries.

363

Despite its indifference to European integration, Norway has had to confront the issue
squarelyon five occasions: concerning Marshall
Plan assistance in 1948 and 1949 and possible
ECIEU membership in 1961, 1967, 1972, and
1994 (Pharo, 1988). With respect to EC membership, French president Charles de Gaulle "saved"
Norway in 1963 and 1967 by rejecting British
membership. Given that Norway chose to align itself very elosely with the UK in almost all foreign
policy questions in the postwar period, de Gaulle's
action decided the issue for Oslo (Eriksen, 1977).
Britain's strategy was to counter integration
by erecting a free trade area, supported by Norway, the other Nordic states, Switzerland, and
Austria. Accordingly, the European Free Trade
Association (EFTA) was launched in 1960, but in
1961 Britain nonetheless decided to apply for EC
membership. In Norway the Labor government reluctantly followed suit. However, rnindful of the
split in its ranks on the question of NATO membership, the government deelared that the question
of EC membership would have to be decided by a
referendum.
The bitterly divisive 1972 referendum resulted in a "no" vote of 53.3 percent. Norway became the first country to reject EC membership; its
elose partners, Britain and Denmark, entered the
Community. Although the government and most of
the political elite had advocated membership, there
was resolute resistance from farmers and fishermen, from the left, and from "Christians" and teetotalers-the so-called countercultures located on
the periphery of Norwegian society. The political
battle-largely about Norwegianness and national
identity, the importance of social welfare in a
country with a dispersed population pattern, levels
of agricultural subsidies, and an aversion to any
form of supranationalism-was the fiercest in
modem Norwegian history. Once again, the goveming Labor party split down the rniddle. Not surprisingly, European integration remains an extreme1y emotional issue to this day.
Following the referendum, the political elite
and the Foreign Office had to formulate Norwegian foreign policy within the parameter of seemingly permanent nonmembership of the EC. By
the end of 1972 the only consensus was that the
question of EC membership should be removed as
far as possible from the political agenda. Yet only
twenty years later there was a second referendum
on membership. In the intervening period public

364

NTA

opinion and external conditions had changed, although the latter much more so than the former.
Norway had coordinated its foreign poliey with
EC member states (through European Political
Cooperation) and had aligned itself with the EC
on a range of econornic policy issues.
In response to the puH of the single market
program, Norway was a founding member of the
European Econornic Area (EEA), a vehicle for intensive econornic cooperation as aprelude to fuH
EC membership. The Labor party once again
found itself discussing a possible EC accession; at
its annual meeting in 1992 a small majority of delegates voted to apply for membership. In the two
years that foHowed there was much public debate
on the issue, and a markedly pro-EU political
leadership emerged in the Labor party. However,
the referendum in November 1994 again split the
country, and membership was rejected, this time
by 52.2 percent. The reasons for rejection were remarkably sirnilar to those that prevailed in 1972:
center versus periphery, urban versus rural culture
and values, secularized people versus Christians.
It is striking that major changes in the external environment seem to have had only a negligible impact on Norwegian attitudes toward the EU. Yet it
is worth noting that voting along the yes-no axis in
both the Swedish and Finnish referenda (in 1994)
was sirnilar to that in Norway, the significant difference being that more people live in urban centers in the south of these countries.
In sum, Norway's status as reluctant European was confirmed by the 1994 referendum result. Of course the Nordic states within the EU are
also skeptical about integration, none more so
than Denmark. However, both Sweden and Finland seem to understand that political influence in
Europe is increasingly prernised on participation
in the integration process. As a result, the Nordics

within the EU are parting ways, adopting individual strategies vis-a-vis Brussels. Likewise, traditional Nordie cooperation in multilateral contexts
such as the UN is fast disappearing or has become
an empty sheH. Today Norway struggles to maintain contact points and some influence with an EU
that is oriented primarily toward the east and
south. Once again politicians and policymakers
are publicly voicing their frustration with this state
of affairs, but after the trauma of 1994 there is little probability that the issue of EU membership
will appear on the political agenda for a very long
time.
See also EUROPEAN ECONOMIC AREA; TABLE
6; TABLE 10.

Bibliography

Eriksen, K. E. 1977. "Norge I det vestlige samarbeid."

In T. Bergh, Veskt og velstand. Oslo: Universitetsforlaget.
Lundestad, G. 1985. "Nasjonalisme and intemasjonalisme i norsk utenrikspolitikk: Et faglig-provoserende
essay." Internasjonal Politikk 1, pp. 39-54.
Matiary, J. H. 1993. "And Never the Twain Shall Meet:
Refleetions on Norway, Europe, and Integration." In
1. Damgaard Pedersen, ed., The Nordic Countries
and the EU. Copenhagen: CORE.
Mj13set, L. 1996. Norge og EU. ARENA Working Paper,
no. 16. Oslo: University of Os10, ARENA.
Pharo, H. 1988. "Norge, EF og europeisk samarbeid."
Intemasjonal Politikk, no. 6.
Riste, O. 1985. "The Historical Determinants of Norwegian Foreign Poliey." In J. J. Holst, ed., Norwegian
Foreign Policy in the 1980s. Oslo: Universitetsforlaget.

-Janne Haaland Matlary

NTA
See

NEW TRANSATLANTIC AGENDA.

o
OCTs
See VERSEAS COUNTRIES AND TERRITORIES.

OECD
See

ORGANIZATION FOR ECONOMIC COOPERATION

AND DEVELOPMENT.

tracts); and the Annex (debates of the European

Parliament).

Ombudsman
Under the terms of the Treaty on European Union
(Article 138e), the European Parliament (EP) may
appoint an ombudsman for the duration of its parliamentary term. The ombudsman receives complaints about maladministration from EU citizens
and from -businesses or associations based in the
EU, either directly or through a member ofthe EP.
The ombudsman then conducts an enquiry, tries to
resolve the problem, and failing that, sends a recommendation for further action to the EP. Following a protracted dispute between political groups
in the EP, Jacob Soederman was elected the first
ombudsman on July 12, 1995, and sworn in by the
European Court of Justice on September 27, 1995.
Soederman received nearly three hundred complaints during his first three months in office.
See also EUROPEAN PARLIAMENT.

OEEC

113 Commlttee

See

Article 113 of the Treaty of Rome authorizes the

Commission to conduct the EU's international trade
negotiations, but the Council approves the Commission's negotiating mandate and must endorse the final agreement, officially by qualified majority vote
but unofficially by unanimity. In addition to endorsing the final agreement, member states exert considerable influence over the Commission's conduct of
international trade negotiations themselves. The socalled 113 Committee (named after Article 113) of
member state civil servants meets regularly with
Commission officials to approve the Commission's
negotiating strategy and proposals. During the
GATT Uruguay Round negotiations, for instance,
the 113 Committee met Commission officials
weekly in Brussels and sent observers along to the
negotiating sessions in Geneva. Although 113 Committee members could not participate in the negotiations thernselves, their presence at the sessions ensured that the Commission negotiators stuck to the
agreed-upon Council position. Commission negotiators often tumed such oversight to the EC's advantage by pointing out to other GATT negotiators
the impossibility of accepting a proposal without
first getting member states' approval.
See also COMMON COMMERCIAL POLICY; GEN-

ORGANIZATION FOR EUROPEAN ECONOMIC Co-

OPERATION.

Office for Offlda. Publlcatlons

of the European Communltles
The Office for Official Publications of the European Communities annually publishes nearly two
million pages of official EU documentation in
eleven languages. Located in Luxembourg, the
best-known product of the office is the Official
Journal olthe European Communities. In an effort
to reduce costs and increase public accessibility,
the office is publishing a number of CD-ROMs
and increasingly uses the Internet.

OffIcial Journal of the European

Communltles (OJ)
One of the most important publications of the EU,
the Official Journal 01 the European Communities
(01) is published by the Office for Official Publications of the European Communities, in Luxembourg. The 01 is published in four parts: the L series (EU legislation), the C series (draft legislation
and other communications), the S series (supplemental information-notices and public con-

ERAL AGREEMENT ON TARIFFS AND TRAnE.

365

366

ONP

ONP
See OPEN NETWORK PROVISIONS.

Openness
See 'fRANSPARENCY.

Open Network Provisions (ONP)

The Commission's white paper on the single market program (1985) inc1uded a directive on open
network provisions (ONP) in the telecommunications area to ensure open access to the public
telecommunications infrastructure for equipment
and services providers. The directive prohibits
public telecommunications networks from restricting access except on grounds of security, data
protection, or the need to preserve interoperability.
It also provides for a gradual development of mutual recognition of authorizations for services
providers. The ONP directive was an early step on
the road to the fullliberalization of telecommunications, achieved on January 1, 1998.
See also TELECOMMUNICATIONS POLICY.

Oplnlon
The Council of Ministers or the Commission may
issue non-Iegally binding opinions and recommendations to try to influence the actions of member states.

Opposition Movements
EU opposition movements are mobilizations with
a significant animus against the project of European integration in its current format. They are to
be distinguished on the one hand from the state of
public opinion on the EU, as measured, for example, by the Commission's own Eurobarometer surveys, and on the other from interest group politics
at the EU level, even if such actors use actions associated with the repertoire of protest movements.
Hence, farmers' protests against Common Agricultural Policy (CAP) price deals are so routine
and endemic to the policy dynamics of a particular
sector that they cannot be inc1uded as opposition
movements.
Opposition movements are worthy of attention broadly speaking because they suggest political parameters of transnational governance for liberal democracies. They also indicate the particular

functioning ofthe EU, signaling a break in the environment of permissive consensus that government and partyelites enjoyed in conducting European policy, at least until the accession of Britain
and Denmark in 1973. The increasing bite of EC
decisionmaking and constitutional implications
associated especially with the two major reforms
of the treaty framework, the Single European Act
(SEA) in 1986 and the Treaty on European Union
(TEU) in 1992, reinvigorated anti-European integration protest movements.
Fragmentation of political communication
emanating from Brusse1s along with the preexisting density of national frameworks means that EU
opposition movements express themselves predominantly in the national idiom. Moreover, they
are on1y rarely organizationaHy independent of
other politica1 formations. They are most1y submerged in political parties that espouse a broader
agenda of opposition to prevailing policies and institutions at aH levels. But subnational territorial
identity plays a major role in redirecting opposition from "Brussels" to the national capitals or to
other regions.
EC opposition movements were restricted to
Britain and Denmark until the 1980s, when the rise
of a new issue agenda associated with the "new"
social movements mounted a kind of fronde
against integration. The peace, ecology, and
women's movements are particularly germane to
this account. Their candidates failed to win representation in the first directly elected European Parliament (EP) but were successfu1 five years later in
1984, when they formed the Green Alternative
Link group, composed of Greens (from Germany
and later from France), regionalists (from Flanders, Italy, and the Basque land), and the deputies
of the Danish People's Movement Against the European Community. SEA referenda in Denmark
and Ireland in 1986 and 1987, the 1989 EP election, and the Maastricht referenda three years later
as weH as accession referenda in 1994 in Sweden,
Finland, and Austria and EP elections in 1994 and
(for the new entrants) in 1995 provided convenient
opportunities to rally opposition.
The TEU offered a potent source of mass mobilization for another new element of Europe's political spectrum: the right. Anti-EU polemics became astapIe of populist right-wing formations
such as the Front National (France), Republikaner
(Germany), Vlaams Blok (Flanders), and the Freiheit Partei sterreich (FP, Austria). Moreover,

Opposition Movements
nonparty anti-Maastricht electoral lists were created to contest the European Parliamentary e1ections in lune 1994 (seven months after the TEU
entered into force) in France (Liste pour l' autre
Europe led by Gaullist Bernard de Villiers, which
included British subject Sir lames Goldsrnith) and
Germany (Initiativ fr Europa-gegen Maastricht,
led by EU commissioner Martin Bangemann's
sacked chef de cabinet, national-liberal Manfred
Brunner).
Lending coherence to anti-EU formations are
three issue clusters. Right-wing mobilizations in
the countries just mentioned thrive primarilyon
the constructed native/foreign binary opposition.
Underlying this symbolism is a defensive position
in the face of econornic "rationalization" that has
left in its wake high rates of unemployment. UnskilIed unemployed males are the most likely
groups to support this type of opposition.
A second set of issues, which can be termed
states rights, is primarily localized in Britain and
Denmark. Euroskepticism in the UK has significant support in both the Labour and Conservative
parties and is rooted in a perceived threat to the independence, prerogatives, and prestige of the
state. Similarly, Danish opposition focuses primarilyon the perceived erosion of the Danish way
of life as a consequence of integration beyond realization ofthe common market. In contrast to virtually allother EU member states, British opposition encompasses large parts of the mainstream
political class in addition to some elements that
might otherwise have been available to a rightwing opposition. Ire1and offers a variation on this
theme. Irish neutrality forced a popular referendum over the SEA in 1987. Despite that, anti-EU
opposition has been fairly marginal. Two factors
help explain this pattern: fust, the relative independence from Britain promised by deeper EU
links; second, the massive econornic benefits that
can be attributed to EU membership. Residual opposition comes in the form of fears that EU law
may undermine the moral authority of the
Catholic Church.
A third group of British opponents, also present to a limited degree in Ireland, brings us
around to our third issue cluster: the "new" issues
identified earlier in this entry, especially those attached to environmental concerns. In the 1989 EP
election, the British Greens won nearly 15 percent
of the vote, but it is not clear how deeply opposition to the EC affected their support. The .best ex-

367

ample of Green opposition is Germany, where until about 1991, the party most closely reflecting
Germany's broad and deep social movement sector offered a fundamentalist critique of the EC on
the basis of its perceived antiecological and antisocial (i.e., market) design, the remoteness of the
Brussels institutions from Europe's citizens, and
the threat to peace the EC ostensibly projected. In
contrast to those mobilized by native/foreign or
states-rights icons, the Greens primarily draw
strength from the highly educated professional
strata.
Behind all of these tendencies is the failing
integrative capacity of mainstream centrist parties
of both left and right. The inability of the EC to
adjust quickly to the issues associated with the
new social movements of the 1980s produced the
Greens. The Front National and similar formations speak to the "losers" in econornic "modernization," which is correctly associated with Europe an integration. Both processes produced
openings in the competitive party systems of
Britain, Germany, Austria, the Bene1ux countries,
France, and Italy. The narrowing scope for effective national econornic policies is a leading cause
of social democratic decline. In any country with a
narrow postindustrial base, the decline of social
democracy is associated with disproportionate
right-wing success.
But the situation is more complicated than
that. To the re1atively simple left-right hemorrhaging just described, a further mediation must be
added: regional identities. Especially under the impact of competitive pressures from the single market and the fiscal austerity programmed by Econornic and Monetary Union (EMU), regions in
some member states won the freedom to compete
for private investment, structural funds, European
Investment Bank loans, and the clout to resist
transferring own resources to the national government. This new situation loosened central state
control over regional govemments in Flanders and
Catalonia, to take but two examples. Beginning
from a Euroskeptical position, Scottish nationalism has reoriented itself, now assigning a positive
valence to the EU. The Scottish position can only
fuel "states rights" Euroskepticism in the UK.
Meanwhile, in what may be the most dramatic case
in the run-up to EMU, Umberto Bossi's Padania
movement in Northern Italy irnplies the disintegration of the Italian state, aimed at northern participation and southern exclusion from EMU.

368

Opposition Movements

Beyond the factor of regional identities, the

low stability of anti-EU opposition movements is
related in other jurisdictions to the eventual responsiveness of Brussels to the new agenda as
weIl as the changing geopolitical situation in Europe. Both factors impacted Germany, producing a
fundamentally changed attitude toward the EU by
the elose of 1993. German unification motivated
the Greens to embed Germany in multilateral institutions; the EU's increasing environmental profile split the nongovernmental organization
(NGO) community and encouraged the party to
pursue a more pragmatic policy. Meanwhile, in
domestic political terms, the Greens wished to differentiate themselves from the populist right (i.e.,
Brunner's anti-Maastricht campaign) and the
communist successor party.
As the member state with the longest record
of uninterrupted mobilization against the EU,
Denmark stands out as an anomalyand requires
additional comment. The Danish People's Movement Against the European Community and the
anti-TEU June 2 Movement comprise a unique
extraparliamentary phenomenon. Thematically,
the movement is a hybrid of social movement and
states rights concerns. Organizationally independent of the parties, prominent members of the Social Democrats, the Socialist People's Party, the
Radicals, and the tiny Communist Party are associated with the movement. The TEU divided the
movement between those advocating dissolution
of formal ties to the EU and those embracing
those ties but willing to go no further, a differentiated position that pushed the nays over the 50
percent barrier in the 1992 referendum and forced
the government to negotiate aseries of Danish opt
outs to EMU, the Common Foreign and Security
Policy, and EU citizenship. These positions are
consistent with the movements' recruitment pattern: a broad coalition of (especially unskilled)
workers' organizations and new social movements and disproportionate female participation,
reflecting Denmark's large state service sec tor
(both in terms of jobs and provider of services).
In short, in political terms, the Danish phenomenon represents a combination of strong social
democracy and strong social movements (pos tindustrials). Nevertheless, the organizational split
in the movement that arose during the TEU ratification campaign, which is reflected in the two
main groupings, the People's Movement and the
June 2 Movement, corresponds to the crystalliza-

tion of the postindustrials as an independent

force, resembling Green activists in Germany. A
dilemma for the People's Movement consists in
resisting populist appeals associated with rightwing parties in Europe. So far, residual social democratic strength and Nordic transnational cooperation, pro vi ding an international shoring up of
social democratic traditions, have prevented such
a development.
The anti-integration movement in Denmark is
perhaps best interpreted as the legacy of the special circumstances under which politics and policy
collided in the 1970s. In all four referenda years1972 (accession), 1986 (SEA), and 1992 and 1993
(both on the TEU)-parties controlling over 85
percent of the seats in the Folketing (parliament)
were in favor of further steps toward integration.
But because each step implied a change in Denmark's constitution, an even higher percentage
vote in the Folketing was required in order to
avoid a binding referendum. As largest party, the
Social Democrats were the key. They have always
been split on integration, compelling governments
of different hues to take their case to the people in
Denmark's consensus-based political culture.
If the EU increases its Green profile, the balance of opposition in the coming years should
shift decisively to the populist right. Opinion studies show that high levels of support for integration
are strongly associated with length of time as an
EU member. If this relationship continues to hold,
one should expect convergence of the Swedish opposition on the German pattern, which it resembles more than it does the Danish situation.
It seems elear that anti-EU opposition movements compelled responses both within the Brussels institutions as well as in the administrative
and constitutional setups of the member states. EC
institutions reacted by taking up themes of particular interest to the movements. A significant case
in point is environmental policy, where both the
Comrnission and Parliament have been especially
active. The activism of the Commission under
President Jacques Delors points in the same direction. Environmental NGOs, a primary element of
the environmental movement, have modulated
their opposition activism in favor of semiregular
consultations with the Commission and EP, a
practice already foreshadowed by NGO access to
national adrninistrations. TEU ratification had direct effects for constitutional reform for eloser involvement of national parliaments in EU policy-

Organization for Economic Cooperation and Development (OECD)

making and has led to intense discussions on

broadening national parliamentary participation.
Regarding recent theoretical developments involving European integration more specifically, the
patterns of opposition adumbrated here suggest
some indirect support for the emergence of a polity
with features of multilevel governance. As already
indicated, an important theme in EU opposition is
the changing valence assigned to the EU by region:
from negative to positive in the case of Scotland
and from indifferent to positive in such cases as
Catalonia, Flanders, and Northern Italy.
See also DEMOCRATIC DEFIcrr; DENMARK; LEGITIMACY.

Bibliography
Cafruny, Alan, and Carl Lankowski, eds. 1997. Europe's
Ambiguous Unity: Conflict and Consensus in PostMaastricht Europe. Boulder: Lynne Rienner.
Dalton, Russell. 1995. The Green Rainbow: Environmental Groups in Western Europe. New Haven: Yale
University Press.
Judge, David, and David Earnshaw. 1994. "Weak European Parliament Influence? A Study of the Environment Committee of the European Parliament." Government and Opposition 29, no. 2 (Spring), pp.
262-276.
Ross, George. 1995. Jacques Delors and European Integration. New York: Oxford University Press.

-earl Lankowski

Opt Out
An opt out is an exemption from a treaty provision
or from a treaty amendment. Britain's opt out
from the social chapter of the Treaty on European
Union, between 1993 and 1997, is a striking example.
See also DIFFERENTIATED INTEGRATION.

Organlzatlon tor Economlc

Cooperatlon and Development
(OECD)
The Organization for Economic Cooperation and
Development (OECD) is an international organization for the promotion of economic cooperation
among industrialized countries; it is based in
Paris, where its founding act, the Convention on
the Organization for Economic Cooperation and
Development, was signed in 1960. The OECD
emerged in 1961 from the transformation of a previous organization, the Organization for European

369

Economic Cooperation (OEEC), into a permanent

body of equal partners. After World War H, the
OEEC had been entrusted with the administration
of the Marshali Plan in order to foster European
economic recovery. The Uni ted States and
Canada, together with the former Marshali aid recipients (Austria, Belgium, Denmark, France,
Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain,
Sweden, Switzerland, Turkey, and the UK) became the OECD's twenty founding members. The
former Yugoslavia had a special associate status
that ended in 1992.
The OECD now has twenty-nine members:
Japan, Finland, Australia, and New Zealandjoined
in the years between 1964 and 1973; a new wave
of accessions started in 1994 with Mexico and
continued with the Czech Republic (1995) and
with Hungary, Poland, and Korea (1996). A number of other Central and Eastern European states
are prospective members. Even Russia proposed
joining at a meeting of OECD ministers in 1996.
The official languages of the OECD are English
and French.
The EC played an active part in the OECD's
conception and birth. At the adoption of the OECD
convention, a special protocol was signed governing OECD-EC relations. The protocol states that
the EC's representation in the OECD "shall be determined in accordance with the institutional provisions" of both organizations' founding treaties
and that the Comrnission or High Authority "shall
take part in the work" of the OECD. Thus the EC
(now the EU) is not a full member of the OECD
(membership being reserved to national governments), but its status outranks that of a simple observer and can best be described as an "active participant." Legally, the EU does not contribute to the
OECD budget and does not participate in formal
decisionmaking. In practice, however, the EU
makes substantial ad hoc financial contributions to
support particular initiatives and programs. Moreover, its intervention, mediation, and support can
be decisive for the adoption of a particular decision. In this entry, phrases such as "member countries" therefore ought to be understood as inc1uding the EU, unless otherwise specified.
The relationship within the OECD between
the EU and its member states is of a particular
kind, with the Commission coordinating a common position among the member states. Nevertheless, given the think-tank character of the OECD,

370

Organization for Economic Cooperation and Development (OECD)

the member states and the COIumission contribute

to the OECD's analysis and dialogue in a very
open spirit.
Based on its objectives-to promote economic growth, assist developing countries, and
contribute to the expansion of world trade-the
OECD's work covers a vast range of policy fields,
ranging from data collection (the monthly OECD
Main Economic Indicators are respected references worldwide) to the environment, from public
management to agriculture, and from science and
technology to international investment. To achieve
the OECD's objectives, govemments undertake to
exchange information, hold continuous consultations, participate in studies and projects, and collaborate c1osely.
The OECD's institutional structure is topped
by the secretary-general, who is also the chairman
of the OECD Council, the organization's policymaking body. The council, consisting of the ambassadors of the member countries plus the head
of the Commission delegation to the OECD,
meets weekly. It also meets at the ministerial level
once a year, usually in May, shortly before the annual G7 summit. The OECD's day-by-day work is
carried on in a number of specialized committees
by the representatives of the member states, supported by a permanent staff of highly qualified researchers and policy analysts.
The OECD Council mayadopt legally binding decisions, or may issue nonbinding recommendations and resolutions. The annual ministerial
meeting ends with the release of a communique
that expresses the common views of the organization's members on the most important economic
and trade policy issues of the moment and outlines
the organization's direction for the following year.
All decisions are taken by consensus, a common feature of intergovernmental organizations.
A distinctive characteristic of the OECD, however, is the degree of peer pressure exerted on recalcitrant members to modify their position. Such
is the case with the OECD's core activities: the
surveillance of macroeconomic policies carried
out through the semiannual Economic Outlook
for the membership as a whole and the annual
Economic Survey of each member country. The
work of the Development Assistance Committee
provides another example: here members periodically review both the amount and the nature of
their contributions to aid programs and consult
about their assistance policies and practices. But

peer pressure can be exerted also in a specific

policy field, as in the case of the "crusade"
against the tax deductibility of bribes to foreign
public officials.
During its nearly forty-year existence, the
highlights of the OECD work pro gram have
changed completely, reflecting major economic
changes in its members' economies and in the
global political economy. In the 1960s, a decade
characterized by strong economic growth in all
member countries, the OECD emphasized monetary and fiscal measures to stabilize total demand.
In the 1970s, when the breakdown of the Bretton
Woods system and the on set of the oil crises
caused deep recession and high inflation, the
OECD was forced to react. In 1974, a number of
members set up the International Energy Agency,
which sought to stabilize the oil market and develop an emergency energy pro gram. In the
1980s, the OECD was increasingly concerned
with reducing member countries' high unemployment rates, coordinating economic policies and
forecasts, and analyzing economic development.
In the first half of the 1990s, three issues predominated: the fight against unemployment, assistance to economies in transition to the free market,
and the "new trade agenda." First, answering a call
from the G7 group of major industrialized countries, the OECD developed a comparative analysis
on the causes of unemployment, which remains
persistently high even in growing economies.
Known as the Job Study, the report also included
recommendations for joint OECD and separate
country-by-country action. Second, after the collapse of the Soviet bloc, most Central and Eastern
European countries and many of the republics of
the former Soviet Union established working relations with the OECD in a quest for broad-ranging
policy advice as well as technical assistance in
specialized fields. The OECD's experience of reconstructing its own economies after World War 11
is now used to facilitate the transition of those
countries to market economies. Third, in a globalized economy, many policies formerly considered
of purely domestic nature present more and more
links with various aspects of trade policy. The list
inc1udes the environment, competition, labor, and
investment. On all of these trade-related subjects,
the OECD has broken new ground with studies,
seminars, and analysis, which may form the basis
for future negotiations in the World Trade Organization (WTO) or in other forums. Indeed, the

Organization for furopean fconomic Cooperation (OffC)

OECD has often played the role of an international "catalyst and pathfinder," as the OECD's
1996 ministerial communique put it. One of its
best success stories is the extraordinary preparatory work made before the beginning of the
Uruguay Round in the area of trade in services.
No review of OECD activities would be complete without mention of something that does not
appear in the convention but certainly contributes
to the OECD's appeal to national governments
and its unique role among international organizations. Thanks to strong support from the OECD
secretariat and to the collegiality and flexibility of
the OECD's procedures, on several occasions govemments-be they OECD members or not-have
found in the organization a preferred forum in
which to address sectoral trade issues involving
the interests of a limited number of countries.
Subsequent negotiations have on occasions led to
the completion of legally binding international
agreements, including some form of enforcement
mechanism. These agreements are sometimes
called "hard law," as opposed to the "soft law" of
most traditional OECD activities.
For example, an international arrangement
was concluded "under the aegis" of the OECD
with guidelines aimed at curbing the trade-distorting effects of govemment-provided export credits.
Shipbuilding is another example of an area in
which an agreement was negotiated to curb subsidies. Negotiations with a similar objective in the
steel seetor are still under way. It is worth noting
that in all these cases the EU's member states have
negotiated as a single entity, represented by the
Commission.
More recently, the OECD was chosen to
launch the negotiations for the establishment of a
Multilateral Agreement on Investment to liberalize and protect foreign direct investment. The
mandate for the negotiations specifies that interested non-OECD countries will be regularly informed and given the opportunity to make their
views known and that the final agreement will be
open for accession to OECD and non-OECD
countries alike. In the presence of shared powers,
as in this case, both the EU's member states and
the Commission (authorized by the Council to negotiate in areas falling within the EU's competence) participate in the negotiations.
Is the OECD still relevant? That question has
haunted the organization in the post-Cold War era.
Until the late 1980s its detractors dubbed the

371

OECD the "rich men's club," to stress the developing world's exclusion from its weIl-to-do membership (the OECD's more charitable critics spoke of
"cooperation among like-minded countries").
Later, serious doubts were cast on the OECD's
continued raison-d'etre as an intergovernmental
talking shop in the new era of "small govemment."
Yet in the post-Cold War period it seems reasonable to conclude that the OECD has shown
more vitality than most bodies of the international
family. The OECD remains one of the best
sources for economic knowledge and assessment,
and its multidisciplinary abilities have borne fruit
in opening new ways to consider old as weIl as
new problems. It has developed an "outreach" policy, establishing itself as a valuable interlocutor
for countries in transition. It has extended its more
visionary reflections to include Asian and Latin
American countries in seminars focused on common concerns for the future. Above all, the OECD
retains the unique character of an economic institution in which govemments can exchange views
in a nonconfrontational, non partisan way. The
need for such avenue has certainly not diminished
over the years; indeed, it seems bound to increase
at a time of even greater global interdependence.
See also ORGANIZATION FOR EUROPEAN EcoNOMIC COOPERATION.

-Maria-Francesca Spatolisano

Organlzatlon for European

Economlc Cooperatlon (OEEC)
The Organization for European Economic Cooperation (OEEC) was established in 1948 to channel Marshall Plan assistance from the United
States to the countries of Western Europe. As a
condition of sending massive assistance, the
United States insisted on a joint European response in order to encourage a prototypical organization for European integration. To meet the
U.S. prerequisite, the recipient countries established the OEEC, an organization too large and diverse to act as an institutional instrument of integration. Its eighteen members varied greatly in
size, population, and economic well-being. Perhaps more important, widely differing political
cultures and wartime experiences made the
prospect for agreement on integration extremely
remote. Thus the OEEC failed to live up to U.S.
expectations. Instead, shortly after the EEC began

372

Organization for Security and Cooperation in Europe (OSCE)

functioning in 1958, the OEEC tumed into the Organization for Economic Cooperation and Development (OECD), the Paris-based body for international economic research and analysis.
See also MARSHALL PLAN; ORGANIZATION FOR
EcONOMIC COOPERATION AND DEVELOPMENT; ORIGINS OF EUROPEAN INTEGRATION.

Organlzatlon for Securlty and

Cooperatlon In Europe (OSCE)
After the end of the Cold War, the Conference on
Security and Cooperation in Europe (CSCE) was
renamed the Organization for Security and Cooperation in Europe (OSCE). The original CSCE
grew out of a Soviet proposal, in the mid-1950s, to
convene a conference of European countries to
discuss security and economic cooperation with
the West. The idea, revived periodically by the Soviet Union, languished largely because the Soviets
refused to allow Western Europe's North American allies to participate in the proposed conference. Only when the Soviets lifted their objection
did a conference begin in the early 1970s. Its result was that in Helsinki, in August 1975, the
heads of state and government of the thirty-five
participating countries (all European countries except Albania plus the United States and Canada)
signed the Final Act of the Conference on Security
and Cooperation in Europe. The so-called
Helsinki Final Act was not an international treaty
but a statement of political intent and commitment
to bring about peaceful change, to minimize the
dangers of misca1culation, and to manage crises
and controversies in East-West relations. In three
"baskets," or categories of commitments, the accord covered political, economic, cultural, humanitarian, information, and military confidencebuilding issues.
Through the foreign policy coordinating
mechanism of European Political Cooperation, the
EC member states played a prominent part in the
negotiations leading to the CSCE's Final Act, in numerous follow-up meetings (Belgrade, 1977-1978;
Madrid, 1980-1983; Vienna, 1986-1989; and
Helsinki, 1992), and in occasional special meetings
and conferences. During the renewal of Cold War
tensions in the late 1970s and early 1980s, the
CSCE proved invaluable in at least keeping the protagonists at the negotiating table. Moreover, although the CSCE had resulted from a Soviet initiative, it soon rebounded on the USSR because of the

emphasis in "Basket 3" on human rights. Citing

Basket 3, Western countries and dissident groups in
the Soviet bloc pressured the Soviet Union and its
allies to curb human rights abuses and set international standards of behavior. Their pressure contributed imperceptibly but enormously to the revolution in Central and Eastern Europe in 1989.
Because the CSCE was a creature of the Cold
War, there was much speculation in the late 1980s
about its ability to survive in the post-Cold War
world. The United States had never liked the
CSCE, but the European participants saw its potential for peacemaking in a new international system likely to be dominated by nationalist struggles
in the former Soviet bloc. In a famous speech in
Berlin in December 1989, U.S. secretary of state
James Baker identified the CSCE as a pillar of the
New Europe. That set the tone for negotiations
culminating in the Charter of Paris for a New Europe, signed in November 1990. The charter
marked a political and organizational watershed
for the CSCE: politically, the CSCE was guaranteed a prominent role in the security architecture
of post-Cold War Europe; organizationally, by acquiring institutions of its own, the newly renamed
OSCE began to focus its attention on monitoring
implementation of domestic and international
standards of conduct, rather than merely setting
such standards.
The disintegration of Yugoslavia and the Soviet Union caused a huge increase in OSCE membership as the newly independent republics applied to join. From a membership of thirty-five in
1990, the OS CE had swollen to fifty-five by 1997.
But the disintegration ofYugoslavia and the Soviet
Union also tested the OSCE's capacity to resolve
conflict and mediate disputes. The EU works
closely with the OS CE to promote stability in Europe. For instance, the EU asked the OSCE to
oversee implementation of the European Stability
Pact (Balladur Plan); cooperated closely with the
OSCE to execute the nonmilitary aspects of the
Dayton Peace Accords in Bosnia; and urged Russia to allow the OSCE a role in monitoring and resolving the secessionist war in Chechnya.
See also A PEACE AND SECURITY SYSTEM FOR
POST-COLD WAR EUROPE: PREVENTING FUTURE
"YUGOSLAVIAS"; APPENDIX

3.

Organlzed European Space

See EUROPEAN MODEL OF SOCIETY.

Origins of European Integration (Post-World War 11)

Orlglns of European
Integration (Post-World War 11)
One of the most striking historical characteristics
of Europe has been its extreme political fragmentation. Throughout the centuries, numerous intellectuals have dreamed of bringing order and unity
to this confused mosaic, and many political leaders have sought to achieve such unity through conquest. However, the story of European integration,
as it is understood today, essentially begins only in
1945.
World War 11 was itself a catalyst for a renewed interest in European unity. It led to the
claim that nationalism and nationalist rivalries, by
ending in war, had discredited the independent
state as the cornerstone of political organization.
The war also bolstered the argument that future
peace and stability could best be assured through a
comprehensive continental community. However,
the new postwar administrations seemed at first to
give European unity a low priority, choosing instead to focus on the many problems of national
economic reconstruction. Coordination of national
economic plans might still have occurred, through
various bodies established during the war by the
Allies and intended to plan for postwar reconstruction in German-occupied territories; these
agencies were mainly concerned with energy and
transport resources. In 1947 their obligations and
duties were taken over by the Economic Comrnission for Europe (ECE), a newly established body
of the UNo The changed political and economic
context of Europe after 1945-notably a marked
deterioration in East-West relations--destroyed
the basic assumption of the ECE that Europe's
economic problems would be treated on a continent-wide basis. For various reasons, however,
that changed context equally led to unity's surviving as an item on the political agenda within Western Europe.
The effective division of Europe in the late
1940s generated alarm in Western Europe and
concern about the territorial ambitions of the Soviet Union, ultimately leading to a deep involvement of the United States in Western European affairs. The consequent Cold War-the ideological,
political, and diplomatic conflict between the
United States and the Soviet Union and between
Western and Eastern Europe that was to endure
until 1991-was a powerful pressure that propelled Western Europe toward defining itself as an
entity with common interests. Equally important

373

was the parlous state of the national economies

and a growing feeling that economic recovery
could only come about through collaboration between states on development and trade, coupled
with external assistance from the United States.
The initial moves by governments were limited in scope, with the wartime decision by Belgium, the Nethedands, and Luxembourg to establish a customs union an exception. Benelux came
into being in January 1948, and the three members
also began to present a common front in international economic and trade discussions. More generally, however, governments were typically more
interested in security arrangements and did little
more than consider mutual aid treaties of the traditional variety. The only formal agreements to
emerge were the 1947 Treaty of Dunkirk between
Britain and France and its March 1948 extension
in the fifty-year Treaty of Brussels (formally the
Treaty of Economic, Social, and Cultural Collaboration and Collective Self-Defense), which was
signed also by the Benelux countries and which,
after 1954, was to serve as the basis ofthe Western
European Union (WEU). Even though the two
treaties listed economic and cultural cooperation
as objectives, they were essentially mutual security pacts with promises of reciprocal aid should
any one signatory be attacked. Although, in the
words of the Brussels treaty, they offered protection against "a renewal by Germany of an aggressive policy," many believed the pacts had an eye
also on possible future Soviet actions.
By 1948 the Cold War was in full swing, confmned by the Soviet imposition of a treaty upon
Finland, the Communist takeover of Czechoslovakia, and the Berlin Blockade. The final marriage
between Western Europe and the United States,
which alone could provide the desired military security, came with the formation ofNATO in 1949.
NATO was the conclusion of a program of U.S.
support first outlined in the Truman Doctrine of
March 1947, which pledged U.S. backing for
"free peoples who are resisting subjugation." It
provided a protective shield beneath which Western Europe was free to consider its political and
economic options without necessarily having to
devote time and scarce resources to military defense. At the same time the United States, itself a
federation, saw nothing inherently flawed in
closer integration within Western Europe and, also
for its own strategic interests, lent its weight after
1947 to proposals for more intensive integration.

374

Origins of European Integration (Post-World War 11)

Against this backdrop, the idea of a federal

Europe began to receive endorsement from a significant number of senior politicians from several
countries. The issue became not whether there
should be integration but what form it should take.
Governments and political parties took their stand
on whether this should be only intergovernmental
cooperation or something deeper that would embrace an element of supranationality. The various
groups pushing for intense integration were
brought together in December 1947 in the umbrella International Committee of the Movements
for European Unity. The first and most important
outcome of its efforts was the Congress of Europe,
held in The Hague in May 1948. With over 750
delegates from sixteen countries (including a
group from Germany) as weIl as observers from
the United States and Canada, the Congress was
too unwie1dy to achieve any practical success, not
least because it did not speak for or represent governments, despite the presence of many leading
politicians. Neverthe1ess, in calling for a European
union or federation with its own institutions, a
charter of human rights linked to a European
court, a common market and monetary union, the
Congress helped place integration more firmly on
the agenda and stimulated a process of discussion
and debate that culminated in May 1949 in the establishment by ten states of the Council of Europe.
The Council was the first postwar political
organization in Western Europe. Its structure, consisting of a Committee of Ministers and a consultative Assembly, was a compromise between those
countries that had wanted it to be an agency of integration and those, especially Britain, that refused to concede sovereignty and were prepared to
accept only voluntary intergovernmental collaboration. Established by the Treaty of Westrninster,
with permanent offices in Strasbourg provided by
France and with English and French as its official
languages, the Council had little authority over its
members. Its structure and operation were a victory for those who wished only cooperation, not
integration; decisions would require the consent of
all its members, and in any case it could not enforce its views on reluctant member states. Yet the
Council marked a further postwar watershed: it
rang down the curtain over the willingness of ardent integrationists to dilute their dreams in order
to accommodate reluctant states such as Britain.
These political developments were paralle1ed
by activity on the economic front through the intro-

duction of the European Recovery Program, or

Marshali Plan. The offer by the United States of
economic aid, which because of the dawning Cold
War was effectively restricted to Western Europe,
was contingent upon collective administration of
the relief program, in order to maxirnize its benefits
across all the participants. The United States further
insisted that European participants in the program
must themselves decide how the resources were to
be distributed across the countries involved. These
were the basic tasks of the Organization for European Economic Cooperation (OEEC), established
in April 1948. The OEEC was primarily concerned
with macroeconomic coordination. Thus, like the
Council of Europe, it was intergovernmental in nature and only able to operate with the consent of all
its members, although it too had to have some permanent institutions to enable it to perform its allotted functions satisfactorily.
Although limited in scope and relying very
much upon the principle of voluntary cooperation,
both the OEEC and the Council of Europe were
products of a greater realization in Western Europe of the interdependency of states: that these
states, especially against the backdrop of the Cold
War, could and probably would prosper or fail together. Both bodies also provided useful training
and experience to governments in international
collaboration. However, both organizations, in
terms of integration and of lirniting national sovereignty, operated within the broad yet restricting
denominator of intergovernmental cooperation
(the lowest common denominator), a situation that
could not satisfy those who believed in the imperative of union.
If union or a European federation were to become a practical objective, a different path had to
be sought, and it had to be accepted that several
Western European states would decline to walk
down the path, whatever it may be. The radical
redirection of effort was provided by the French
foreign minister, Robert Schuman, who in May
1950 cut through the tangle in the Western European debate to propose a pooling of coal and steel
resources, specifically between France and the
newly established Federal Republic of Germany.
The scheme was the brainchild of Jean Monnet, the
distinguished French economist and diplomat.
Long a supporter of European integration, Monnet
had become convinced by his experience after 1945
of heading the French planning commission that no
single European country could effectively plan for

OSCE 375
growth and prosperity by itself. Monnet's integrationist alternative saw an eventual union being built
upon an accumulation of intense collaborative ventures in specific economic sectors. Coal and steel
were the logical choice with wbich to start such a
program of sectoral integration, since they were regarded as the foundation of the economy.
Monnet's scheme proved attractive to France
because it offered an answer to one of its overriding postwar concerns: how to control Germany.
The formation in 1949 of the Federal Republic of
Germany had ended the military option of occupation, but the International Ruhr Authority (!RA),
set up in April 1949 to supervise coal and steel
production in the Ruhr region, had failed to satisfy
anyone (including the French, who had originally
championed the IRA as a means of preventing
Germany's full economic recovery). With the IRA
ineffectual and on the point of being abandoned,
Monnet's ideas offered a better way of binding the
new West Germany to external influence wbile it
was still relatively weak. Schuman's proposal was
equally attractive to the West German chancellor,
Konrad Adenauer, who saw it as a key element of
bis policy of tying the Federal Republic firmly to
Western Europe economically, politically, and
militarily wbile seeking to rehabilitate bis country
in Western eyes by reassuring his neighbors that
West Germany had at last abandoned the aggressive nationalist stance of the past.
The Schuman Plan was therefore not just
about coal and steel. It clearly stated that this
would be part of establisbing "common bases for
economic development as a first step in the federation of Europe." Equally, although all Western
European states were invited to participate in discussions on the plan, the Franco-German axis
would be central: in response to a question on
how many participating countries he thought
would be necessary to make the proposed structure viable, Schuman simply stated, "if necessary,
we shall go ahead with only two." The Schuman
Plan was the blueprint of the European Coal and
Steel Community (ECSC), which was formally
established in April 1951 with a membership of
six countries (France, Germany, Italy, and the
Benelux countries), thus becoming Western Europe's first organization that involved the yielding
by its member states of some sovereignty to a
supranational authority. Hailed by its drafter, Jean
Monnet, as "the first expression of the Europe
that is being born," the ECSC set in motion a

groundswell that four decades later would result

in the EU.
See also COLD WAR; EUROPEAN COAL AND
STEEL COMMUNITY; EUROPEAN DEFENSE COMMUNITY; MONNET, JEAN; ORGANIZATION FOR EUROPEAN ECONOMIC COOPERATION; SCHUMAN, ROBERT.

Bibliography
Cook, D. 1989. Forging the Alliance, NATO 1945 to
1950. London: Secker & Warburg.
Gimbel, J. 1976. The Origins of the Marshall Plan.
Stanford, CA: Stanford University Press.
Hogan, M. J. 1987. The Marshall Plan. Cambridge:
Cambridge University Press.
Milward, A. S. 1984. The Reconstruction ofWestern Europe 1945-51. London: Methuen.
Monnet, J. 1978. Memoirs. London: Collins.
Stirk, P. M., and D. Willis, eds. 1991. Shaping Postwar
Europe. London: Pinter.
Urwin, D. W. 1995. The Community of Europe. London:
Longman.
- - - . 1997. A Political History of Western Europe
Since 1945. London: Longman.
Willis, F. R. 1968. France, Germany and the New Europe 1945-1967. Oxford: Oxford University Press.
Zurcher, A. J. 1958. The Struggle to Unite Europe
1940-1958. New York: New York University Press.

-Derek W. Urwin

Ortoll,

Fran~ois-Xavier

(1925- )

Ortoli was president of the Commission between 1973 and 1976. Before that he
had served in a number of senior French government positions and was finance minister between
1968 and 1969. Despite bis experience in French
government and his grasp of economics, Ortoli
was a poor Commission president. His tenure coincided with a downturn in the EC's fortunes as
the relaunch of the early 1970s gave way to high
inflation and unemployment following the oil crisis. Moreover, Ortoli was exceptionally cautious
and unwilling to advance the Commission's interests or agenda. Unusually, he remained in the
Commission after his term as president expired,
serving as a vice president, first under Roy Jenkins and then under Gaston Thorn. He eventually
left the Commission in 1984.
Fran~ois-Xavier

OSCE
See

ORGANIZATION FOR SECURITY AND COOPERA-

nON IN EUROPE.

376

Ostpolitik

Ostpolitik
When German chancellor Willy Brandt came to
power in 1969, he e1evated Ostpolitik (a policy of
bridge building and reconciliation toward the Soviet Union and its satellite states in Central and
Eastem Europe) to a central tenet of German foreign policy. Ostpolitik replaced the inflexible Hallstein Doctrine of nonrecognition of any Western
state that recognized East Germany diplomatically.
Tbe Christian Democrats, in opposition for the first
time in the history of the Federal Republic, denounced Ostpolitik as a seHout of German interests
in the East and a threat to Germany's interests in the
West by the new Social Democratic govemment.
Indeed, some of Germany's allies fretted
about the implications of Ostpolitik for Bonn's
commitments to the EC and NATO. Allied and internal Christian Democratic concern about Ostpolitik obliged Brandt to emphasize his support
for European integration, which in any event he
genuinely espoused. Moreover, Brandt stressed
the importance of British accession as a means of
reassuring those EC member states fearful of
Germany's resurgence. British prime minister
Harold Wilson used Ostpolitik to further his goal
of EC entry by arguing that British accession
would restrain German nationalist ambition.
French president Georges Pompidou also cited
Ostpolitik as a reason to enlarge the EC. Thus
Ostpolitik was a relevant factor in breaking the
deadlock over the EC's fIrst enlargement. By the
same token, once the heads of state and government had decided in principle (at the Hague summit in December 1969) to relaunch the EC,
Brandt feIt secure enough to make his fIrst overtures to the East.
Similarly, Ostpolitik played an important part
in the early development of European Political
Cooperation (EPC). At the Hague summit Pompidou had suggested that the member states attempt
to coordinate their foreign policies. EspeciaHy in
view of Germany's new policy toward the East,
the heads of state and govemment quickly grasped
the utility of at least an exchange of information
on each other's foreign policies. Accordingly, they
appointed Etienne Davignon, a senior Belgian
Foreign Ministry official, to urepare areport by
mid-1970. Tbe ensuing Davignon Report laid the
foundation for EPC.
Germany immediate1y seized on EPC as a
means of building an EC-wide base for Ostpolitik.
At their fust meeting "in EPC"-as distinct from

a meeting of the Council of Ministers--coincidentally held in Munich in November 1970 during

Germany's presidency, foreign ministers stressed
the importance of EPC as "a potential contribution
to detente in Europe." By that time Ostpolitik was
weH on track: Germany and the Soviet Union
signed a treaty in August 1970 after months of intense and highly complex negotiations, although
ratifIcation awaited a Four Power agreement on
the status of Berlin. Enjoying only a narrow majority of seats in the German parliament, Brandt
was especially vulnerable to continuing Christian
Democratic opposition to Ostpolitik, but EPC
helped to quell the domestic opposition's clamor
by providing an additional forum in which Brandt
could explain his eastern initiative to Germany's
western neighbors.
By 1973 Ostpolitik had resuIted in treaties
between Bonn and Moscow, Warsaw, and Prague;
a Four Power agreement on Berlin; and an accord
between the two Germanys. Tbe pace of Bonn's
diplomatic offensive in the East slowed down in
the mid-I970s but never stopped thereafter, even
during the height of the Second Cold War in the
early 1980s. On the contrary, in a less visible form
Ostpolitik became a fIxture of Germany's foreign
policy until reunifIcation in 1990, although for
much of that time it was known as Genscherism,
after Hans-Dietrich Genscher, Germany's longserving foreign minister.
See also GERMANY.

Outermost Regions

The Treaty on European Union identifIes the

French overseas departments, the Azores,
Madeira, and the Canary Islands as the EU's outermost regions. Because of their remoteness,
small size, difficult topography and climate, and
economic dependence on a few products, the EU's
outermost regions are generally depressed and
therefore receive substantial development and infrastructure assistance.

Overseas CountrIes and

Terrltorles (OCTs)
Overseas countries and territories (OCTs) are
colonies or former colonies of the EU's member
states, whose relationship with the EC was originaHy covered by Articles 131-136 of the Rome
treaty. Tbe OCTs are now included in the Lome

Own Resources
eonvention, the EU's development assistanee program for a large number of Afriean, Paeifie, and
Caribbean eountries.
See also LOME CONVENTION.

Own Resources
Own resourees, the sole souree of EU revenue, are
funds that originate in the member states but are
the property of the EU. Own resourees are not

377

supplied by votes in national parliaments but by a

unanimous deeision of the Couneil of Ministers,
subject to eonsultation with the European Parliament and to national ratifieation. The three traditional eategories of own resourees are import duties, levies on imports of agrieultural produets,
and a pereentage of the value-added tax imposed
nationally under EU legislation but not identified
in the tax paid by eonsumers.
See also BUDGET.

p
Pact on Stability In Europe

See

BALLADUR PLAN.

Padoa-Schloppa Report

In April 1987 Tommaso Padoa-Schioppa, deputy

director-general of the Bank of Italy, submitted a
report to the Commission entitled Efficiency, Stability and Equity: A Strategy Jor the Evolution oJ
the Economic System oJ the European Community. Commission president Jacques DeIors had
asked Padoa-Schioppa and six other experts to
prepare the report in order to assess the impact on
the EC's economy of the accession of Spain and
Portugal and of the single market program. Just
as DeIors had hoped that it would, the report
identified four priorities for the EC: the single
market program, a common monetary policy, economic and social cohesion, and an overall macroeconomic strategy.
The report focused especially on the "serious
risks of aggravated regional imbalances in the
course of market liberalization." Although conceding that the single market could improve opportunities for economic convergence between the EC's
rich north and poor south, in a memorable passage
the report warned that "any easy extrapolation of
'invisible hand' ideas into the real world of regional economics in the process of market opening
measures would be unwarranted in the light of economic history and theory." Coming only two
months after the Commission unveiled the DeIors I
budgetary package, the Padoa-Schioppa Report
played an important part in the ensuing dispute
among the member states that ended in adecision
at the February 1988 BrusseIs summit to increase
substantially the size of the structural funds for the
development of the EC's poorer regions.

See also

COHESION POLICY; SINGLE MARKET

PROGRAM.

Papandreou, Andreas
(1919-1995)

Andreas Papandreou, prime minister of Greece

from 1981 to 1989 and again from 1993 to 1995,
was a much maligned figure in the EU. Papandreou's anti-Americanism, opposition to deeper
integration, and intense Greek nationalism infuriated many of his EU counterparts. Under his leadership, Greece became synonymous with obduracy and recalcitrance. Papandreou opposed
proposals for eIoser security cooperation in the
early 1980s, voted against holding an intergovernmental conference in 1985, objected to the deveIopment of a Common Foreign and Security Policy
in the late 1980s, blocked EU recognition of the
former Yugoslav republic of Macedonia in the
early 1990s, and thwarted the improvement of
EU-Turkey relations. Nevertheless Papandreou
strongly supported the EU's cohesion policy, from
which Greece benefited financially. Papandreou's
resignation after a long illness in 1995 removed a
long-standing irritant in Greece's relations with its
EU partners.
See also GREECE.

Paris Summlt
French president Georges Pompidou convened the
Paris summit in October 1972 (the European
Council did not exist at the time) to set the EC's
agenda in the postenlargement period. The summit
is famous--Qr infamous-for the last sentence of a
"solemn declaration" that prefaced the coneIuding
communique: ''The member states of the Community, the driving force of European construction,
affirm their intention before the end of the present
decade to transform the whole complex of their relations into a European Union." This was an extraordinary statement even by the standard of EC
rhetoric and illustrated the member states' high
hopes for European integration at the beginning of
the 1970s. As the 1970s passed, however, the Community became bogged down in high inflation
rates, soaring unemployment, and low economic
growth. With nothing remotely resembling European union on the horizon, the Paris deeIaration
served only to highlight the extent of the Community's disarray by the end of the decade.

379

380

Paris Treaty

Paris Treaty

See TREATY OF PARIS.

Parllamentary Asslzes
See

ASSIZES .

Partnership and Cooperatlon

Agreements (PCAs)

Partnership and Cooperation Agreements (PCAs)

are a category of EU accords with nonmember
states. In terms of economic and political involvement, they are less intense than association agreements (inc1uding Europe Agreements) and more
intense than Trade and Cooperation Agreements
(TCAs). As well as their economic c1auses (perhaps aspiring to a free trade area), PCAs inc1ude a
commitment to principles of human rights and
democracy and involve a "structured" political dialogue between the EU and partner state bOth at
the highest ministerial level and at civil servant
and parliamentary levels. PCAs are so-called
mixed agreements covering both national and EU
competences. As a result, they must be ratified
both at EU level and by the member states at the
national level. The EU has PCAs with most of the
former Soviet republics.
See also COMMONWEALTH OF INDEPENDENT
STATES.

Partnership for Peace (PfP)

At a sumrnit in Brussels in January 1994, NATO

leaders announced the Partnership for Peace (PfP)
program to build confidence between NATO and
the countries of the former Warsaw Pact, NATO's
long-time adversary, and thereby enhance European security. Indeed, the PfP is open to all European countries, inc1uding neutral states. Membership involves joint defense planning, military
exercises, and permanent high-level contacts between NATO and the other participating states.
See also NORTH ATLANTIC TREATY ORGANIZAnON .

Party Groups In the European

Parllament
One of the most direct comparisons between the
European Parliament (EP) and democratically
elected national parliaments is its reliance upon

party (or parliamentary) groups to organize its

daily operation. The party groups' activities have
been described as "Parliament's life blood" (Westlake, 1994, p. 191). In order to understand the role
that party groups play in the operation of the EP,
we must first realize that the nature of legislativeexecutive relations among EU institutions does
not mirror those at the national level. Consequently, although in the daily business of the EP
the EP party groups perform many functions similar to those of their national counterparts, they
have other characteristics quite unique as compared to those national counterparts. This entry
first describes in general the statutory functions
and activities of the party groups and then evaluates the characteristics that make them distinct
from national actors.
Party Groups' Importance

EP mIes perrnit a party group to be founded by 23

members from one member state, 18 members
from two member states, or only 12 from three or
more member states (though the exact numbers
have shifted slightly over the years). The number of
party groups since the first direct elections of 1979
has ranged from eight to eleven. The groups span
the ideological spectrum from left to right, with the
two largest groups, the group of the Party of the European Socialists (PES) and the Christian-Democratic group of the European People's Party (EPP),
accounting for between 53 percent and 69 percent
of seats held in the EP since 1979 (see Table 9).
The other groups represented in the EP
elected in 1994 are the European Liberal, Democratic, and Reformist Party (EDLR); European
Uni ted LeftlNordic Green Left, which inc1udes
among others the communist parties of France,
Greece, and Portugal; the Union for Europe, comprising representatives of Forza Italia and Lega
Nord, French Gaullists, Irish Fianna Fail, members from the Greek Political Spring, and Portuguese center-right politicians; Greens from eight
EU member states; European Radical Alliance
with some French and Italian radicals, Scottish nationalists, and Spanish and Belgian regionalists;
and the Europe of Nations with French and Danish opponents of further European integration and
Dutch members from smaller parties.
There are also nonattached members of the
European Parliament (MEPs), consisting mostly
of French and Belgian National Front members,
the Italian National Alliance, and the Austrian

Party Groups in the European Parliament

Table9

381

Number of EP Seats Held by Party Groups, 1979-1996

Group

CD
Christian Democrats
EPP
European People's Party
PES
European Socialists
European Liberals
L
Liberals and Democrats
LDG
Liberal, Democratic, and
Reformist
ELDR
Comrnunists and Allies
C
European Progressive Democrats
EPD
European Democratic Alliance
EDA
Forza Europa
FE
Union for Europe
UFE
European Democrats (conservatives) EDG
Greens
G
TCDIGMa
Rainbow
European Right
ER
European Radical Alliance
ERA
EN
Europe of Nations
Left Unity
LUG
European United Left
EUL
Non-Affiliated

1982

1983

1984

1985

1986

1987

107
113

107
113

109
112

117
125

117
124

110
130

109
130

118
172

115
165

40

40

63

38

38

31

31

44

44

22

48
22

48
22

41
29

43

42
46

44

44

30

34

29

50

50

63

66

20
16

19
16

20
16

12
20
17

22

22

48

63

63

63

63

11

11

12

11

12

10

10

10

410

410

410

434

434

434

434

518

518

Abbreviation 1988

1989

1990

1991

1992

1993

1994

1995

1996

115
165

121
180

122
180

128
180

162
178

162
198

157
198

173
217

182
215

44

49

49

45

46

44

43

52

43

29

22

22

21

20

20

26
27

66

34
29

34
29

34
27

54

57

28

28

23

27

28

20
16

14
17

14
17

15
14

16
14

16
14

13
29
12

13
28
13

13

15

14
28
9

20
19

19

14
28
10

19
19

23

28
27

33
31

33
49

518

518

518

518

518

518

567

626

626

Christian Democrats
CD
European People's Party
EPP
European Socialists
PES
European Liberals
L
LDG
Liberals and Democrats
Liberal, Democratic, and
ELDR
Reformist
Comrnunists and Allies
C
European Progressive Democrats
EPD
European Democratic Alliance
EDA
FE
Forza Europa
Union for Europe
UFE
European Democrats (conservatives) EDG
Greens
G
TCDIGMa
Rainbow
European Right
ER
European Radical Alliance
ERA
Europe of Nations
EN
Left Unity
LUG
European United Left
EUL
Non-Affiliated
Total Members of the
European Parliament

1981

64

Total Members of the

European Parliament
Group

1980

Abbreviation 1979

48

a. Technical Coordination Group for the Defense of the Interests of Independent Groups and Members

Freedom Party. Only the PES and EPP (with the

qualified membership of the British Conservative
Party) groups are made up of parties from all fifteen of the EU's member states.

In terms of the EP's internal arrangements,

the party groups are the key players. They are
primarily responsible for selecting the Parliament's leaders: the president, vice presidents and

382

Party Groups in the European Parliament

quaestors, the committee chairs and vice-chairs,

and so on. The groups also set the parliamentary
agenda, choose the committee rapporte urs, and
decide on the allocation of speaking time. The
groups manage their activities with their own EPfunded staff as weH as the nonpolitical secretariat
of the EP itself. The internal structures of the
groups are relatively similar, with a bureau composed of achair, vice-chair, treasurer, and maybe
others. The bureaux take up matters relating to the
political positions of a group as weH as its administration. Groups are further divided internally by
national delegations, and posts within group structures are alloted by the relative size of national
delegations, who are also the direct beneficiaries
of the funds spent among groups. Final mention
regarding the routine work habits of party groups
must inc1ude their travel schedule. As is weIl
known, the plenary sessions of the EP take place
one week each month (except August) in Strasbourg, France. Back in Brussels, a "group week"
is set aside when matters relating to the next plenary session are discussed, the group's own activities are sorted out, and meetings with visiting delegations are hosted. The rest of each month is
taken up with EP committee meetings, again usually based in Brussels.
The final point to address regarding the importance of the groups to the work of the EP is the
interinstitutional relationship between the Parliament and the Council of Ministers. Several procedures govern the legislative process between the
EP and the Council, but especially since the
Treaty on European Union, a co-decision procedure makes ever more crucial the fact that the EP
needs to be able to constitute a qualified majority
vote vis-a-vis Council decisions. Although the socialists have been the largest group in the EP for
two terms, and the EPP before it, never has one
group held a majority of seats. The need for stable
coalitions is thus decisive, yet a consistent left or
right majority coalition has not developed. Certainly on selected issues the PES has been able to
cobble together left majorities, but these have
been transitory. This has meant that for the EP to
exercise fully its role vis-a-vis the other EU institutions and thereby gain a measure of legitimacy,
the two largest groups, the socialists and Christian
Democrats, have been obliged to combine forces
when special majorities are required (Jacobs, Corbett, and Shackleton, 1995).

Unique Features of Party Groups

Interinstitutional relations among the EP, Commission, and Council cannot be described in traditionallegislative-executive terms. After all, the EP
is not a traditional parliament supporting an
elected govemment (executive) represented by the
Commission. Compared to the statutory roles of
national parliaments, the EP is much more an advisory body. Nevertheless, the EP's influence visa-vis the Commission and Council has evolved
since implementation of the Single European Act
in 1987. It is in this context that the role of the
party groups has also developed, as the crucial requirement for a qualified majority vote in the cooperation and co-decision procedures makes c1ear.
However, existing at a level that does not replicate
the national arena of politics and with no direct
executive to influence, the party groups have characteristics peculiar to their environment. 1\vo general features of party groups make them different
from their national counterparts: first, the constraint upon the left-right balance in the Parliament; second, the problem of voting cohesion.
The left-right ideological c1eavage is apparent in many ways among the EP party groups, at
the very least in the labels appropriated by the
groups themselves, for example, socialist, liberal,
and so forth. However, a c1ear left-right identity
has not so easily been produced in terms of voting
patterns. There are two reasons for this. The first
is the need for stable majorities in order to operate
the cooperation and co-decision procedures. As
pointed out earlier, the safest route toward ensuring this majority has been through a PES-EPP
combination of forces. Yet the necessity of this
tactical arrangement undermines efforts at building either a cohesive left or right bloc in the EP. A
second reason for the lack of a left-right identity is
a difference of opinion regarding the integration
process itself, with ardent federalists and their opponents found in groups on both sides.
Voting cohesion is often thought of as a defining characteristic of parliamentary parties. Indeed,
arecent study on voting cohesion in the EP states
that "analyses of national parliamentary parties
frequently focus on their ability to achieve voting
majorities. Parliaments and assemblies make authoritative statements by voting on bills and resolutions. This is true in the European Parliament as
elsewhere" (Brzinski, 1995, p. 138). Studies have
highlighted the fact that voting cohesion among EP

Passport

383

party groups appears to be weak: compared to national parliamentary parties. Several factors contribute to this situation. Olle is timt national considerations affect voting patterns within groups. For
instance, an issue of notable worth to French interests may oblige French EPP and Union for Europe
parliamentarians to abstain or even to vote against
the general EPP line. Another factor is the lack of a
uniform electoral procedure for EP elections. Arguably variable electoral systems, and thus the nature of linkages with constituents, may result in
different behavioral voting patterns between national delegations (Bowler and Farrell, 1993). Despite these factors, which above all point to the relative heterogeneity of EP party groups compared
to most national parliaments, the trend since 1989
has been toward more cohesiveness within party
groups as more and more policy issues come under
the purview of EU competences (Judge, Eamshaw,
and Cowan, 1994).

Bowler, Shawn, and David FarreII. 1993. "Legislator

Shirking and Voter Monitoring: Impacts of European
Parliament Electoral Systems Upon Legislator-Voter
Relationships." Journal of Common Market Studies
31,no.l,pp.45-69.
Brzinski, Joanne Bay. 1995. "Political Group Cohesion
in the European Parliament." In Carolyn Rhodes and
Sonia Mazey, eds., Building a European Polity? pp.
135-158. Vol. 3 of The State ofthe European Union.
Boulder: Lynne Rienner.
Jacobs, Francis, Richard Corbett, and Michael Shackleton. 1995. The European Parliament. 3d ed. London:
CartermiII International.
Judge, David, David Earnshaw, and Ngaire Cowan.
1994. "Ripples or Waves: Tbe European Parliament
in the European Community Policy Process." Journal of European Publie Policy 1, no. 1, pp. 27-52.
WestIake, Martin. 1994. A Modem Guide to the European Parliament. London: Pinter.

Concfusion
With the introduction of direct elections in 1979,
party groups were thought to be embryonic European political parties. No doubt because of the nature of EU interinstitutional dynarnics, notably the
lack of EP control over a democratically accountable executive and the influence of national considerations in party group voting patterns and ideological identity formation, the development of true
European parties is still an open question. Within
the EP itself, though, a party system of sorts has
c1early developed, with the two largest groups constituting the core of this system (Bardi, 1996). EP
party groups are also intimately tied to national parties-the most cruciallink being the nomination of
candidates for EP elections by national party leaderships-so that their future development depends
to a great extent on changing perspectives about the
role of the EP by political elites in the member
states themselves. Nevertheless, the increasing activities of the EP and by definition the party groups
on issues such as employment policy, environmenta1 policy, and so on means that party groups have
the potential to frame policies at a European level.
See also EUROPEAN PARLIAMENT; APPENDIX 5.

Party of the European

Soclallsts (PES)

Bibliography
Bardi, Luciano. 1996. "Transnational Trends in European Parties and the 1994 Elections of the European
Parliament." Party Polities 2, no. I, pp. 99-114.

-Robert Ladrech

Tbe Party of the European Socialists is the largest

and oldest party group in the European Parliament, drawing members from all member states.
See also PARTY GROUPS IN THE EUROPEAN
PARLIAMENT.

Passerelle
Tbe passerelle (gateway) provision of Artic1e K.9
of the Treaty on European Union (TEU) allows
the transfer of competence (responsibility) for certain aspects of justice and horne affairs from the
intergovernmental third pillar to the supranational
first pillar of the EU, subject to unanirnity in the
Council of Ministers and ratification by the member states.
See also JUSTICE AND HOME AFFAIRs.

Passport
Although the EU itself does not issue passports,
member-state passports have been redesigned to
resemble each other: burgundy, with the words
"European Union" in the center of the cover and
the name of the member state at the bottom of the
cover. This change has met some resistance from
EU citizens, especially in the more Euroskeptical
member states (notably Britain and Denmark).

384

PCAs

Tbe EU's desire to harmonize the appearance of

passports is an effort partly to enhance the EU's
international profile and partly to engender a
"people's Europe," as recommended by the Adhoc Committee on a People's Europe (Adonnino
Committee) in its 1985 report to the European
Council.

PCAs

See PARTNERSIDP AND COOPERATION AGREEMENTS.

A Peace and Securlty System

tor Post-Cold War Europe:
Preventlng Future "Yugoslavlas"
This entry ouilines a peace and security system for
post-Cold War Europe within the context of the
Organization for Security and Cooperation in Europe (OSCE) that can deal with, among other
things, intractable ethnic conflicts such as those
that have been occurring in the former Yugoslavia.
It also suggests what role(s) the EU can play, or is
playing, in this regard.
Theoretical Background
A number of concepts are relevant to dealing with
violent conflict, inc1uding the violent ethnic conflicts that have been taking place in post-Cold
War Europe. We can distinguish, for instance, between competitive and cooperative approaches to
conflict resolution (Deutsch, 1973). Competitive
approaches are power based, adversarial, confrontational, and zero-sum (win-Iose) in nature,
associated with a realpolitik approach to human
relations, whereas cooperative approaches are
nonpower based, nonadversarial, and positive sum
(win-win) in nature, associated with an idealpolitik approach (SandoIe, 1993a).
We can also distinguish between negative and
positive peace (Galtung, 1969). Negative peace is
what most people, including diplomats, mean
when they address the issue of peace: the absence,
prevention, or cessation of hostilities. There is
nothing wrong with peace in this sense, but it is
not the whole picture. Positive peace, which helps
to complete the picture, is the elimination of such
structural violence as systems in which members
of certain ethnic, religious, racial, and/or other
groups have unequal access to economic, political,
social, and other resources typically presided over
and enjoyed by members of mainstream groups.

The third and final distinction for our purposes here is between so-called track-l and track2 approaches to conflict resolution. Track 1 deals
with governmental, track 2 with nongovernmental
mechanisms and processes for responding to conflict (Montville and Davidson, 1982; McDonald
and Bendahmane, 1987; Diamond and McDonald,
1991). Track-l warriors and diplomats typically
operate within arealpolitik framework in which
they use various kinds and degrees of competitive
means for achieving negative peace. Tbe design as
weH as the implementation of the peace and security system proposed here calls for a shift in that
framework: from a uni dimensional realpolitik paradigm composed of track-l competitive approaches to negative peace to a multidimensional
system composed of these plus idealpolitik-based,
track-2 cooperative approaches to positive peace.
Such multidimensionality is inherent in what can
be called a new European peace and security system (NEPSS).

A New European Peace and Security System

NEPSS requires the refrarning of existing institutions in Europe and their interrelationships. Tbe
most comprehensive and inclusive of these, the
OSCE, serves as the basic organizing device. Its
fifty-five participating states, "from Vancouver to
Vladivostok," represent all former enemies of the
Cold War plus the neutral and nonaligned. When
the then Conference on Security and Cooperation
in Europe (CSCE) was launched nearly twentyfive years ago, its architects identified what have
emerged as three components of overall security:
(1) political/military, (2) economic/environmental,
and (3) humanitarianlhuman rights (Bloed, 1993).
In the wake of the ending of the Cold War, other
existing institutions corresponding to each of
these three components have been expanding, or
contemplating their expansion, to inc1ude former
Cold War adversaries in common organizations,
processes, and mechanisms, thereby facilitating a
"paradigm shift" from national to common security: for example, NATO, the North Atlantic Cooperation Council, Partnership for Pe ace, and
Western European Union in the politicaVmilitary
component; the EU in the economic/environmental component; and the Council of Europe in the
humanitarianlhuman rights component (Sandoie,
1993b).
As inclusiveness increases further along these
lines, the OSCE could become more effective at

A Peace and Security System for Post-Cold War Europe: Preventing Future "Yugoslavias"
proactively exhausting its new early warning, conflict prevention, and crisis management mechanisms before use of the more usual reactive competitive measures is contemplated. There is one
major problem with this scenario. As formulated
up to this point and as developed thus far, NEPSS
is, like its constituent parts, basically an interstate
structure, whereas the great majority of conflicts
that are occurring worldwide are struggles within
states (Van Creveld, 1991; Sollenberg and Wallensteen, 1995). What is needed, therefore, is for
OSCEINEPSS to incorporate mechanisms and
processes that would enable them to deal effectively with intrastate conflicts, for example, what
might be called integrated systems of conflict resolution networks (Sandoie, 1993c).
The "integrated systems" component of
NEPSS comprises two dimensions: vertical and
horizontal. Under the vertical dimension, track-l
and corresponding track-2 mechanisms and
processes would liaise and collaborate at-and
across-Iocal, societal, subregional, regional, and
international levels in order, among other things,
to prevent spillover across levels. One premise
here is that it is easier to contain and deal with a
"fire" at the local level, before it spreads elsewhere. Another is that if sources of conflict are
found at different levels, then efforts to deal with
conflict must reflect those levels as weIl.
If certain extreme conditions prevail-for instance, if one party to a conflict attempts to impose a genocidal "final solution" on anotherthen the horizontal dimension should become
operational, whereby a "measured" amount of realpolitik may be used, but only as part of a larger,
basically idealpolitik strategy, to achieve negative
peace as a necessary (but clearly not sufficient)
condition of positive peace. As Fisher and Keashly
argued, an intervention should initially match the
intensity of the conflict and then combine additional "interventions, if necessary, in appropriate
sequences, to further de-escalate the conflict"
(1991, p. 36).
Any use of violence, however, no matter how
justifiable on humanitarian or pragmatic grounds,
may be counterproductive, resulting in more violence. Nevertheless, NATO bombing of Bosnian
Serb positions in August and September 1995
does appear to have played an important role in
bringing to Bosnia a negative peace that thus far
has been fairly weIl maintained by the U.S.-Ied
NATO Implementation Force (IFOR) (later known

385

as the Stabilization Force-SFOR) under the Dayton Peace Accords. Thus the negative-peace aspects of Dayton have enjoyed a certain amount of
success, but this has not been matched by success
along the positive-peace front, even though the
EU has been involved in the reconstruction of
war-tom Bosnia and the OS CE has been involved
in, among other things, running elections.
As usual, the international community has
been doing what its diplomatic and military practitioners have been trained to do: achieve and
maintain negative peace. But in the absence of
processes perceived to be leading to positive
peace, negative peace in former Yugoslavia is
bound to faiI. Accordingly, for NEPSS really to
get off the ground, to the extent that it can prevent
future "Yugoslavias," it must succeed in the present Yugoslavia.
Here, the EU is weIl positioned to make a difference. It has already, for example, participated
in its first ambitious Common Foreign and Security Policy project by helping Bulgaria, the Czech
Republic, Estonia, Hungary, Latvia, Lithuania,
Poland, Romania, and Slovakia (the countries involved in the Pact on Stability in Europe-the
Balladur Plan) deal with their border and minority
problems as necessary conditions of their eventual
membership in the EU (Helenius, 1995). In this
regard, the EU is doing more than facilitating realization of the OSCE's economic goals, because its
activities in Central and Eastern Europe reflect politicaUmilitary, environmental, and humanitarianJhuman rights aspects of security as weIl. Simply put, with regard solely to the Balladur Plan,
the EU's activities in post-Cold War Europe cut
across all three components of the OSCEINEPSS.
Further, the OSCE's adoption of the Balladur
Plan, for evaluation and monitoring of the implementation of agreements and arrangements concerning borders and minorities, represents the
kind of interorganizational collaboration that is
crucial to NEPSS and to the prevention of future
"Yugoslavias."
But against the background of these longerterm objectives, in the short to middle run the EU
will have to do more of what it, together with the
World Bank, did at a two-day meeting of donor
nations in April 1996: galvanize the international
community to commit the funds necessary for the
reconstruction of Bosnia. And to avoid replicating
its failure to reunite the Croatian and Muslim sectors of Mostar, the EU must concentrate its atten-

386

Permissive Consensus

tion on the reconciliatory as weH as economic infrastructural aspects of reconstruction. Perhaps the
EU's proposed European Civilian Peace Corps
can playa role in this regard.
Bosnia is a dear case in which negative peace
is aprerequisite to positive peace. Without a credible peacekeeping force, generous financial assistance was bound to come to naught. Hence, the EU
had to operate on two fronts simultaneously: laboring to keep troops in Bosnia beyond the December
1996 deadline for IFOR's withdrawal while facilitating the "perceptible" reconstruction of the country, not just to save the Dayton agreement but also
to advance the idea of something like an NEPSS to
deal with future "Yugoslavias." Through this and
its longer-term activities in post-Cold War Europe,
the EU may indeed become "the most important
European organization for mitigating ethnic tensions" (Walker, 1991, p. 50).
See also COMMON FOREIGN AND SECURITY

ory and Practice: Integration and Application. Manchester: Manchester University Press.
- - - . 1993b. "Post-Cold War Peace and Security
Systems in Europe: Prospects and Prescriptions."
Peace and the Sciences (March), pp. 5-12.
- - - . 1993c. "Ethnie Conflict Resolution in the New
Europe: A Case for an Integrated Systems Approach." In Judit Balazs and Hakan Wiberg, eds.,
Peace Researchfor the 1990s. Budapest: Hungarian
Academy of Sciences.
Sollenberg, Margareta, and Peter Wallensteen. 1995.
"Major Armed Conflicts." In SIPRI Yearbook 1995:
Armaments, Disarmament and International Security (Stockholm International Peace Research Institute). Oxford: Oxford University Press.
Van Creveld, Martin. 1991. The Transformation ofWar.
New York: Free Press.
Walker, Jennone. 1991. "European Regional Organizations and Ethnic Conflict." In Regina Cowen Karp,
ed., Central and Eastern Europe: The Challenge of
Transition. Oxford: Oxford University Press.

-Dennis J.D. Sandale

POLICY; ORGANIZATION FOR SECURITY AND Cc)()PERATION IN EUROPE; YUGOSLAVIA.

Bibliography

Bloed, Arie, ed. 1993. The Conference on Security and

Cooperation in Europe: Analysis and Basic Documents, 1972-1993. Dordrecht: Kluwer Academic
Publishers.
Deutsch, Morton. 1973. The Resolution of Conflict:
Constructive and Destructive Processes. New
Haven: Yale University Press.
Diamond, Louise, and John McDonald. 1991. MultiTrack Diplomacy: A Systems Guide and Analysis.
Occasional Paper no. 3. Grinnell: Iowa Peace Institute.
Fisher, Ronald J., and Loraleigh Keashly. 1991. "The
Potential Complementarity of Mediation and Consultation Within a Contingency Model ofThird Party
Intervention." Journal of Peace Research 28, no. 1,
pp. 29-42.
Galtung, Johan. 1969. "Peace, Violence and Peace Research." Journal of Peace Research 6, pp. 167-191.
Helenius, Harry. 1995. "More Stability in Europe."
OSCE Review 3, no.l, pp. 8-9.
McDonald, John, and Diane Bendahmane, eds. 1987.
Conflict Resolution: Two Track Diplomacy. Washington, DC: U.S. Department of State, Foreign Service Institute.
Montville, Joseph v., and William Davidson. 1982.
"Foreign Policy According to Freud." Foreign
Policy, no. 45 (Winter 1981-1982), pp. 145-157.
Sandole, Dennis J.D. 1993a. "Paradigms, Theories, and
Metaphors in Conflict and Conflict Resolution: Coherence or Confusion?" In Dennis J.D. Sandole and
Hugo van der Merwe, eds., Conflict Resolution The-

Permissive Consensus
Leon Lindberg and Stuart Scheingold, two early
theorists of European integration, used the term
permissive consensus to describe how "the Community enterprise was seemingly taken for granted
[by European publics] as an accepted part of the
political landscape." The permissive consensus
began to erode as the EC enlarged (Britain and
Denmark were Euroskeptical from the outset) and
acquired greater competence, first with the Single
European Act and later with the Treaty on European Union (TEU). Indeed, the TEU ratification
crisis showed that a permissive consensus no
longer existed by the early 1990s.
See also DEMOCRATIC DEFICIT; LEGITIMACY.

PES
See PARTY OF THE EUROPEAN SOCIALISTS.

Petersberg Declaratlon
At a meeting held in Petersberg, near Bonn, in
lune 1992, foreign and defense ministers of the
Western European Union (WEU) endorsed WEU
involvement in future conflict prevention and
peacekeeping operations (so-called Petersberg
tasks or missions). In lanuary 1994 NATO leaders

Poland
endorsed the idea of combined joint task forces
(CJTF), in part to facilitate the conduct of so-called
Petersberg tasks. The AInsterdam Treaty, negotiated by the EU member states during their
1996-1997 intergovernmental conference, brought
Petersberg operations-defined as "humanitarian
and rescue tasks, peacekeeping tasks and tasks of
combat forces in crisis management, inc1uding
peacekeeping"-within the scope of the EU's
Common Foreign and Security Policy. To carry out
those operations, the EU would "avail itself of the
WEU."
See also COMMON FOREIGN ANO SECURITY
POLICY; WESTERN EUROPEAN UNION.

PetersbergTasks
See PETERSBERG DECLARATION.

PETRA
PETRA is a program for the vocational training of
young people and their preparation for adult and
working life. Begun in 1988, PETRA was designed to complement national vocational youth
training programs, promote worker mobility, support the EC's research and technological development program, and help consolidate the single
market. In 1995 PETRA was superseded by
LEONARDO DA VINCI, the EU's current program "to ensure the implementation of a vocational training policy which will support and supplement the action of the Member States as a
means towards realizing an open European area
for vocational training and qualifications."
See also EOUCATION, VOCATIONAL TRAINING,
AND YOUTH POLICY.

PfP

See

PARTNERSHIP FOR PEACE.

PHARE
See

POLOGNE ET HONGRIE: AcrrONS POUR LA

RE-

CONVERSION EcONOMIQUE.

Pillars
The EU has tbree pillars. Pillar One is the EC, embracing the European Econornic Community, the

387

European Coal and Steel Community, and the European Atornic Energy Community. Pillar Two is
the Common Foreign and Security Policy, and Pillar Three is Cooperation on Justice and Horne Affairs. Pillar One is supranational; Pillars Two and
Three are intergovernmental.
See also TREATY ON EUROPEAN UNION.

Poland
Central Europe's most populous and strategically
located country, Poland is poised to become one
of the first of the former Soviet-bloc countries to
join the EU. Given the nature of East-West relations during the Cold War, the EU's relationship
with Poland is relatively new. As part of the EastWest thaw following Mikhail Gorbachev's accession to power in the Soviet Union, the EC and
Poland signed a trade and econornic cooperation
agreement on September 19, 1989. Before that, at
the July 1989 Paris sumrnit, the G7 countries
agreed to launch a program of assistance for Hungary and Poland to support the econornic and political reforms rapidly unfolding there. Later in
1989 the Council of Ministers approved the
launching of Pologne et Hongrie: Actions pour la
Reconversion Econornique (PHARE), a Community-funded program of technical assistance to encourage the development of private enterprise and
the building of market-oriented econornies.
The EU and Poland signed a Europe Association Agreement on December 16, 1991, that did not
come into force until February 1, 1994. The agreement inc1uded the progressive establishment of a
free trade area over ten years and a regular political
dialogue at the highest levels of government. Pending ratification of the Europe Agreement, Brussels
and Warsaw implemented an interim agreement on
March 1, 1992, covering the Europe Agreement's
economic and trade provisions. Poland is also implementing a Comrnission-approved preaccession
strategy in order to prepare the country econornically and adrninistratively for EU membership.
Based on various European Council dec1arations
and a favorable Comrnission opinion, Poland began
accession negotiations in early 1998.
The EU is Poland's main trading partner, and
accession should greatly strengthen Poland's
emerging economy. However, the EU is concemed
about continued Polish subsidization of industry
and about the possible impact of Polish accession

388

Political Committee

on the Common Agricultural Policy (CAP)

(Poland has a large farm sector) and on cohesion
policy (Poland's GDP is considerably smaller than
the EU average). Without reform of the CAP and
cohesion policy, Polish accession could break the
EU's budget.
Poland also sees EU membership as a means
of strengthening its security vis-a-vis Russia, with
which it continues to have a tense relationship. Together with NATO membership in 1999, EU membership early in the next decade will enhance
Poland's economic and political welfare on the
EU's potentially unstable eastern flank. However,
EU membership is no panacea: Poland's unemployment rate is likely to hover around 13 percent
for the foreseeable future, and adjustment to Western European economic standards will continue to
be painful.
See also CENTRAL AND EASTERN EUROPEAN
STATES; TABLE 6.

Polltlcal Commlttee
Made up of top officials in the foreign ministries
of the EU's member states, the Political Committee prepares meetings of foreign ministers to discuss Common Foreign and Security Policy
(CFSP) issues. Officially the Political Committee
is under the auspices of the Committee of Permanent Representatives (COREPER), but COREPER
rarely amends the Political Committee's recommendations.
See also EUROPEAN POLmCAL COOPERATION;
COMMON FOREIGN AND SECURITY POLICY.

Polltlcal DIrectors
See POLmCAL COMMITfEE.

Polltlcal Union
See EUROPEAN POLmCAL UNION.

Pologne et Hongrle:
Actlons pour la Reconverslon
Economlque (PHARE)
Pologne et Hongrie: Actions pour la Reconversion
Economique (PHARE) is an EU-funded program
of technical and financial assistance for the Central
and Eastern Europe states (CEES) in such areas as
environmental protection, infrastructure, nuc1ear

safety, education and training, and business development. At the annual G7 summit in July 1989, the
Commission agreed to coordinate aid from the
broader G24 (the group of twenty-four most industrialized countries) to Poland and Hungary, which
were then attempting to establish postcommunist
political and economic systems. Later in 1989 the
Council of Ministers approved PHARE to support
the economic and political reforms underway there.
With the fall of the Berlin Wall in November 1989
and the revolutions in other CEES, the EC was
faced with the more demanding task of helping to
stabilize the postcommunist order in the entire region. As a result, PHARE was gradually extended
to the other Central and Eastern European states in
the early and mid-1990s. The following countries
receive PHARE support: Albania, Bosnia, Bulgaria, the Czech Republic, Estonia, the Former Yugoslav Republic of Macedonia, Hungary, Latvia,
Lithuania, Poland, Romania, and Slovenia. PHARE
support now focuses especially on the transport
sector, in particular the development of trans-European "corridors." In 1996 the EU dispensed ECU
1.2 billion through PHARE, making it by far the
biggest donor in Central and Eastern Europe.
See also CENTRAL AND EASTERN EUROPEAN
STATES.

Pompldou, Georges
(1911-1974)
Georges Pompidou succeeded Charles de Gaulle
as president of France in 1969 and struggled immediately with de Gaulle's mixed legacy to the
EC. Having served as prime minister of France
between 1962 and 1968, Pompidou was steeped in
Gaullism. When de Gaulle dismissed Pompidou at
the height of the student unrest in 1968, relations
between them quickly soured. Pompidou exacted
sweet revenge by winning the presidential election
in 1969 and charting his own European policy.
But in one respect at least, Pompidou remained faithful to de Gaulle: he disliked supranationalism and espoused intergovemmentalism. As
for enlargement, Pompidou was in a dilemma. For
Gaullist diehards, whose support Pompidou could
not easily sacrifice, the veto of Britain's EC membership application had become sacrosanct. Yet
for a growing body of French opinion, and for
France's EC partners, revoking the veto was the
only means by which France could possibly retain
influence and credibility in the Community.

Portugal 389
Regardless of his personal and political preferences, there was an obvious objective change in
France's circumstances in the late 1960s that impelled Pompidou toward accepting enlargement.
The events of 1968 had enfeebled France economicaIly. Moreover, by the late 1960s Germany was
economically resurgent and politically assertivethe new chancellor, Willy Brandt, was about to
launch an ambitious initiative (Ostpolitik) toward
Eastern Europe and the Soviet Union. The combination of Germany's growing economic power and
rising political confidence made enlargement a
more appealing alternative for Pompidou. Together,
Britain and France in the West might counterbalance Germany's increasing weight in the East and
establish geopolitical symmetry in the EC.
Faced with incipient Western apprehension
about the impact of Ostpolitik and domestic pressure for a French initiative in the EC, Pompidou
called a special meeting of the heads of state and
govemment for December 1969. The Hague summit-the Netherlands then held the rotating Council presidency-was the first meeting of Community leaders since the tenth anniversary celebration
of the Treaty of Rome in 1967. With de Gaulle
gone and enlargement once again at center stage,
most member states anticipated a decisive breakthrough; in the end, the summit spawned the
"spirit of The Hague," a feeling that the EC was
once more on the move.
To assuage domestic opinion and split the
left-wing opposition, Pompidou called a referendum on EC enlargement in March 1972. Despite a
poor tumout, a majority of the electorate endorsed
the president's position, thereby removing the remaining political obstaele to enlargement. In the
meantime, the accession negotiations had coneluded satisfactorily. Finally, on January 1, 1973,
Britain, Ireland, and Denmark joined the EC.
Three months previously Pompidou had convened
another summit to chart the Community's agenda
in the postenlargement period. But Pompidou did
not live long enough to enjoy the fruits of enlargement or to witness the Community's economic deeline in the aftermath of the oil embargo: he died
in April 1974.
See also FRANCE.

Portugal
Portugal joined the EC on January 1, 1986. EC
membership was important to the consolidation of

Portuguese democracy, which had emerged haltingly after a military coup in April 1974 against an
authoritarian regime that had ruled since 1926.
Portugal had first tried to join the EC in the early
1960s, but negotiations resulted only in a Special
Relations Agreement signed on July 22, 1972.
This was embedded in several such agreements
signed between the EC and other European Free
Trade Association (EFTA) countries. Portugal's
authoritarian regime and colonial wars prevented
a elose relationship with the EC until after the
1974 revolution and the adoption by Portugal of a
democratic regime in April 1976. The rninority
Socialist government that emerged after the legislative elections of April 25, 1976, under the leadership ofMano Soares, set Portugal's membership
of the EC as a top priority.
Portugal's application, presented by Soares
on March 28, 1977, was weIl received by the
Council of Ministers. The ensuing Commission
opinion was very positive, drawing attention only
to some structural econornic problems that Portugal could face in view of accession. Negotiations
between Portugal and the EC officially began in
Luxembourg on October 17, 1978, although substantive discussions did not get under way until
1980.
Between 1980 and 1986 Portugal faced many
difficulties in the negotiations. Linking Portugal's
application to that of Spain created considerable
delay, because Spain was a larger country and required more institutional adaptation by the EC. In
1978-1979 and 1983-1984, two International
Monetary Fund standby credits had to be implemented to stabilize the Portuguese economy. At the
same time the EC granted several financial preaccession aid packages to help Portugal prepare for
membership. Finally, the treaty of accession was
signed on June 12, 1985, in the splendid Mosteiro
dos Jer6nimos in Belern, near Lisbon.
Portugal's integration into the EC has had a
positive spillover effect on the country. The flow of
structural funds since 1986 has been an important
factor in Portugal's econornic transformation. Between 1986 and 1988 Portugal received around
ECU 1.2 billion from the European Regional Development Fund (ERDF) and between 1986 and
1990 received about ECU 2.6 billion in loans from
the European Investment Bank (EIB). After the reform of the structural funds in 1988, the first Common Support Framework (CSF) for the period between 1989 and 1993 totaled ab out ECU 7.4

390

Portugal

billion. These financial transfers were invested in

the creation and modernization of economic infrastructures, development of human resources, agricultural and rural deve1opment, industrial conversion, and restructuring and regional development.
The most recent CSF, for the period 1994 to
1999, more than doubled the EU's contribution,
and Portugal's priorities were reduced to four:
economic modernization, deve10pment of human
resources, modernization of public infrastructures,
and regional development. The whole territory of
Portugal is eligible to receive assistance from the
ERDF, the European Social Fund (ESF), and the
guidance section of the European Agricultural
Guidance and Guarantee Fund (EAGGF), all of
which are allocated under the Objective 1 criterion
(disadvantaged regions) of the structural funds. A
first analysis of the impact seems to show that the
Portuguese economy has improved vis-a-vis the
EU's average per capita GDP (1986: 52 percent;
1992: 56 percent), although economic disparities
continue to prevail inside Portugal. Readjustrnent
in targeting the funds to the poorer regions of Portugal (in the interior of Portugal) rather than to the
richer regions on the west coast is a priority of the
new CSF, which inc1udes a more flexible approach from region to region. The structural funds
came at an opportune time for Portugal; its economy was having major difficulties adapting to the
single market program. Several industrial firms
and the agricultural sector almost collapsed as a
result of competition from other EU countries
(Eaton, 1994; Syrett, 1994; Eisfeld, 1989).
Domestic political institutions needed some
time to adjust to EC membership. The most important agency at governmental level became the
State Secretary for European Affairs (Secretario
de Estado para Assuntos Europeus) attached to the
Ministry of Foreign Affairs. The Portuguese govemment decided to skip the EC presidency in
1986 because it feit that it needed more time to
prepare for this task. Accordingly, the first time
that Portugal presided over the Council was in the
first half of 1992, when Foreign Minister Joao de
Deus Pinheiro dealt with several difficult issues,
such as reform of the Common Agricultural Policy, ratification of the Treaty on the European
Union (TEU), the UN conference on the environment, and the outbreak of war in Bosnia.
The Assembly of the Republic (AR), Portugal's national parliament, kept a low profile in EC
affairs unti11992. Tense executive-legislative rela-

tions, a dearth of direct information coming from

the European institutions, and lack of professionalization by members of parliament were major
obstac1es for earlier involvement by the AR in
monitoring the translation of EC legislation into
nationallaw. This changed in 1994 with the adoption of a law assuring monitoring by the AR of the
process of European integration. In December
1992 the Portuguese constitution was revised to
meet the requirements of the TEU (Portugal's
third constitutional change in two decades)
(Magone, 1995).
Portugal sends one commissioner to Brussels
(in the Santer Commission, former foreign minister Joao de Deus Pinheiro is responsible for relations with the African, Caribbean, and Pacific
states and with South Africa). In the European
Parliament (EP), Portugal originally nominated
twenty-four members but now sends twenty-five
members to Strasbourg. However, Euro-elections
are not very significant in Portugal, generally reproducing almost the same party structure as in 10cal and national elections. Tumout in elections to
the EP is low by national election standards.
The Portuguese Socialist Party (PS) is a moderate, social democratic party and a member of the
socialists group in the EP. The Social Democratic
Party (PSD), known as the "most Portuguese" of
the political parties, is a socialliberal party and a
member of the European Liberal, Democratic, and
Reformist group in the EP. Both parties are extremely pro-European. By contrast, the communist Democratic Unitary Coalition is skeptical of
the process of European integration in general and
of the TEU in particular. The populist People's
Party (PP) was originally a Christian democratic
party that supported European integration. But
electoral dec1ine in the 1980s and early 1990s led
to the emergence of a new leader, Manuel Monteiro, who adopted a more nationalistic position
and rejected the TEU because of its restriction of
national sovereignty (Magone, 1996c). Not surprisingly, the European People's Party (the Christian Democrats in the EP) subsequently expelled
Monteiro's People's Party.
Generally, a majority of the Portuguese are
pro-European. Nevertheless the euphoria of the
1980s has been replaced by a more down-to-earth
mood in the 1990s. Arecent Eurobarometer survey gave some hints about the present attitude of
the population toward European integration: 63
percent were hopeful about the new EU; 46 per-

Preliminary Ruling Procedure

cent thought EU membership a good thing as

against 14 percent who thought it a bad thing; 63
percent of Portuguese supported European unification, and 58 percent thought that Portugal had
benefited from European integration; a majority
expected that a single currency would be possible
by the turn of the century; 62 percent expected a
comrnon defense policy to become reality by
2010; about 47 percent described themselves as
being both Portuguese and European, whereas 44
percent responded that they had only anational
identity; a tiny minority (4 percent) considered
themselves to be European first and Portuguese
second; only 1 percent had a European identity
alone (Comrnission, 1995, pp. 4-5, 26-27).
See also TABLE 6; APPENDIX 2; APPENDIX 3.

Bibliography
Commission. 1995. Eurobarometer: Publie Opinion of
the European Union, 43, Auturnn. Luxembourg: Office for Official Publications of the European Communities.
Eaton, Martin. 1994. "Regional Development Funding
in Portugal." Journal ofthe Assoeiationfor Contemporary Iberian Studies 7, no. 2, pp. 36-46.
Eisfeld, Rainer. 1989. "Portugal in the European Community 1986-1988. The Impact of the First Half of
the Transition Period." Iberian Studies 18, no. 2,
1989, pp. 156-165.
Lopes, Jose da Silva, ed. 1993. Portugal and EC Membership Evaluated. London: Pinter.
Magone, Jose M. 1995. ''The Portuguese Assembleia da
Republica: Discovering Europe." Journal of Legislative Studies 1, no. 3, pp. 151-165.
- - - . 1996a. The Changing Architeeture of Iberian
Polities (1974-92): An Investigation on the Demoeratie Strueturing of Demoeratie Politieal Systemie
Culture in Semiperipheral Southem European Societies. New York: Meilen University Press.
- - - . 1996b. European Portugal: The Diffieult Road
to Sustainable Democraey. Basingstoke: Macmillan.
- - - . 1996c. "Portugal." In Juliet Lodge, ed., The
1994 Eleetions to the European Parliament, pp.
147-156. London: Pinter.
Syrett, Stephen. 1994. "Local Power and Economic Policy: Local Authority Economic Initiatives in Portugal." Regional Studies 28, no. 1, pp. 53-67.

-lose M. Magone

Preaccesslon Strategy
The European Council decided in principle in
Copenhagen in June 1993 to enlarge the EU. One
year later, at the Corfu summit, the European

391

Council invited the Comrnission "to make specific

proposals as soon as possible for the further irnplementation of the Europe Agreements [with the
Central and Eastern European countries] and the
decisions taken by the European Council in
Copenhagen." On the basis of this request, the
Comrnission produced several documents that became the basis for the preaccession strategy
adopted by the European Council in Essen in December 1994. The strategy has two main parts:
preparation for participation in the internal market
and structural relations. The former is based on a
white paper, Preparation of the Associated Countries of Central and Eastem Europe for Integration into the Internal Market of the Union,
adopted by the Comrnission on May 3, 1995. The
white paper lists the EU legislation that applicant
countries should try to adopt. Structural relations
means a program of meetings of environment,
transport, justice, foreign, and other ministers of
the EU and the associated states as weIl as annual
meetings of heads of state and government on the
margins of an EU sumrnit.
See also CENTRAL AND EASTERN EUROPEAN
STATES.

Preferentlal Trade
Agreements (PTAs)
Preferential Trade Agreements (PTAs) are the
least intense form of economic accord between
the EU and a nonmember state.
See also COMMON COMMERCIAL POLICY.

Prellmlnary Rullng Procedure

The preliminary ruling procedure (Article 177 of

the Treaty of Rome), a mechanism by means of
which individuals can ensure member state compliance with EC law, has radically transformed the
EU's legal system. The procedure works as follows: an individual argues before a national court
that anational law or policy conflicts with EC
law; if there is a question about the meaning of the
EC law, the national judge can make a "preliminary ruling reference" to the European Court of
Justice (ECJ) asking for an interpretation of the
EC law. The parties in the case are allowed to submit arguments to the ECJ, as are EU institutions
and national governments; the ECJ's advocate
general suggests to the Court what it should do,
based on an analysis of the arguments, EC case

392

Presidency

law, and the laws in question; the ECI issues its

decision, and the national judge applies the ECI
ruling to the case at hand. Alternatively, the national court can resolve the dispute on its own,
based on previous ECI jurisprudence.
A number of landmark ECI rulings in the
1960s transformed the prelirninary ruling system
into a powerful instrument of European integration.
Individuals raised legal questions that the Comrnission and member states never would have asked, allowing the ECI to expand the reach and scope of
EC law in the national realm. Because of national
court references to the ECI, national govemments
found their ability to keep national policy issues out
of the EC legal realm to be significantly dirninished. The prelirninary ruling system also made
ECI decisions enforceable, reducing a significant
political threat against the ECI: noncompliance.
National courts became key intermediaries in the
EC legal system and a significant source of political
leverage for the ECI against national govemments.
See also EUROPEAN COURT OF IUSTICE.

month period in office (usually in the closing

weeks). Apart from chairing meetings, the presidency's responsibilities include achieving consensus and brokering deals in the Council in order to
enact legislation; launching strategic policy initiatives; acting as an EU spokesperson; representing
the EU internationally; managing the Common
Foreign and Security Policy and Cooperation on
lustice and Horne Affairs; and coordinating member states' positions at international conferences
and negotiations in which the EU participates.
See also COUNCIL OF MINISTERS; EUROPEAN
COUNCIL; TABLE 1; TABLE 7; APPENDIX 7.

Presldency

The principle of proportionality refers to the scale

or effect of a proposed EU action and is usually invoked to curb the accumulation of additional authority at the EU level. Article 3b of the Treaty on
European Union, which defines subsidiarity, also
embraces proportionality by declaring that "any action of the Community shall not go beyond what is
necessary to achieve the objectives of the Treaty."
Similarly, Article K.3.2(b) stipulates that the Council may take joint action in the area of justice and
horne affairs "in so far as the objectives of the
Union can be attained better by joint action than by
Member States acting individually on account of
the scale or effects of the action envisaged."
See also SUBSIDIARITY.

There are a number of presidencies in the EU, notably the Council of Ministers and European
Council presidency, the Comrnission presidency,
the European Parliament presidency, and the European Court of lustice presidency. Of these, the
Council of Ministers and Comrnission presideneies are the most prominent and, arguably, the
most irnportant. However, the term EU presidency
or simply presidency usually refers to the Council
presidency.
The Council presidency rotates every six
months, although no longer in alphabetical order.
The 1998-2002 rota is as follows: the UK, first semester 1998; Austria, second semester 1998; Germany, first semester 1999; Finland, second semester 1999; Portugal, first semester 2000; France,
second semester 2000; Sweden, first semester
2001; Belgium, second semester 2001; Spain, first
semester 2002; Denmark, second semester 2002.
Italy, Ire1and, the Nethedands, and Luxembourg
held the presidency during the four six-month semesters of 1996 and 1997.
The country in the presidency chairs Council
and sub-Council (i.e., the Comrnittee of Permanent
Representatives, the Political Comrnittee, working
group, and special comrnittee) meetings and hosts
the European Council at least once during the six-

Presldency Conclusions
The presidency conclusions are the conclusions of
a Council meeting or European Council as drafted
by the country holding the rotating presidency.
See also COUNCIL OF MINISTERS; EUROPEAN
COUNCIL.

Proportlonallty

Protocol
A protocol is an addendum to a treaty, used either
to clarify or to qualify the treaty's contents, that is
legally binding (although only on those member
states that have agreed to the protocol). At the
Maastricht sumrnit in December 1991, member
states moved the social chapter, to which Britain
objected, into a Social Protocol of the Treaty on
European Union, which the other eleven signed.
Generally, member states use protocols to assuage
domestic opinion and/or score domestic political

Public Health Policy

points. The Amsterdam Treaty included thirteen

protocols, ranging from animal welfare (a cherished British concern) to the role of national parliaments in the EU.
See also AMSlERDAM TREATY; TREATY ON EuROPEAN UNION.

PTAs
See PREFERENTIAL TRAnE AGREEMENTS.

Publlc Health Pollcy

See HEALTH POLICY.

393

Q
QMV
See QUALIFIED MAlORITY VarING.

Quad
The Quad consists of meetings of EU, U.S.,
Japanese, and Canadian officials to discuss multilateral trade issues.

Quaestor
The office of quaestor is aleadership position in
the European Parliament, selected by the party
groups.
See also EUROPEAN PARLIAMENT; PARTY
GROUPS IN THE EUROPEAN PARLIAMENT.

Quallfled MaJority
Votlng (QMV)
Legislative decisions are taken in the Council of
Ministers by either unanimity or qualified majority
voting (QMV). QMV is a more efficient means of
decisionmaking, but can be politically costly for
sovereignty-conscious member states. French president Charles de Gaulle's efforts to block implementation of a treaty provision for the widespread
use of QMV was the root cause of the Empty Chair
Crisis in 1965 and 1966, after which unanimity remained the norm in Council decisionmaking. However, the difficulty of achieving unanimity brought
EC legislation almost to a halt and prompted member states to stipulate in the Single European Act

(1986) that QMV would be used for a majority of

decisions necessary to complete the single market
program. Subsequent treaty reforms confinned the
trend toward a more general use of QMY.
When QMV applies, the voting weights of
the member states are as follows: Germany,
France, Italy, and the UK have 10 votes each;
Spain, 8 votes; Belgium, Greece, the Netherlands, and Portugal, 5 votes each; Austria and
Sweden, 4 votes each; Denmark, Finland, and
Ireland, 3 votes each; and Luxembourg, 2 votes
(for a total of 87 votes). For legislative proposals
to be adopted by a qualified majority, there must
be at least 62 votes in favor (hence 26 votes constitute a blocking minority). Three other points
should be noted about QMV mIes. First, under
the Social Protocol of the Treaty on European
Union (TEU), which involved legislative decisions being made without British participation
between 1993 and 1997 (when Britain opted into
EU social policy), a qualified majority constituted 52 votes. Second, under the so-called Ioannina Compromise, to which the Council agreed
in 1994 to accommodate British and Spanish
concems about proposed changes to the size of
the blocking minority following EU enlargement, "if members of the Council representing a
total of 23 to 25 votes indicate their intention to
oppose the adoption by the Council of adecision
by a qualified majority, the Council will do all
within its power to reach, within a reasonable
time . . . a satisfactory solution that can be
adopted by at least 65 votes." Finally, efforts at
the 1996-1997 intergovemmental conference to
give the four larger member states (Britain,
France, Germany, and Italy) more clout became a
major sticking point at the Amsterdam summit
on June 16 and 17, 1997. In the event, the heads
of state and govemment maintained the status
quo, but in a legally binding protocol on enlargement, the Amsterdam Treaty links increasing the
number of votes for larger member states to
agreement by them to give up their second commissioner. The eventual reweighting of votes will
also entail a reca1culation of qualified majority
and the blocking minority.
See also DECISIONMAKING PROCEDURES; APPENDIX 2.

395

and from agreement to agreement. In some cases,

a popular referendum is necessary.

R
RACE
See

ADVANCED COMMUNICATIONS TECHNOLOGIES

FOR EUROPE.

RAPHAEL
RAPHAEL is an EU pro gram for the years
1996-2000 in the field of cultural heritage, covering architecture, archaeology, museums, collections, and archives. The program funds a large
number of conservation projects (with maximum
EU support of ECU 150,000, representing not
more than half the cost).

See also CULTURAL POLICY.

RAPID
RAPID is an EU database giving daily coverage
of EU activities as presented by the institutions
and their press releases. RAPID is run by the
spokesman's service ofthe Commission.

Rapporteur

A rapporteur is a member of the European Parliament (EP) responsible for drafting and presenting
areport to a parliamentary committee and later to
a plenary session of the EP. EP reports are generally known by their rapporteur's names.

Ratlflcatlon
Ratification is the process by which EU accession
treaties, treaty amendments, and other international agreements become law. Ratification procedures differ from member state to member state

See also INrERGOVERNMENTAL CONFERENCE.

Ratlflcatlon Crisis
The term ratification crisis refers to the political
crisis in the EC caused by the Danish electorate's
narrow rejection of the Treaty on European Union
(TEU) in a referendum in June 1992. The crisis
deepened when French voters approved the treaty
by the narrowest of margins in a referendum in
September 1992. At the Edinburgh summit in December 1992, the European Council agreed to a
number of Danish opt outs from the treaty, which
Danish voters endorsed in a second referendum in
May 1993, thereby ending the immediate crisis. In
a broader sense, however, the ratification crisis
was about the EU's political legitimacy and has
continued into the late 1990s.

See also

INTERGOVERNMENTAL CONFERENCE;

TREATY ON EUROPEAN UNION.

Reasoned Oplnlon
The Commission is responsible for ensuring that
member states fulfill their EU obligations and may
bring recalcitrant member states before the European Court of Justice (ECJ). First, however, the
Commission issues a formal "reasoned opinion" to
anational govemment outlining why it considers the
member state to be in violation of the treaty. The
Commission usually gives the member state two
months to comply, and most cases end at that stage.

See also

COMMISSION; EUROPEAN COURT OF

JUSTICE.

Recommendatlon
The Council of Ministers or the Commission may
issue non-legally binding recommendations to try
to influence the actions of member states.

Referenda
Referenda have become an integral and important
part of the European integration process. Whether
constitutionally mandated or politically inspired,
they have been used to decide whether or not to join
or stay in the ECIEU (Ireland, Denmark, and Norway in 1972; Britain in 1975; Greenland in 1982;
andAustria, Finland, Norway, and Sweden in 1994)

397

398

Reflection Group

Table 10 EU-Related Referenda

Country

Date

France

Apr. 23,1972
Sep.20,1992
June 5, 1975
Oct. 2,1972
Feb.27,1986
June 2,1992
May 18, 1993
May 10, 1972
May 26,1987
June 18, 1992
Sep.25,1972
Nov. 28, 1994
June 12, 1994
Oct. 16, 1994
Nov. 13, 1994
Feb.23,1982

UK
Denrnark

lreland
Norway
Austria
Fin1and
Sweden
Greenlandb

Question
En1arge Ec?a
RatifyTEU?
Stay in EC?
JoinEC?
Ratify SEA?
RatifyTEU?
RatifyTEU?
Join EC?
Ratify SEA?
RatifyTEU?
Join EC?
Join EU?
Join EU?
JoinEU?
JoinEU?
Leave EC?

% Turnout

%Yes

%No

60.0
70.0
64.6
89.9
74.8
82.9
71.4
70.9
44.1
57.0
79.2
89.0
81.0
74.0
82.0
85.0

61.0
51.05
67.2
63.5
56.2
49.3
56.7
83.0
69.9
69.0
46.5
47.2
66.6
52.9
52.3
74.9

32.0
48.95
32.8
36.5
43.8
50.7
43.3
17.0
30.1
31.0
53.5
52.8
33.4
47.1
47.7
26.1

a. 7% of tbe ballots were spoiled.

b. Green1and became a member of tbe EC as part of Denmark (see Table 6).

and to ratify major treaty revisions (Ireland and

Denmark with respect to the Single European Act
in 1986; Ireland, Denmark, and France with respect
to the Treaty on European Union [TEU] in 1992;
and Denmark again with respect to the TEU in
1993). During the 199Os, referenda have given voters an opportunity to express their growing disillusionment with European integration. Thus, it was
no coincidence that the 1992 Danish referendum
triggered the TEU ratification crisis and that the
later French referendum greatly exacerbated the situation. Yet, despite their obvious risks for political
elites, referenda have become a key instrument to
combat the EU's democratic deficit.
See TABLE 10; see also DEMOCRATIC DEFICIT;

report on December 5, 1995. Despite a large number of submissions from the member states and EU
institutions, the report contained few novel ideas
and reflected prevailing pessirnism about the IGC's
prospects. The IGC itself began under the Italian
presidency, in Turin, on March 29,1996, and ended
on June 16 and 17, 1997, at the Amsterdam summit, where the heads of state and government negotiated the final provisions of the Amsterdam Treaty.
See also AMSTERDAM TREATY; INrERGOVERNMENTAL CONFERENCE.

Refugee Pollcy
See JUSTICE AND HOME AFFAIRS.

LEGITIMACY.

Reflectlon Group
At its meeting in Corfu on June 24 and 25, 1994,
the European Council decided to form a reflection
group to prepare the ground for the 1996-1997 intergovernmental conference (IGC) and suggest possible treaty revisions. Chaired by Carlos Westendorp, Spain's secretary of state of EU affairs, the
reflection group consisted of foreign ministers' personal representatives, a commissioner (Marcelino
Oreja), and two members of the European Parliament (Elmar Brok and Elisabeth Guigou). The reflection group started its work with a symbolic
meeting on June 2, 1995, in Messina, where forty
years earlier foreign ministers had met to relaunch
the European integration project, and submitted its

Regional Pollcy
EU regional policy seeks to reduce spatial disparities, regenerate old industrial areas, and assist
rural development. The European Regional Development Fund (ERDF) is the main instrument for
carrying out regional policy. Regional policy and
the ERDF are part of the EU's structural policy
(the means by which the EU promotes social and
economic cohesion).
See also COHESION POLICY.

Regulation
A regulation is an EU legislative instrument laying down mIes and guidelines applicable in their
entirety to all member states.

Regulatory Policy

Regulatory Pollcy
The fJrst European regulatory measure-a directive on "the approximation of the rules of the
Member States conceming the coloring matters
authorized for use in foodstuffs intended for human consumption"-was adopted by the Council
of Ministers on October 23, 1962. The enormous
quantitative and qualitative growth of EC regulations during the following three decades represents a major theoretical puzzle for the student of
European integration. In fact, aside from competition rules and other measures necessary for the integration of national markets, few regulatory polieies of a positive character are explicitly
mentioned in the Treaty of Rome. Environmental
protection, for example, is not mentioned there,
and occupational safety and health was identifJed
as an area in which the Comrnission should only
promote elose cooperation among the member
states. Environmental policy provides a striking illustration of the stupendous growth of European
regulations . Between 1967 and 1987, when the
Single European Act (SEA) fmally recognized the
competence of the EC to legislate in this area, well
over one hundred directives and regulations were
introduced by the Comrnission and approved by
the Council. (Directives are addressed only to
member states and are binding only as to the result
to be achieved; regulations lay down general mIes
that are binding in their entirety both at the European and at the national levels.) Today European
environmental regulation ineludes more than two
hundred pieces of legislation, and in many member states the corpus of environmental law of EC
origin outweighs that of purely domestic origin.
Aggregate statistics convey the same impression of an almost exponential growth of the number of directives and regulations produced by the
Brussels authorities, on average, each year. Thus,
by 1970 the average was 25 directives and 600
regulations per year; by 1975 this fJgure had risen
to 50 and 1,000, respective1y; then between 1985
and the early 1990s, the EC produced 80 directives and about 1,500 regulations per year. To
compare: in 1991, the European authorities issued
1,564 directives and regulations as against 1,417
pieces of legislation (laws, ordinances, decrees)
issued by the French authorities, so that by now
the EU introduces into the corpus of French law
more rules than the national authorities themselves. Moreover, it is estimated that only 20 to 25
percent of the legal texts applicable in France are

399

now produced by the govemment without any previous consultation in Bmssels (Conseil d'Etat,
1993). An analogous situation prevails in all the
other member states.
Reporting such statistics, the French Conseil
d'Etat speaks of "normative drift" and "luxuriating legislation," doubting that any govemment
could have foreseen, let alone wished, such a deve1opment. It also points out, however, that the
same member states that deplore the "regulatory
fury" of the Brussels authorities are among the
major causes of regulatory growth with their demands for European interventions in the most varied areas of economic and social regulation. This
schizophrenie attitude of the national govemments
is only apart of the puzzle to be explained.
Equally surprising, especially from an intergovemmentalist perspective, is the fact that the
growth of European regulations has been not only
quantitative but also qualitative. Since the SEA introduced qualifJed majority voting for a number of
important policy areas, European mIes have often
been more advanced than those of all or most
member states. Among the best-known examples
of such "upgrading" are the 1989 directive regulating exhaust emissions for small cars (Jacobs,
Corbett, and Shackleton, 1995); a group of important health and safety at work directives approved
in 1989 and 1990 (Eichener, 1992; Majone, 1993);
Directive 89/48 that creates, for the fJrst time in
Europe, a single market for the regulated professions; Directive 92/54 on general product safety;
and several recent directives in the fJeld of
telecommunications. Indeed, a good deal of the
regulatory effort of the Commission in the last
years has been aimed at promoting competition
and technological innovation in this strategie fJeld.
The most important telecommunications directives follow from the 1987 green paper on the development of the common market for telecommunications services and equipment. This highly
innovative document marked a tuming point in
European telecommunications policy, providing
the fust road map toward a competitive market in
an area traditionally dominated by national monopolies.
The widening and deepening of regulatory
policymaking in those areas is all the more remarkable when compared with other policy areas
(such as transport, energy, and social policy) that
have remained largely undeveloped, even though
they appear in the founding treaties. This highly

400

Regulatory Policy

se1ective expansion of EU competences suggests

that the structural characteristics of different policy fields should receive more attention than has
been given to them so far. For our purposes it is
sufficient to distinguish between regulatory policies and policies that require the direct expenditure of public funds. The distinction is important
because budgetary constraints have only a limited
impact on policymaking: the real costs of regulations are borne not by the agencies but by the individuals, firrns, or governments that have to comply with the regulations. On the other hand, the
size of nomegulatory direct-expenditure programs
is determined by budgetary appropriations and, ultimately, by the level of tax revenues. This structural distinction is even more significant at the European than at the national level, since not only
the economic but also the political and administrative costs of implementing European rules are
borne, direcdy or indirecdy, by the national governments.
A second factor to be kept in mind is the
small size of the EU budget. Despite a significant
growth in recent years, this budget represents only
2.4 percent of all the public sector spending of the
member states and less than 1.3 percent of the
gross domestic product of the EU. Moreover, almost 70 percent of total appropriations consists of
compulsory expenditures for the Common Agricultural Policy and other redistributive programs.
What remains is not enough to support large-scale
initiatives in such politically appealing fields as
industrial policy, research and development, or infrastructural policy. Given such constraints, the
best strategy for the Commission to use to increase its influence was to expand the scope of its
regulatory activities: regulatory policymaking puts
a good deal of power in the hands of the Brussels
authorities while circumventing the tight budgetary constraints imposed by the member states.
However, given that the Commission proposes but the Council disposes, why were the
member states, always so keen to preserve their
sovereignty, willing to delegate such extensive
regulatory powers to the Commission? In many
cases, such delegation was neither envisaged by
the founding treaties nor stricdy necessary for the
proper functioning of the common market. To answer this question we must consider another characteristic of regulatory policymaking. Regulation
consists of applying the general principles stated
in a formal document (a statute or an international

convention) to particular, and often rapidly changing, circumstances, and this entails a good deal of
discretion in implementing the principles. Without
supranational control, regulatory discretion can
easily be abused by national governments in order
to protect domestic interests. But when it is difficult to observe whether governments are making
an honest effort to enforce a regulatory agreement,
that agreement is not credible. Hence the delegation of regulatory powers to a supranational authority such as the Commission is best understood
as a means whereby the member states commit
themselves to regulatory strategies that would not
be credible in the absence of such delegation (Gatsios and Seabright, 1989; Majone, 1996).
Looking at the question from another angle,
the way those powers are used to achieve ambitious regulatory objectives can be explained in
terms of the policy entrepreneurship of the Commission (Majone, 1996). For about two decades
the Commission has used its regulatory powers
mainly to harmonize nationallaws, regulations,
and standards by means of directives. However,
despite considerable progress, by the early 1980s
it became clear that the attempt to harmonize a
continuously expanding body of national rules
was bound to faiI. To overcome the limitations of
the old approach based exclusively on harmonization, the 1985 white paper on the completion of
the internal market introduced a new strategy with
the following elements: mutual recognition of national regulations and standards, restriction of harmonization at the European level to laying down
essential health and safety requirements binding
on all member states, and the gradual replacement
of national product specifications by European
norms. In essence, the white paper proposed a
conceptual distinction between matters in which
harmonization is essential and those in which it is
sufficient that there be mutual recognition of the
equivalence of various requirements laid down under national law. Notice that although mutual
recognition does not involve the transfer of regulatory powers to the European level, except for the
regulation of essential requirements, it nevertheless restricts the freedom of action of national
governments, which after the Cassis de Dijon
judgment can no longer prevent the marketing
within their borders of a product lawfully manufactured and marketed in another member state.
In many policy areas the combination of mutual recognition and strict regulation of essential

Regulatory Policy

safety requirements has proved quite effective not

only in speeding up the EC regulatory process but
also in improving the quality of national regulations. A good example is Directive 89/48, already
mentioned, on the mutual recognition of professional degrees and diplomas. Unlike the older directives in this area, the new directive does not attempt to harmonize the length and subject matters
of professional education or even the range of activities in which professionals can engage. Instead, it specifies the methods by which the member states can compensate for such differences.
The way the methods are applied by national authorities may be appealed in the courts of the host
country. This directive not only lays the foundation of a European market for the regulated professions but also creates incentives for raising the
level of professional education throughout the EU.
This is because the citizens of a country that does
not adequately regulate a certain profession are at
a competitive dis advantage if they wish to use
their professionals skills beyond the national borders . In fact, some countries have already taken
actions to improve the quality of professional education in such areas as dentistry and nursing (see,
for example, Zilioli, 1989).
Other important applications of the new strategy are in the area of banking and financial services and of telecommunications. Thus, the current approach to banking regulation is based on
four principles: harmonization of essential standards for prudential supervision, mutual recognition of the way in which each member state applies those standards, horne country control and
supervision of financial institutions operating in
other member states, and a single license for credit
institutions granted by the horne country and valid
throughout the EU. The essential (harmonized) requirements necessary and sufficient to achieve
mutual recognition of authorizations and supervisory schemes are spelled out by the important
Second Banking Coordination Directive 89/646
and by two narrower directives about own funds
and solvency ratios (Directives 89/299 and
89/647, respectively). A sirnilar regulatory philosophy inspires the two directives on life and nonlife
insurance approved in 1992 and Directive 93/22
on investment services. The basic idea is that any
supplier of financial services legally established in
one member state may pursue his or her professional activity in allother member states, provided
he or she follows EU rules and those of the horne

401

country. Harmonization of telecommunications

standards is achieved by the Common Technical
Regulations (CTRs), which are mandatory norms
to be developed by the European Telecommunications Standards Institute (ETSI). Again, terminal
equipment satisfying the CTRs can circulate
freely throughout the EU on the basis of the mutual recognition of type approval gran ted by a
member state.
As these examples show, the new strategy has
been successfully applied in a number of important policy areas, but there have been cases in
which the member states themselves have rejected
mutual recognition in favor of centralized solutions. This attitude shows that the credibility problem, which arguably is the reason for the delegation of extensive regulatory powers to the
European level, still persists. An illurninating example is provided by the regulation of new medical drugs. By the 1970s the Comrnission had attempted to introduce mutual recognition of
toxicological and clinical trials conducted according to standardized EC procedures. Under the socalled multistate drug application procedure
(MSAP), a company that had received a marketing
authorization from a national regulation could ask
for the recognition of that approval by at least five
other member states. However, the procedure did
not work well, even in the simplified form introduced in 1983: actual decision times were much
longer than those prescribed by the relevant directives, largely because national regulators continued to raise objections against each other almost
routinely (Kaufer, 1990). Finally, the Commission, strongly supported by the European pharmaceutical industry, proposed a centralized approval
procedure, which would be compulsory for all
new high-technology products, and the establishment of a European Agency for the Evaluation of
Medicinal Products to conduct the necessary tests.
Both proposals were accepted by all member
states in 1993.
An analogous development may take place
in telecommunications. Support for a European
Telecommunications Agency grew among political and industrial leaders in Europe because it
was feIt that the supervisory machinery available
was insufficient to guarantee that the new EU regulations in this important field were being implemented in good faith by all the national authorities. The task of the new agency would be less to
implement directly European telecommunica-

402

Regulatory Policy

tions law than to monitor the implementation of

this law by the national regulators (Ehlermann,
1995).
Thus, the current situation is characterized by
conflicting tendencies. On the one hand, the principles of subsidiarity and mutual recognition are
beginning to produce effects in terms of more decentralized decisionmaking and regulatory competition among the member states. On the other
hand, basic prudential and safety requirements
continue to be strictly regulated at the European
level, and there is a growing demand for more effective supervision, either by the Commission or
by independent European agencies, of the implementation of European mIes by national authorities. We have also seen that in some cases the
member states have expressed a preference for
centralized regulations in order to avoid the risks
and delays inherent in mutual recognition. A variety of equilibrium solutions could in theory
emerge from such a situation, but there are indications that the most likely solution will take the
form of transnational networks inc1uding both European and national regulators. Such a structure is
already taking shape in the field of competition
policy regulation. The Commission's directorategeneral for competition (DG IV) recently initiated
a decentralization project with the long-term goal
of having one competition statute applied throughout the EU by a network of national competition
authorities, national courts, and DG IV itself. Direet links already exist between Commission inspectors and national regulators as regards any investigation carried out by DG IV. Moreover, a
high level of harmonization of national competition laws has already occurred spontaneously, and
national competition authorities are becoming
more professional and increasingly jealous of
their independence.
Professionalization and independence are indeed essential to the viability of the network
model. Professionals are oriented by goals, standards of conduct, and cognitive beliefs that derive
from their professional community, giving them
strong reasons for maintaining their reputation in
the eyes of fellow professionals and for resisting
interference and directions from political outsiders. Political independence is important because basic ideological differences concerning,
for example, the role of competition princip1es in
economic policy are likely to persist between the
member states. Such differences are much less

pronounced among competition regulators from

different countries, just as the commitment to
price stability tends to be stronger among different
central bankers than among politicians from the
same country. Similar, if less advanced, developments can be observed in other regulatory areas. A
related example is the emerging pattern of coordinated partnership between the Statistical Office of
the European Communities (EUROSTAT), and
the national statistical offices of the member states
(McLennan, 1995). There is no reason why, given
the right conditions, the network model could not
be extended to all areas of economic and social
regulation and indeed to all administrative activities where mutual trust and reputation are the key
to greater effectiveness.
See also COMMON MARKET; COMPETITION
POLICY; ENERGY POLICY; ENVIRONMENTAL POLICY;
IMPLEMENTATION;

SINGLE MARKET PROGRAM;

STANDARDS AND CONFORMITY ASSESSMENT.

Bibliography
Conseil d'Etat. 1993. Rapport 1992. Paris: Documentation Fran~aise.
Ehlermann, Claus Dieter. 1995. "Harmonization Versus
Competition Between Rules." European Review 3,
no.4,pp.333-342.
Eichener, Volker. 1992. Social Dumping or Innovative
Regulation? Process and Outcomes of European Decision-Making in the Sector of Health and Safety at
Work Harmonization. EUI Working Paper, SPS
92/28. Florence: European University Institute.
Gatsios, Kristos, and Paul Seabright. 1989. "Regulation
in the European Community." Oxford Review of
Economic Policy 5, no. 2, pp. 37-60.
Jacobs, Francis, Richard Corbett, and Michael Shackleton. 1995. The European Parliament. 3d ed. London:
Cartermill International.
Kaufer, Erich. 1990. "The Regulation of New Product
Development in the Drug Industry." In Giandomenico Majone, ed., Deregulation or Re-regulation? Regulatory Reform in Europe and the United
States. London: Pinter.
McLennan, Williarn. 1995. "Working Together as Partners in European Statistics." In Mario Crescenzi, ed.,
European Statistics in Perspective. Rome: ISTAT.
Majone, Giandomenico. 1993. 'The European Community Between Social Policy and Social Regulation."
Journal ofCommon Market Studies 31, no. 2.
- - - . 1996. Regulating Europe. London: Routledge.
Zilioli, Chiara. 1989. "The Recognition of Diplomas
and Its Impact on Education Policies." In Bruno de
Witte, ed., European Community Law of Education.
Baden-Baden: Nomos.

-Giandomenico Majone

Research and Technological Development (RTD) Policy

Report on European
Institutions

See 'fHREE WrSE MEN.

Research and Technologlcal

Development (RTD) Pollcy
One of the great paradoxes of the EU is that, despite its internationally acknowledged scientific
excellence, it launches fewer new products, services, and processes than its main competitors in
the global economy. In other words, the EU is innovating less-and less weIl-at a time when innovation is becoming a driving force in economic
competitiveness. This state of affairs, which is the
result of a number of structural obstacles (a complex legal and regulatory environment; insufficient
investment; excessive separation between research, industry, and training; and so on), is a serious handicap to European business and society,
not least because of its impact on employment.
A recent Comrnission green paper identified
numerous obstac1es to innovation and included
about 130 concrete proposals to stimulate innovation in Europe and hence improve the competitiveness of European industry. Intended to provoke wide-ranging debate within member states,
the green paper is part of the Commission's
preparatory work for the next framework program
for research and technological development
(RTD) policy in the EU.
Framework prograrns are the main instrument
of RTD policy. In accordance with Article 189b of
the Treaty on European Union (TEU), the framework program is now adopted by the European
Parliament (EP) and the Council of Ministers using the co-decision procedure, whereas decisions
on specific research prograrns (under the auspices
of the framework prograrn) are taken according to
the simple consultation procedure (Artic1e
130i[4]). The TEU further stressed that the "Community shall have the objective of strengthening
the scientific and technological bases of Community industry and encouraging it to become more
competitive at international level" and that "the
Community and the Member States shall coordinate their .. . activities so as to ensure that national
policies and Community policy are mutuaIly consistent."
These provisions of the TEU built on the legal basis in the original treaties for action in the
field of RTD: Article 55 of the European Coal and

403

Steel Community treaty (research in the coal and

steel sector); Artic1es 4-11 of the European
Atomic Energy Community treaty (nuc1ear research); and Articles 41 (agriculture) and 235
(other areas, in particular nonnuclear energy and
general research policy) of the European Economic Community treaty. Subsequent legal bases
for the conduct of RTD policy include a Council
resolution of January 14, 1974, on the coordination of national policies and the definition of projects of interest to the Community in the fields of
science and technology; provisions of the Single
European Act (SEA), which gave the Community
a new and explicit basis for RTD policy; and a
large body of secondary legislation.
Since the SEA, which came into force in
1987, the Community's main objective with respect to RTD has been the development of a common policy in important areas such as new technologies, energy, the environment, and raw
materials. National policies or research activities
at the Community level should be coordinated
with seven goals. The first is to eliminate unwarranted duplication of effort in national prograrns
(this would entail improved dissemination of results among, in particular, small and mediumsized enterprises, which would be an advantageous cost-benefit factor, and the coordination of
national programs). The second goal is to improve the efficiency, or reduce the cost, of national and Community projects by sharing tasks
or, possibly, by pooling resources, and the third is
gradually to harmonize procedures for the formulation and implementation of Community research policy. Promoting the creation of a single
market (through the formulation of uniform specifications and standards) and thereby helping to
overcome scientific and technical barriers in Europe is the fourth goal. The fifth goal is to promote suitable research projects concerning transfrontier problems (e.g., the environment and
public health), and the sixth is to reduce the worrisome gap that exists between the research potential and specific results achieved by member
states. The seventh goal, to be achieved by means
of a common research strategy with increased
funding, is to maintain or restore Europe's international competitiveness with the United States
and Japan, thereby helping to reduce unemployment in the Community through innovations and
new technologies. This objective complements
the research cooperation initiative known as EU-

404

Research and Technological Development (RTD) Policy

REKA, launched in 1985 and involving numerous

third countries (although the Commission participates in EUREKA activities, EUREKA is not itself a Community project).
Present State of RTD Policy

On April 26, 1994, the Council and the EP

adopted the EC's fourth framework program for
research and technological development and
demonstration (1994-1998) and the European
Atomic Energy Community (EURATOM) framework program for research and training. The initial budgets allocated to these two framework programs were approximately ECU 11 billion and
ECU 1.3 billion, respectively, totaling ECU 12.3
billion for both.
On March 25, 1996, the Council and the EP
adopted adecision (No. 616/96/EC) modifying
the budget on account of the accession of Austria,
Sweden, and Finland to the EU. As a result, the
maximum overall amount of the fourth framework
program now stands at ECU 11.8 billion and for
the EURATOM framework program at about ECU
1.4 billion. This brings the overall maximum budget for both programs to about ECU 13.1 billion.
The modification of the financial amount
does not alter the technical and scientific objectives, priorities, or activities in the various areas of
the specific programs. The additional funds will
be allocated in a linear fashion across the program's four themes: research, technological, and
demonstration projects; cooperation with third
countries and international organizations; dissemination and optimization ofresults; and stimulation
of training and mobilization of workers.
However, the significance and importance of
the common research policy should not be assessed sole1y or even primarily in the light of budgetary resources. Equally important, the review at
the Community level of national and common research policies, which is carried out every two
years, has in itself led to notable progress regarding the formulation and coordination of national
policies.
The RTD framework program is to be implemented by means of specific pro grams in each
area of activity. Distinctions must be drawn, depending on who finances and carries out the project, between the following types of RTD projects:
(1) direct projects, carried out by the Joint Research Centers (JRCs)-of which there are four,
located in Ispra, Italy; Geel, Belgium; Petten, the

Netherlands; and Karlsruhe, Germany-and entirely financed by the EU; (2) indirect projects,
carried out by groups of research workers, laboratories, and universities of the member states, and
partly financed by the EU; and (3) concerted projects, also carried out by groups ofresearch workers, laboratories, and universities of the member
states but not financed by the EU (except for coordination).
The EP has repeatedly stressed that the RTD
framework program budget is still far too small to
meet the challenges of the 1990s, notably improving Europe's competitiveness especially vis-a-vis
the United States and Japan. This restricted funding is particularly regrettable since there is a danger that the individual RTD projects will be inadequate1y funded and that the necessary "critical
mass" will not be reached. At the same time, most
of the projects contained in the framework program are regarded as indispensable to ensure that
Europe is not outstripped, by the United States and
Japan in particular, in the field of international
technological innovation. Only in this way can Europe's international competitiveness-its most important guarantee of independence, prosperity, and
employment-be secured in the medium term.
Outlook

The adoption of the framework pro gram and of

important sectoral research programs represents a
significant step toward the strategic reorientation
of EU research policy. Whereas previously the energy sector was undoubtedly the focus of EU research, the EU's efforts are now directed more toward industrial competitiveness in order to enable
the EU to keep pace with the United States, Japan,
and the newly industrialized countries and to improve the employment situation by encouraging
innovation. The EUREKA initiative will also provide additional impetus for research cooperation
in Europe. However, as the EP has been constantly
stressing in recent times, it is essential to step up
RTD efforts at the EU level, since only in this way
can Europe's place in the field of technological innovation be assured and the necessary conditions
created to safeguard Europe's political and economic independence and its social and cultural
identity. The EU is making a greater effort to assist economic transformation in the countries of
Central and Eastern Europe, not least by enabling
their partial participation in Community RTD programs.

Romania

Also, under the TEU, consideration is being

given to establishing an industrial policy (Title
XIII, Article 130) through a closely coordinated
RTD policy (Articles 130a-130e, Title XV, and Articles 13Of-13Op in particular). In addition, detailed
discussions are taking place on the revision of RTD
policy to develop a fifth framework prograrn.
Apart from the challenge of supporting scientific and technological development with substantial funding, EU framework programs also face a
radically changed social and cultural environment,
generally known as the postindustrial society. The
driving force behind the ever-quickening change
is, of course, a combination of information and
communication technology. Europe is having
greater difficulty than the new industrialized countries, or even than the United States, coping with
this new networked world and global social structure. The Asian era (as the twenty-first century is
often characterized) is the outcome not only of
Asia's growing demographic weight but also of its
ability to accept a new technological culture; indeed, to make new technology a trademark of its
culture. This being so, Europe must itself make an
effort if it is not to become merely an ob server of
its own decline. Science, technology, culture, and
social policy must be perceived as a whole. Europe must accept change as achalienge if it is still
to have a chance to shape the transition to a
postindustrial society. It is therefore important for
socioeconomic issues as weIl as cultural and ethical questions to be discussed in the context of research policy. Europe needs something like a Europe-wide debate on technology, involving all
interested parties. European civilization of the
twenty-first century can emerge only from a critical analysis of what appears to be a largely selfperpetuating technological revolution. Thus, it is
of considerable strategic importance that the Commission fully use the resources at its disposal for
socioeconomic development. In particular, a possible European technology assessment network,
which makes such a public dialogue possible,
must at last be put forward.
See also lNDuSTRlAL POLICY.

-Peter Palinkas

Research Framework Program

See

FRAMEWORK PROGRAM FOR RESEARCH AND

TECHNOLOGICAL DEVELOPMENT.

405

Rey, Jean (1902-1983)

In July 1967 Jean Rey, a Belgian politician, became the first president of the combined Comrnission of the European Communities (following implementation of the merger treaty uniting the
Communities' institutions). During his years as
Commission president (1967-1970), the EC
slowly recovered from the shock of the Empty
Chair Crisis (1965 and 1966) and, after Charles de
Gaulle's resignation as president of France in
1969, prepared for its first enlargement. Yet Rey
was unable to raise the Comrnission's self-confidence or improve its fortunes. Indeed, his presidency was the first in aseries of undistinguished
Comrnission presidencies that ended more than a
decade later, when Commission president Roy
Jenkins began to assert his authority.
See also COMMISSION.

Right of Establishment
Right of establishment refers to the right of businesspeople, under Articles 52-58 of the Rome
Treaty, to set up operations in other member
states. However, until completion of the single
market program, national regulation of industry
and commerce was a considerable obstacle to the
right of establishment.
See also SINGLE MARKET PROGRAM.

Rio Group
Since a dialogue was institutionalized by the
Rome Declaration of December 1990, the EU and
the Rio Group (Argentina, Bolivia, Brazil, Chile,
Colombia, Ecuador, Mexico, Panama, Paraguay,
Peru, Uruguay, and Venezuela) have held annual
ministerial meetings, which ob servers from Central America and the Caribbean also attend. Discussions cover political and economic issues,
ranging from human rights and political pluralism
to market access and investment opportunities.
See also LATIN AMERICA.

Romania
Until the end of the Cold War, the EC had had a
longer and deeper relationship with Romania than
with any other Soviet-bloc country (with the exception of East Germany, which for obvious reasons was a special case). This was due to Romania's supposedly "independent" foreign policy,

406

Royaumont Process

although domestically Romania under Nicolai

Ceauescu was a hard-line Stalinist state. The EC
began to upgrade its relations with Romania by
opening talks in April 1987 for a trade and economic co operation agreement, but negotiations
were suspended in July 1989 because of
Ceauescu's repression. Following the revolution
and Ceauescu's execution in December 1989, the
EU resumed relations with Romania, culrninating
in the signing of a Europe (association) Agreement on February 1, 1993, which entered into
force two years later for an unlirnited period. The
agreement provided for free trade and was a forerunner of possible accession. Romania also received Pologne et Hongrie: Actions pour la Reconversion Econornique (PHARE) assistance.
However, Romania's pace of econornic liberalization and political reform has been slow. Economically, Romania has reoriented its foreign
trade toward the West, with exports to and imports
from the EU now accounting for over 55 percent
of the total. But in other areas of econornic reform
and restructuring, Romania lags far behind the socalled fast-track transition countries in Central
and Eastern Europe (notably the Czech Republic,
Hungary, and Poland). Agriculture still contributes
a higher proportion of GDP (20 percent) and employs a larger proportion of the workforce (35 percent) than in any of the other former Soviet sate1lites. Most ominous of all, privatization is
proceeding extremely slowly in Romania (the private sector share of GDP is estimated at less than
50 percent, well below that in neighboring countries). Politically, democracy in Romania is fragile. In retrospect, the 1989 revolution looks more
like a palace revolution than a radical change of
regime. Authoritarianism and intolerance pervade
the political establishment.
As a result of Romania's econornic and political problems, EU membership seems unlikely in
the near future, despite strong French support for
Romania's immediate accession. Yet Romania's
relegation to a second tier of Central and Eastern
European states with respect to EU and NATO
membership could exacerbate the country's regression. The challenge for the EU is to nudge Romania toward meaningful and lasting reform
while keeping the door open to membership in the
not too distant future.
See also CENTRAL AND EASTERN EUROPEAN
STATES.

Royaumont Process

The Royaumont process to promote stability and

good neighborliness in southeast Europe was
launched by the EU, Russia, the United States,
and southeast European states at a conference in
Royaumont, France, on December 12, 1995, to
complement the Dayton Accords for peace in the
former Yugoslavia. The Royaumont dec1aration
calls for the process to be put in the hands of the
Organization for Security and Cooperation in Europe, as was the earlier, sirnilar Stability Pact for
Europe (Balladur Plan) for Central and Eastern
Europe as a whole.
See also YUGOSLAVIA.

Russla
The main lines of EU policy toward Russia since
the start of 1992 have dovetailed very c10sely with
those of the United States. The larger member
states of the EU have, indeed, coordinated their
Russian policies mainly through other forums
rather than within the EU itself: notably within the
Group of Seven industrialized countries (G7),
NATO, and the International Monetary Fund
(IMF) as well as through bilateral discussions
with each other and with the United States. Issues
that rnight seriously divide the Western alliance,
such as how to respond to a conflict between Russia and Ukraine, would tend to divide the EU also.
The principal stated goals of the EU's Russian policy have been summarized in the Comrnission's report of May 1995, The European Union
and Russia: The Future Relationship (Comrnission, 1995), and the Council's Strategy on EURussia Relations, published in November 1995.
The EU's main emphasis has been to assist internal changes within Russia: in particular, a combination of strengthening internal stability and promoting the development and consolidation of
human rights, democracy, and a capitalist market.
These goals have been presented as largely congruent with each other and have been interpreted
as requiring support for the govemment of President Ye1tsin in its efforts to transform the political
and econornic system within the country.
To encourage these internal changes, the EU
has used the diplomacy of conditionality: steps to
draw Russia into the political, econornic, and security structures of the West have been made conditional upon progress toward the internal changes

Russia
championed by the Western powers. The EU has
possessed four main instruments for pursuing this
approach: its capacity to give symbolic support to
the Ye1tsin govemment within Russia; its great importance as a market and as a source of capital; its
aid instruments, especially the Technical Assistance
for the Commonwealth of Independent States
(TACIS) program; and its ability to exert influence
on the Russian govemment's behalf in other international institutions and with the United States.
Within this general policy framework the EU
nevertheless has had distinct concerns, both political and economic. Russia's foreign policy, notably
toward Central and Eastern Europe, is a matter of
direct and major importance for the member states
of the EU (especially Germany). Maintaining
good relations with Moscow while integrating the
Visegrad states (Po land, Hungary, the Czech Republic, and Slovakia) into Western institutions has
therefore been an important aim of the EU, and of
Germany in particular.
The EU and its member states also have important economic interests at stake in their relations with Russia. Russia is a far more important
source of supplies for the EU-notably energy
and especially gas as weil as minerals and raw
materials-than for the United States or Japan.
Russia also could become a very important market
for EU goods and investment. In the energy sec tor
the EU has aUempted to playa leading role in efforts to establish a new international regime, via
its initiative for a European Energy Charter.
Political Relations 5ince
the Gorbachev Period
When the Soviet Union broke up at the end of
1991, President Mikhail Gorbachev left a legacy
of links between the USSR and the EC. One of
Gorbachev's first acts as general secretary had
been to indicate to the Italian presidency of the
European Council in the spring of 1985 that he
wished to place relations with the EC on a new basis. In the summer of 1988 a breakthrough came
with a joint declaration of mutual recognition between the EC and the Soviet-dominated Council
for Mutual Economic Assistance (CMEA). In
February 1989 formal discussions between the
USSR and the EC began within the framework of
European Political Cooperation (EPC), the member states' foreign policy coordinating mechanism. In the hectic circumstances of East Ger-

407

many's terminal crisis in December 1989, the

USSR and the EC signed a Trade and Cooperation
Agreement (TCA). A separate agreement on trade
in textiles was also initialed between the two parties at the same time (Official Journal, 1990).
The following year France and Germany
gained support within the European Council for
the Commission to bring forward proposals for a
more far reaching agreement, envisaging a future
free trade regime between the USSR and the EC.
The EC also sought, without success, to encourage the United States and Japan to take positive
steps over Soviet membership of the GATT. But
these plans and other initiatives from the Dublin
summit in June 1990 and the Rome summit in December 1990 were stalled by EC reluctance to
move significantly out of step with U.S. policy toward the Soviet Union and then by the crisis leading to the Soviet Union's disintegration in 1991.
The Commission responded to the collapse of
the USSR by offering, in January 1992, to negotiate new cooperation treaties with the former Soviet republics. Meanwhile the terms of the 1989
TCA were extended to the new republics, including the Russian Federation, individually through
an exchange of letters in 1993.
In 1991, the EC had already approved an aid
program for the USSR before the latter's collapse,
and at the start of 1992 this program came on
stream for Russia and then for other members of
the Commonwealth of Independent States (CIS)
under the acronym of TACIS. TACIS has continued up to the present as agrant pro gram for assisting the domestic transformation of the Russian
economy and polity. Between 1991 and 1995
ECU 2.268 billion was granted for over 2,200
TACIS projects, more than half of which involved
Russia. In July 1996 a further ECU 2.224 billion
was approved by the Council for the CIS and
Mongolia from 1996 to the end of 1999. This aid
program is tied to EU conditionality, enabling the
EU to suspend assistance at any moment in case
of a violation of a key component of cooperation,
especially on democracy and human rights.
Since 1992, the EU has envisioned the continent as organized upon two pillars: the EU in the
West and the Russian Federation in the East. This
view, first articulated by Commission president
Jacques Delors during his visit to Moscow in
1993, has often been repeated. For example, in its
May 1995 report on Russia the Commission de-

408

Russia

elared that the time had come for the EU and Russia to recognize "their historical vocation as the
two principal European powers and, in the common interest, [seek] to develop the elose and mutually enriching partnership which will reflect
their political, social and economic significance"
(Commission, 1995).
This vision, of course, omits the role of the
United States as a European power and evades
both the weakness of the EU in the military-security field and the importance of the security dimension in EU-Russian relations. In reality, the
United States continues to lead the EU's member
states in the main lines of their security and political policies toward Russia, doing so in elose consultation with Germany and other NATO members. And even in the field of economic relations
with Russia and the other former Soviet republics,
the EU has foIlowed the judgments of the IMF in
deciding the pace of normalizing relations.
But the two-power concept indicates two core
ideas in the EU's Russian policy: first, that Russia's destiny is not to become a member of the EU,
but to remain separate; second, an implicit acceptance of Russia's special role and status within the
CIS. The EU has so far rejected the idea that other
CIS republics such as Ukraine or Belarus could
eventually become EU members and has thus implicitly envisaged them as associating themselves
with the Russian Federation. Of the former Soviet
republics, only the Baltic states have been offered
the prospect of EU membership.
These concepts have been expressed through
the distinction between treaties of association
(known as Europe Agreements), which the EU has
offered to former Soviet-bloc countries that may
at some future date accede to the EU (the Baltic
states), and Partnership and Cooperation Agreements (PCAs) for Russia and other CIS republics.
The distinction between association agreements
for Central and Eastern European countries and
PCAs for the newly independent states (ineluding
Russia) has more to do with political realities and
choices than with economics.
The Council of Ministers agreed on a negotiating mandate for the PCAs in July 1992, and the
Commission was authorized to open negotiations in
October of that year. During the negotiations for a
PCA in April 1993 the Russian government persuaded the EU to modify its initial negotiating position by ineluding the prospect of moving toward a
free trade regime by the end of the 1990s (Commis-

sion, 1993a, 1993b). This gives Russia an incentive

to develop its political and economic relationship
with the EU. Agreement on moving toward a free
trade regime would depend both on Russia's acceptance of World Trade Organization (WTO) obligations and on political considerations. In November
1993 the Russian government won a further concession: a stipulation in the PCA that 1998 would
be a deadline for an EU decision on establishing a
free trade regime (Commission, 1993c).
The PCA with Russia was signed at the Corfu
summit in June 1994 (Commission, 1994). It is a
mixed agreement involving not only EU institutions but also the EU member states. Accordingly,
it requires ratification by aIl the individual governments of the EU as weIl as by the European Parliament (EP) and the Russian parliament. Because
of the difficult and protracted ratification process,
the trade and trade-related aspects of the PCA,
which cover purely EC competencies, were incorporated into a separate interim agreement. This
was signed by the two parties in July 1995 and
was ratified in December 1995. It came into force
in February 1996.
The PCA and the interim agreement allow for
unilateral suspension in the event that either party
considers that the other has broken a major element in the agreement, thereby allowing the EP
explicitly to raise the possibility of suspending
agreements with Russia in the event of human
rights violations or the failure to respect democratic procedures. The EU could also suspend the
agreements in response to what it considered a
break with the principles of a market economy.
Regular political dialogue between the EU
and the Russian Federation began in 1993. On November 11, 1993, a month before Russia's elections, a summit meeting between the EU and the
Russian government took place in Moscow. This
was foIlowed by the signing of a joint declaration
between the two parties in Brussels on December
9, 1993, envisaging twice-yearly meetings between Russia's president and the presidents of the
Commission and the European Council as weIl as
other regular political discussions at lower levels
(Commission, 1993d).
The EU and its main member states have
sought to demonstrate their particularly favorable
attitude toward Russia's joining important Western international institutions. Despite Russia's
brutal conduct of the war in Chechnya, the EU
supported Russia's entry into the Council of Eu-

Russia 409
rope, which took place in February 1996. Germany and France have supported Russia's membership of the G7 (now referred to as the G7 plus
1 or the G8), and the EU has on occasion declared
its support for Russia's early entry into the WTO.
The EU's general stance on the Chechnya conflict was to urge an end to fighting and a negotiated
solution while recognizing Russia's legal sovereignty over the territory. The EU criticized violations of human rights during the conflict and also
sought to persuade Russia to allow the Organization for Security and Cooperation in Europe
(OSCE) a role in monitoring and resolving the conflict. Concern over Russian policy in Chechnya, expressed particularly strongly in EP resolutions of
January and June 1995, delayed the process of
moving from the signing of the PCA with Russia to
the signing and implementation of the interim
agreement. In March 1995, during a visit to
Moscow, the Council presidency made progress on
the interim agreement dependent on the Russian
govemment's taking four steps on the conflict: allowing a permanent OSCE presence, allowing access for humanitarian aid, implementing a ceasefire, and making efforts to find a political solution.

Economic Relations
Economic relations between the EU and Russia
during the 1990s have been heavily marked by
Russia's continuing economic crisis as weIl as by
the highly unstable institutional context within the
country. Nevertheless, Russia dominates trade between the CIS and the EU, contributing the bulk
of CIS exports to the EU and absorbing the bulk of
CIS imports from the EU. The trade balance between the EU and Russia has remained strongly in
Russia's favor, partly because of the importance of
Russian energy exports to the EU and partly because of the stilllow levels of effective demand in
Russia's internal market. Russia's most important
trade partner within the EU is Germany, with Italy
some way behind and other EU member states
much further down the field.
Within the energy sec tor, Russian gas exports
are likely to continue to play an especially important role. Russia possesses 35 percent of total
world gas reserves, tightly controlled by a single
company, Gazprom. The EU is by far the most important export market for Russian gas, and the
share of gas in the West European energy market
may double by 2010. Germany imports the largest
amounts of Russian gas: 25.8 billion cubic meters

(bcm) in 1993, as against 13.8 bcm for Italy and

11.6 bcm for France. In 1994 31 percent of total
German gas consumption came from Russia, 72
percent of Austrian consumption, and 27 percent
of Italian consumption.
On the initiative of the Dutch govemment in
1991, the EU sought to establish a new international regime for regulating the energy markets
across the continent, through a so-called European
Energy Charter, which was eventually signed on
December 17, 1994. The EU's hope was that the
charter might provide a strong framework for enabling West European capital to acquire a large
role in developing and exploiting Russia's energy
assets. The initial high hopes for the charter have
subsequently been scaled down, partly as a result
of dis agreements within the West, but a legal basis
has been established for regulating some aspects
of economic relations in the energy field.
On the EU side, there has been frustration
over some aspects of Russian economic policy.
The Russian govemment's attitude toward the provision of Western financial services within Russia
has been criticized as too restrictive. More generally, the Russian authorities have been seen as failing to provide a sufficiently secure and open
framework for foreign direct investment. There has
also been criticism of protectionist impulses on the
Russian govemment's part in trade relations.
For its part, the Russian govemment has generally regarded the EU's approach to strengthening trade relations with Russia as too restrictive. It
has been particularly critical of the EU's reIuctance to recognize Russia as a full-fledged market
economy and of the (related) tough antidumping
instruments that the EU possesses against Russian
exports. It has also viewed EU barriers to imports
of such products as Russian textiles and steel as
too restrictive.
For the EU the interim agreement, which
came into force on February 1, 1996, should give
irnproved access to the Russian market for specific
products such as cars and beverages, curtail a
whole range of quantitative import restrictions
against EU products, and reinforce the protection
of intellectual property rights for EU economic operators. For Russia, the interim agreement should
reduce some quantitative restrictions against exports to the EU (though not necessarily in textiles
and steel) and restrict the use of antidumping instruments. Finally, the interim agreement establishes most-favored-nation status for trade rela-

410

Russia

tions while allowing Russia to offer some preferential trade terms to other CIS republies.
See also CENTRAL AND EASTERN EUROPEAN
STATES; COMMON FOREIGN AND SECURITY POLICY.

Bibliography

Commission, 1993a. Bulletin EC 3-1993. Luxembourg:

Office for Official Publications of the European
Communities, p. 61.
- - . 1993b. Bulletin EC 4-1993. Luxembourg: Office for Official Publications of the European Communities, p. 59.
- - . 1993c. Bulletin EC 11-1993. Luxembourg: Office for Official Publications of the European Communities, p. 71.

- - . 1993d. Bulletin EC 12-1993. Luxembourg: Office for Official Publications of the European Communities, p.103.
---.1994. Bulletin EC 6-1994. Luxembourg: Office
for Official Publications of the European Communities.
- - - . 1995. The European Union and Russia: The
Future Relationship. EC(COM) 223 95. Luxembourg: Office for Official Publications of the European Communities.
Official Journal. 1990. No. L 68,15/3/1990. Luxembourg: Office for Official Publications of the European Communities.

-Peter Gowan

s
Sakharov Prlze
for Freedom of Thought
The European Parliament established the
Sakharov Prize in 1985 to be awarded annually for
work in the field of East-West relations, notably
on human rights.

San lose Dlalogue

Launched by the Luxembourg Declaration of November 1984, the San Jose dialogue involves annual ministerial meetings between the EU and the
San Jose Group (Costa Rica, EI Salvador, Guatemala, Honduras, Nicaragua, and Panama) plus
Colombia, Mexico, and Venezuela as "cooperating countries" and Belize as an ob server. The
meetings cover a wide range of economic and political issues, focusing especially on efforts to promote democracy and development in Central
America.
See also LATIN AMERICA.

San lose Group

See

SAN

JOSE DIALOGUE.

Santer, lacques (1937- )

Jacques Santer, a former prime minister of Luxembourg, succeeded Jacques De10rs as president
of the Commission in January 1995. Like Delors,
Santer is a Eurofederalist, but he is much less assertive and ambitious than De1ors. Santer's
prepresidency got off to a bad start: a fractious debate and narrow vote of approval in the European
Parliament in July 1994 did little to enhance his
authority (parliamentarians were angry at the

manner of Santer's selection rather than dissatisfied with Santer hirnself). During the debate, Santer expressed a wish "to become a strong President at the head of a strong, coherent, determined
Commission." Santer was quick to point out that
coming from the EU's smallest member state
would not prevent hirn from becoming a strong
president. Yet being a Luxembourger put definite
limits on Santer's leadership. Moreover, in the
wake of the Treaty on European Union ratification
crisis, the European Council was unlikely to nominate a Commission president in the mold of Delors. Nevertheless Santer was an experienced
prime minister with the potential to become a reasonably forceful president. During his visits to
member state capitals before assigning portfolios,
Santer made the statements expected of a president-designate about imperviousness to national
lobbying. In the event, he allocated portfolios according to most member states' wishes, with the
exception of reducing the scope of Sir Leon Brittan's responsibilities for external economic relations. Thus, with one relatively easy act, he curbed
a potential riyal in the Commission and sent a signal to Britain, the least Commission-friendly govemment.
As Commission president, Santer faced a
number of challenges: absorbing the EU's enlargement (Austria, Finland, and Sweden became
members in January 1995, the same month that
Santer became president), developing a preaccession strategy for the Central and Eastern European
states, devising a new EU-Mediterranean partnership, preparing for Economic and Monetary
Union (EMU), and preparing for and participating
in the 1996-1997 intergovernmental conference
(IGC). In general, Santer's goal as president was
to replace the Commission's current image of ambition and intrusiveness, personified by De1ors,
with that of discretion and pragmatism. The key to
Santer's success, both symbolically and substantively, was to make subsidiarity meaningful, consult and inform as widely as possible, encourage
deregulation and competitiveness, complete the
single market, promote EMU, fight fraud in the
EU, and put the Commission's house in order.
Santer also attempted to take an important
new initiative. In a speech to the European Parliament on January 31, 1996, he proposed a Confidence Pact on Employment among employers,
trade unions, and govemments to boost jobs in the
EU not only by completing the single market but

411

412

SAVE

also by curbing state aid, strengthening education

and training, and promoting smaH businesses.
During the next three months, Santer toured EU
capitals, talking to employers and trade unions to
win their support, and held a roundtable conference in Brussels in April with more than seventyfive representatives of employers' and trade union
organizations. Santer also tried to persuade member states to allow surplus EU funds to be diverted
into the proposed Trans-European Networks
(TENs), multi-billion-doHar road, rail, and
telecommunication projects that have become a
symbol of EU public investment as weH as a
means of strengthening comrnunications links inside the single market. But national governments,
led by Britain and Gerrnany, refused to back Santer's expensive TENs initiative at the June 1996
Florence summit. Santer's in ability to secure
TENs funding and engender enthusiasm for the
confidence pact signaled a political setback for the
Comrnission president.
Yet, given the difficult circumstances of the
late 1990s, with Europe emerging from a deep recession, public opinion generally skeptical about
integration, and the Comrnission's image and influence greatly dirninished, Santer has been a remarkably effective Commission president. By
sticking to first principles while eschewing the political limelight, Santer has gradually rebuilt the
Comrnission's credibility, confidence, and authority during one of the most difficult periods in the
Commission's history.
See also COMMISSION.

SAVE

See

SPECIFIC ACTIONS FOR VlGOROUS ENERGY EFFI-

CIENCY.

Sehen gen Agreement

One of the major principles of the EU's single market is the abolition of all internal border controls in
order to allow for the completely free movement of
people between and arnong member states. The socalled Schengen agreement was negotiated in June
1985 in Schengen, a small town in Luxembourg
near the Gerrnan and French borders, by Belgium,
the Federal Republic of Germany, France, Luxembourg, and the Netherlands. The accord was to lead
toward the abolition of the then-existing border
controls arnong the five signatory states. Among the

goals of the agreement were to ease personal trave1

across the frontiers, reduce the checks on comrnercial trave1 to a minimum, establish some comrnon
rules for visa and asylum policies, and reinforce cooperation on issues such as drugs, arms, terrorism,
fiscal fraud, illegal imrnigrants, and the right of hot
pursuit by police across national frontiers. The
agreement was scheduled to be signed on December 15, 1989, and enter into force on January 1,
199{}-three years before the principle of open borders was to have been applied across the entire EC
at the end of 1992.
However, on December 14, 1989, Gerrnany
called off the signing ceremonies, saying it
wanted more time to study how the agreement
would affect the rights of East Germans wanting
to travel in the other four Schengen countries (this
was less than a year before Gerrnan reunification).
It appeared that the Gerrnan government stated in
public only what the other four signatories had
privately thought; no country was quite ready to
do away with border controls. The concerns expressed in late 1989 called into question the entire
viability of the 1992 open border objective. The
Netherlands, for exarnple, stated that it could not
accept Luxembourg's insistence on exc1uding
matters of fiscal fraud from the police cooperation
scheme (the Dutch argued that Luxembourg was
attempting to protect its offshore banking activities). Luxembourg's position was that it would
agree to comprornise its banking secrecy and give
details to national authorities in other countries
only in those specific cases in which suspected tax
evaders had been forrnally indicted and were facing a trial. Luxembourg simply refused to accept
any scheme to exchange personal financial data as
a matter of course. Belgium expressed dissatisfaction with the envisaged police computer network,
fearing that it would violate individual rights of
privacy. The French were not satisfied with the
c1auses concerning the freedom of movement of
migrant workers: as East Gerrnans migrated to
West Gerrnany, they could have displaced the
Turkish imrnigrants who, in the absence of border
controls, could freely have entered France. The
Benelux countries were wary lest open borders
between the two Gerrnanys, coupled with the
Schengen agreement, would mean that other nationalities in East Gerrnany (the Poles especially)
would then be able to move freely to the West.
Not surprisingly, therefore, the Schengen
agreement did not enter into force on January 1,

Schengen Agreement 41 3
1990, but the five states agreed to reopen negotiations and signed a supplementary agreement
(Schengen 11) on June 15, 1990. Schengen 11
spelled out the conditions and guarantees for implementing the free movement arrangements.
Comprising some 142 articles, the agreement entailed the amendment of certain national legislation and was subject to ratification by each of the
national parliaments. The main content of Schengen 11 dealt with the very complex issue of a common asylum policy for the five countries.
Schengen 11 laid down roles specifying which
member states are responsible for dealing with
which asylum applications. These roles are based
on the principle of "first handling": the country
that first handles a refugee's application for asylum remains responsible for that person. The responsible state agrees to take back any refugee
who stays in any other state that is party to the
agreement. Every asylum decision by one member
state is also binding for all the other countries.
Supranational supervision of the agreement's implementation was not provided for in Schengen 11,
and there was thus no institution that could sett1e
disputes between the national authorities in this
area. Accordingly, it was assumed that under
Schengen 11 a country would reject an asylum application as quickly as possible rather than risk a
lengthy dispute with another country about responsibilities for individual refugees.
Since the signing of Schengen 11 by the original five countries, ltaly (November 1990), Spain
and Portugal (November 1991), Greece (November 1992), and Austria (April 1995) have also acceded. The agreement was originally scheduled to
enter into force on January 1, 1993, contingent
upon ratification by the original five countries; of
these, only France and Luxembourg had ratified
by January 1, 1993 (Portugal and Spain had also
ratified, but Belgium, Germany, the Netherlands,
and Italy had not). Schengen lI's failure to enter
into force as planned highlighted the real problems in arriving at a harmonized European asylum
policy.
It was not until April 1, 1995, that a threemonth "trial" application of Schengen I and 11 began; full implementation started three months
later. Internal border controls are now entirely
lifted between six of the seven Schengen signatory
countries, opening an era of genuine free travel
and movement for millions of persons when crossing the internal borders. The benefits to air travel-

ers, who can move within "Schengenland" without customs or passport checks, are readily apparent.
The six participating countries are Belgium,
the Netherlands, Luxembourg, Germany, Portugal, and Spain. Invoking internal security concerns, France decided to avail itself of a safeguard
clause in the agreement that allowed the temporary continuation of passport controls. Nevertheless, France's neighbors are still entitled under the
agreement to use police hot pursuit onto French
territory.
Other signatory states (Italy, Greece, and
Austria) still have to complete specific physical
arrangements necessary for the strengthening of
security controls at extern al borders in order to
make possible Schengen's applicability. Denmark,
Finland, and Sweden (three EU member states),
along with leeland and Norway (non-EU members), were granted observer status in April 1996.
All five countries are members of a long-standing
Nordic passport-free zone that, according to a protocol on Denmark in the 1997 Amsterdam Treaty,
is compatible within the framework of a wider European cooperation on the free movement of persons.
Although Schengenland consists of countries
that also belong to the EU, the Schengen agreement was not originally an EU agreement. Recognizing this, the Commission attempted to fold the
principles of the Schengen agreement into the EU
proper. Thus, the Commission brought forth three
proposals to achieve its long sought after goal of
complete free movement. The first proposal
spelled out the scope of the ban on controls and
formalities at internal frontiers. It confmned that
all persons, whatever their nationality, would be
covered by the abolition of controls at the internal
borders. This proposal also provided for the abolition of pass port controls at airports and seaports
inside the single market (an obvious reference to
the UK). The second Commission proposal aimed
to coordinate member state legislation in order to
give third country nationals lawfully on the territory of a member state the right to travel to any
other member state. The social aspect of this measure was considerable: several million foreign residents, including members of EU citizens' families, would be able to visit other member states
without having to undergo any border crossing
controls. This would obviously encourage
tourism, increase cross-frontier purehases of

414

Schengen Information System (SIS)

goods and services, and improve popular awareness of the EU's existence. Finally, the third proposal sought to remove from existing national legislation any requirement that identity documents
be presented when crossing an internal frontier.
These proposals, subject to difficult and
lengthy decisionmaking procedures, have in effect
been overtaken by the Amsterdam Treaty, which
incorporates the Schengen agreement into the
TEU (while granting a British and Irish opt out)
and commits the continental EU member states to
open their internal borders by 2004.
See also IMMIGRATION POLICY; JUSTICE AND
HOME AFFAIRS.

-Leon Hurwitz

Schengen Information
System (SIS)
The Schengen Information System (SIS) is a database maintained by the countries that are party to
the Schengen agreement for the free movement of
people. The database-located in Strasbourgcontains information on aliens, individuals wanted
for extradition, people considered a threat to public order or national security, missing persons, and
objects wanted for evidence in criminal proceedings.
See also SCHENGEN AGREEMENT.

Schmldt, Helmut (1918- )

Helmut Schmidt, chancellor of Germany between
1974 and 1982, was surprisingly ambivalent about
the EC. On the one hand, he strongly supported
the Community as a means of promoting Western
Europe's economic prosperity and international
influence (especially vis-a-vis the United States);
on the other hand, he had little time for the Commission and implicitly reinforced intergovernmentalism. During the late 1970s, Schmidt and French
president Valery Giscard d'Estaing ran the Community like a personal fiefdom, largely through
the European Council, Giscard's brainchild. The
Commission was weak and demoralized, and the
other heads of government lacked their French
and German counterparts' knowledge of economics and grasp of international affairs. The FrancoGerman alliance, personified by the friendship between Giscard and Schmidt, was the sole motor of
Community momentum. Going weIl beyond the

framework of the 1963 Elysee treaty, Giscard and

Schmidt, both former finance ministers, got together often for dinner, spoke at least weekly on
the telephone, and caucused regularly on the
fringes of multilateral meetings.
The European Council proved especially useful in bringing Schmidt's initiative for a European
Monetary System (EMS) to fruition. At the Bremen summit in July 1978, Schmidt's forceful
chairmanship contributed to a general acceptance
of the monetary proposal, although Britain's unwillingness to participate in the future EMS became obvious. The EMS is also an example of the
strength of the Franco-German alliance and of the
Giscard-Schmidt friendship. Without Giscard's
backing, Schmidt's initial idea for an EMS would
not have succeeded; with French backing, it was
assured success.
Schmidt was alarmed about perceived U.S.
weakness on diplomatic and security issues as
weIl as in financial affairs. Personally and politically, Schmidt despised U.S. president Jimmy
Carter, whom he blamed for many of Europe's
problems in the late 1970s. This led Schmidt to try
to bolster the EC as a powerful pillar within
NATO. Even after the change of administration in
Washington, when Ronald Reagan came to office,
Schmidt continued to advocate a strong European
counterbalance to the United States in the alliance.
Hans-Dietrich Genscher, Schmidt's foreign minister, attempted to introduce a security and defense
dimension into the EC in the early 1980s, but to
no avail.
Schmidt's considerable influence on international politics and economics came to an abrupt
end in 1982, when shifts in his governing coalition
suddenly robbed hirn of enough parliamentary
support to stay in power. Thereafter Schmidt
joined Willy Brandt as one of Germany's leading
eIder statesmen, writing and lecturing mostly
about international affairs.
See also GERMANY.

Schuman, Robert (1886-1963)

French political leader, distinguished jurist, and
foreign minister, Robert Schuman is regarded as
the EU's patron saint. Born in Luxembourg of
French parents on June 29, 1886, when very
young he returned with his family to his father's
horne in the German-speaking part of the province
of Lorraine, which Germany had annexed in 1871.

5chuman, Robert (7886-1963) 415

Schuman received a German education in Metz;
attended the universities of Bonn, Berlin, and Munich, where he was known as a brilliant student;
and earned a doctorate in law at Strasbourg. In
1910 he began practicing law in Metz and was accredited to the Court of Appeals. Schuman served
in the German army during World War I.
Schuman began his distinguished political
career after the war when Lorraine was restored to
France under the Treaty of Versailles. A devout
Roman Catholic and passionate advocate of
democracy, he joined the Catholic Popular Democratic Party. In 1919 Schuman was elected to the
French parliament, where he remained for forty
years. Because of his French upbringing and German education, he had special knowledge of both
countries' languages, cultures, and history. As a
politician and lawyer, he specialized in German
problems, especially those raised by the return of
Alsace-Lorraine to France. From 1928 to 1936 he
was president of the Alsace-Lorraine Commission
of the Chamber of Deputies. He was also a member of the parliamentary finance commission for
seventeen years and in 1940 became its president.
In 1939 he was assigned the task of helping relocate the evacuees from Alsace and Lorraine who
feared a German advance. He served as undersecretary of state for refugees in the Paul Reynaud
government formed in March 1940 but refused to
serve under Marshai Petain, who established the
collaborationist Vichy regime in July 1940.
In August 1940 Schuman returned to Metz,
where he public1y condernned the expulsions of
the French population of Lorraine. His outspoken
criticism made hirn one of the first political leaders to be arrested and imprisoned by the Gestapo.
In 1942 he escaped with the help ofthe Resistance
movement and for the duration of the war led a
c1andestine existence by hiding in orphanages,
convents, and churches. During the war years
Schuman took part in the propaganda activities of
the underground and played an important role in
the creation of the Popular Republican Movement
that after 1945 replaced his former party as the
major organ of French Christian democracy.
A respected, deterrnined politician, Schuman
played a key role in postwar French govemments.
Elected to the Constituent Assembly in October
1945, he was again appointed chairman of the finance commission. As finance minister under the
governments of Georges Bidault and Paul Ramadier in 1946 and 1947, Schuman advocated an

austerity program and supported the Monnet Plan

for economic modernization, despite his initial
fears that it would be too inflationary to succeed.
As part of its anti-inflation program, the Ramadier
government maintained a wage freeze. By November of 1947, however, a widespread series of
strikes inspired by the communist-dominated
Confederation Generale du Travail resulted in Ramadier's resignation. After Leon Blum's cabinet
failed to win the necessary assembly vote, President Vincent Auriol requested Schuman to form a
government. Having won assembly approval in
late 1947, the new Schuman government-the
seventh govemment since the liberation of France
in 1945-stood firm against the communist challenge, enforced stringent economic measures, and
enabled the fledgling Fourth Republic to survive
its first great crisis. When Schuman was forced to
resign on June 20, 1948, after only seven months
in office, his successor, Andre Marie of the Radical Socialist Party, named him minister of foreign
affairs (Rioux, 1987, pp. 126-131,158-160).
Schuman made his greatest contributions to
Franco-German reconciliation and European unity
when he provided stability and continuity for
French policy as French foreign minister in ten
successive governments from July 1948 to December 1952. This deeply religious bachelor had been
one of the leading Frenchmen in the movement for
European political integration. Indeed, one of his
first acts as foreign minister was to invite the representatives of France, Britain, and the Benelux
countries to a conference in the fall of 1948 on the
creation of a European assembly. During the Soviet blockade of Berlin, Schuman demonstrated his
deeply held belief in the importance of FrancoGerman reconciliation when he appealed for the
gradual unification of Europe. In October 1948 he
became the first high-ranking Paris official to visit
the French occupation zone of Germany since the
end of the war. When, in November 1948, he
strongly protested an Anglo-American decision to
leave the ownership of the economically and
strategically vital Ruhr mines to a newly established German govemment, the United States and
Britain invited France to help them find a solution.
In exchange for abandoning controls on German
steel production, France was conceded a place on
the International Ruhr Authority under terms of the
London agreements of 1948.
Schuman's most important contribution to European unity came on May 9, 1950, when he pro-

416

Schuman, Robert (1886-7963)

posed that Germany and France put their coal and

steel industries under joint management. Schuman,
who understood the need for moral rehabilitation to
help Germany become truly democratic, changed
the course of European history by ofIering a practical, concrete way for two bitter enemies to begin
the process of reconciliation (Rioux 1987, pp.
142-143). The Schuman Declaration arose out of
the critical nature of Franco-German relations in
1949 and early 1950. Tension between the Western
powers and the Soviet Union had gradually increased with the breakdown of negotiations on the
German question in April 1947, the communist
coup in Czechoslovakia in February 1948, and the
Berlin Blockade. With the explosion of the first Soviet atomic bomb in September 1949 and repeated
threats from the Kremlin, the status of Germany became a major stake in East-West rivalry. From the
time of the Marshali Plan onward, the United States
began to view Germany's economic recovery and
rearmament as essential for a world power balance.
Accordingly, Secretary of State Dean Acheson
pressured Schuman in September 1949 to develop a
policy that would reintegrate Germany into the
Western concert (Duchene, 1994, pp. 182-190).
French officials were acute1y aware of other
problems posed by Germany. By 1950, the need
for a Saar settlement was urgent, as the new German chancellor, Konrad Adenauer, resisted French
economic annexation there. Moreover, the system
of restraints imposed by France on German steel
production was under constant pressure from
Bonn's demands to increase output. Schuman
made his first official trip to Bonn to rally French
domestic support behind his policy of detente.
When the French foreign minister demanded that
Germany cede France a fifty-year lease over the
disputed Saar territory in return only for future
concessions, Adenauer abruptly ended the discussions. It was Jean Monnet who, seeing the need
for a new French policy toward a revitalized Germany, developed the plan presented to Schuman
on April 29. Secretly adopting it, Schuman acted
quickly to secure the consent of Premier Georges
Bidault, sidestepped officials of the foreign ministry and of the industries involved, avoided consulting parliament, and ignored the British. After
winning cabinet approval on the morning of May
9 and receiving the enthusiastic support of Acheson and Adenauer, Schuman announced his bold
proposal to the public in a crowded press conference at the foreign ministry that afternoon, the day

before the tripartite foreign ministers conference

in London (Dinan, 1994, pp. 21-23; Duchene,
1994, pp. 190-202; Rioux, 1987, p. 142).
Schuman seized Monnet's daring idea as an
opportunity to advance his personal goal of promoting reconciliation between France and Germany and to provide a framework for the integration of Germany into the West. Although many
French politicians were shocked by the radical
policy reversal, official French opinion had swung
in favor of an economic accord with Germany.
Willing (in Schuman's words) to sacrifice national
sovereignty for the common good, France invited
its neighbors to join in this venture. Schuman proposed "to place Franco-German production of
coal and steel under common 'higher authority,'
within a framework of an organization open to the
participation of the other countries of Europe." He
proclaimed that the ensuing economic solidarity
would make any war between France and Germany "not merely unthinkable, but materially impossible." Schuman saw the "common bases for
economic development as a first step in the federation of Europe," from which would come the realization that the "fusion of interests," indispensable to the establishment of a common economic
system, would "be the leaven from which may
grow a wider and deeper community between
countries" (Fontaine, 1990, pp. 43-46).
The Schuman Declaration became a force for
change. Schuman wisely appointed Monnet to
lead the negotiations to translate the proposal into
a detailed plan governed by a treaty. Schuman
took responsibility for the difficult maneuvers
over the Saar, carried the policy inside the government, and stood firm against the opposition of the
steelmakers. Negotiations began on June 20,
1950, with France, Italy, the Benelux countries,
and Germany all accepting supranationality as the
basis for the talks. The German delegation, an
equal partner in the negotiations, was headed by
Walter Hallstein, a distinguished law professor
and a future president of the European Commission, tapped by Monnet. The British declined to
participate because they refused to commit themselves to a supranational High Authority and had
no national interest in reordering their policies
around Germany. The negotiations ended in December 1950 with a treaty instituting the European Coal and Steel Community (ECSC). The
treaty mandated a single market in coal and steel,
free of customs duties and other trade restrictions

SEM 2000

and administered by a High Authority, a supranational body with executive power. It also created a
Council of Ministers, a Common Assembly, and a
Court of Justice. German refusal to decartelize the
Ruhr, a condition set by the French and Americans, delayed the signing of the treaty. Once the
Germans gave in to U.S. pressure, however, the
treaty was signed in Paris on April 18, 1951, and
finally ratified by all six nations on December 13,
1951. The ECSC came into being in August 1952
in Luxembourg, with Monnet installed as the High
Authority's first president (Duchene, 1994, pp.
207-210; Gillingham, 1991, pp. 137-150).
Schuman's distinguished term as foreign
minister ended in December 1952. He supported
the Pleven Plan, the proposal for a European Defense Community signed by the ECSC's six member states in May of that year, and regarded its rejection by the French parliament in August 1954
as a major setback for European integration. Schuman returned to government as justice minister in
1955 and was elected the first president of the
joint assembly of the ECSC, the European Economic Community, and the European Atomic Energy Community on March 19, 1958. Schuman
served as a member of the European assembly
(forerunner of the European Parliament) until bis
resignation, for health reasons, in 1963. His book,
Pour l'Europe, was published a few days after bis
death on September 4, 1963, at the age of seventyseven.
Schuman's astute and courageous leadersbip
served as a force for stability, reconciliation, and
peaceful change in France and in Europe. He
gained French approval of Monnet's bold initiative, wbich provided a diplomatic breakthrough in
Franco-German relations and enabled Germany to
reenter Europe. By facilitating the transformation
of the Schuman plan into the ECSC, he helped lay
the cornerstone of the EU (Gillingham, 1991, pp.
155-158; Duchene, 1994, pp. 207-225; Dinan,
1994, pp. 29-30).
See also EUROPEAN COAL AND STEEL COMMU-

417

fice for Official Publications of the European Communities.

Gillingham, John. 1991. Coal, Steel, and the Rebirth 0/
Europe, 1945-/955. Cambridge: Cambridge University Press.
Poidevin, Raymond. 1986. Robert Schuman: homme
d'Etat, 1886-1963. Paris: Imprimerie Nationale.
Rioux, Jean-Pierre. 1987. The Fourth Republic,
1944-1958. Cambridge: Cambridge University
Press.

-Sherrill Brown Wells

Schuman Day
May 9, the date in 1950 when French foreign minister Robert Schuman proposed the pooling of
French and German coal and steel resources, is
celebrated annually as Schuman Day or Europe
Day.
See also SCHUMAN, ROBERT.

Schuman Declaratlon

See

SCHUMAN, ROBERT.

Scrutlny
The European Parliament (EP) has the formal
right of scrutiny in the EU. This covers both the
budget and the policymaking process. Thus the EP
can ask questions (orally and in writing) of the
Commission and the Council, grill commissioners
and national ministers in individual parliamentary
committees, draw up annual reports in particular
policy areas, pass urgent resolutions on current
political topics or human rights issues, hold public
hearings on controversial issues, and set up temporary committees of inquiry. The EP has the
power to dismiss the Commission as a whole (but
has never done so) and can take a case before the
Court of Justice.
See also EUROPEAN PARLIAMENT.

NITY; MONNET, JEAN.

Bibliography

Dinan, Desmond. 1994. Ever Closer Union? Boulder:

Lynne Rienner.
Duchene, Fran~ois. 1994. Jean Monnet: The First
Statesman 0/ /nterdependence. New York: Norton.
Fontaine, Pascal. 1990. Europe: A Fresh Start; The
Schuman Declaration 1950-1990. Luxembourg: Of-

SEA

See

SINGLE EUROPEAN ACT.

SEM 2000
See

SOUND AND EFFICIENT MANAGEMENT INITIA-

TIVE.

41 8

Single Currenty

Single Currency
See

ECONOMIC AND MONETARY UNION: TOWARD A

SINGLE CURRENCY.

Single European Art (SEA)

The Single European Act (SEA) of 1986 was a
milestone in the transformation of the EC, although to contemporaries its magnitude was uncertain. In retrospect, the SEA is credited with launching the single market program, greatly extending
the EC's competence, and laying the groundwork
for Economic and Monetary Union (EMU). Yet at
the time, the SEA seemed a disappointing result of
the historic intergovemmental conference (IGC) in
1985 to negotiate treaty reform. Nor was there consensus that treaty reform was necessary at that
stage of the EC's development. Whereas a1l memher states agreed on the importance of the single
market pro gram, a minority (Britain, Denmark,
and Greece) argued that a commitment on the national govemments' part to the use of qualified majority voting (QMV) in the Council with respect to
single market legislation would suffice to enact the
Commission's single market blueprint. However,
the majority of member states wanted to send a
signal both to the minority and to the outside world
that the EC was definite1y on the move again. Especially after the piethora of initiatives in the early
1980s to revive the EC's fortunes-the GenscherColombo proposals, the Stuttgart Dec1aration, the
European Parliament's Draft Treaty Establishing
the European Union, and the Ad-hoc Committee
on Institutional Affairs (the Dooge Committee)-and in view of the imminence of another Mediterranean enlargement (Spain and Portugal joined in
January 1986), most memher states agreed that an
IGC was warranted.
The IGC began in September 1985 and ended
at the Luxembourg summit in December. It produced a single treaty (the Single European Act) to
extend the Community's power to new fields,
strengthen its institutional framework, and formalize European Political Co operation (EPC) by
amending the Treaty of Rome. The SEA committed the EC to six objectives: completion of the single market program by December 31, 1992, increased economic and social cohesion, a common
scientific and technological policy, further development ofthe European Monetary System (EMS),
the emergence of a European social dimension,
and coordinated action on the environment. These

c1ear-cut tasks were linked in the SEA's preamble

to the ultimate goal of European union. The SEA
also extended majority voting to cover most of the
proposed single market legislation, in order to ensure that directives would not be unduly de1ayed
in the Council of Ministers. Another notable institutional innovation was the introduction of a "cooperation procedure" to extend the European Parliament's legislative authority. Finally, Title m of
the SEA provided a constitutional basis for EPC,
although the Community's foreign policy capacity
was not greatly enhanced.
Member states signed the SEA in early 1986,
with a view to ratifying it before the end of the
year so that it could come into effect in January
1987. The Danish parliament voted down the SEA
on January 21, 1986, but a majority of Danes endorsed the SEA in a referendum on February 27.
The Irish govemment delayed ratification until December 1986, after which achalienge to the SEA's
constitutionality by a private citizen necessitated a
referendum. The successful outcome of the Irish
referendum in May 26, 1987, allowed the SEA to
be implemented throughout the Community six
months later than planned, on July 1, 1987.
The SEA's relatively weak institutional reforms disappointed many supporters ofEurofederalism and supranationalism. Nevertheless the SEA
gave a huge boost to the Commission's morale
and provided the necessary institutional momenturn to implement the single market program,
which in turn reinvigorated the movement for European integration. British prime minister Margaret Thatcher's reaction to the SEA best indicates
its actual impact. At first Thatcher was scomful of
the SEA, proc1aiming that it would make httle difference to the Community. Subsequently, as the
Community grew stronger and the SEA triggered
renewed interest in EMU, Thatcher and other Euroskeptics denounced it as the root of all evil.
See also ECONOMIC AND MONETARY UNION:
POLITICAL ISSUES; QUALIFIED MAIORITY VOTING;
SINGLE MARKET PROGRAM.

Single Market Program

The single market program was an undertaking by
the EC to ehminate the barriers that existed to the
free movement of goods, services, capital, and
people among the member states. Launched in
1985, the program was to have been conc1uded by
the end of 1992. For that reason the effort to com-

Single Market Program

plete the single market was popularly known as

the "EC 1992 program."
Origin

FoHowing the successful forging of a customs

union in the early years of its existence, the EC encountered increasing difficulties during the 1970s
and into the 1980s in developing a single market
free of internal barriers. An array of barriers between the member states impeded business operations, and these were increasingly recognized as
contributing to the serious economic problems facing the EC: indifferent growth and high unemployment as weH as increasingly strong competition
from outside Europe. As a result, by the early
1980s pressures were mounting within the EC institutions and the private sector to address in a
comprehensive and systematic fashion the problems created by the "incomplete" internal market.
Thus, the circumstances were right when
Jacques De10rs assumed the presidency of the
Commission in 1985 with the avowed goal of
rekindling the flagging spirits of the Community
and relaunching it in the direction of integration.
He selected the single market program as the major vehic1e for that purpose. Delors's major collaborator in drawing up the single market program
and in moving it forward was Lord Cockfield, a
former British minister who joined the Commission at the same time and was given responsibility
for the single market. The Delors-Cockfield partnership was critical to the ultimate success of the
program-Delors provided the intellectual and
political leadership; Cockfield produced the details and pushed the program forward with fierce
determination.
However, before the single market program
could be 1aunched, a major institutional change was
necessary. One of the main reasons for the EC's inability to remove barriers during the 1970s and
1980s had been the pervasiveness of unanimous
voting in the Council of Ministers. Thus, the entry
into force of the Single European Act in 1987,
which introduced qualified majority voting in the
Council on single market issues, was a crucial factor in making the EC 1992 program possible.
The 1985 White Paper
The single market strategy was contained in a
white paper issued by the Commission and endorsed by the Council in June 1985. The white paper explained the background for the undertaking,

419

enumerated the obstac1es to the four freedoms

(free movement of goods, services, capital, and
people within the Community), and identified the
types of action necessary to overcome these obstac1es. The legislative program to accomplish these
objectives ran to about three hundred measures,
some already under consideration and others to be
developed (Commission, 1985)
The barriers subject to removal were divided
into three categories: physical, technical, and fiscal. Physical barriers related to the movement of
goods and individuals across member state borders. Technical barriers inc1uded the lack of uniformity among member state technical standards,
restrictive public procurement practices, restrictions on the free movement of labor and the professions, the absence of a common market for services, restrictions on capital movements, differing
regimes for intellectual and industrial property,
and differences among member state laws regarding the operation of companies. Fiscal barriers related to value-added and excise taxes.
The two key elements of the single market
program were its comprehensiveness and its specific timetable. The program consisted of a comprehensive package of issues on which action was
to be taken, with no room for exceptions. For each
of these issues a deadline was set for every stage
of the legislative process, culminating in final action (either adoption of a regulation by the Council or legislative transposition of a directive by the
member states) no later than the end of 1992.
The white paper represented a major step forward in the economic integration of the EC and
served as the main focus of the EC's activities during the eight-year period from its inauguration in
1985 to the deadline of 1992. It also served as the
centerpiece to the revival of the spirits of the EC,
which entered aphase of Europhoria that most importantly and fortuitously for the prospects for
1992 coincided with an economic upturn.
Despite the comprehensiveness of the single
market program, a number of sectors important (if
not critical) to the establishment of a single market were not inc1uded. Economic and monetary
union and the establishment of a single currency
were viewed as too far reaching to be proposed at
the same time, but they soon proceeded on a separate track. Similarly, it was deemed preferable to
deal separately with the vast set of issues involving the deregulation and liberalization of telecommunications. It was recognized that member-state

420

Single Market Program

opposition would prevent the establishment of an

EC energy regime for the foreseeable future, and
environmental issues were addressed only marginally.
In addition, the Commission, and particularly
Jacques Delors, believed the single market program would not obtain the necessary political support unless it were accompanied by measures to
protect and promote the interests of workers in the
EC; hence, efforts were undertaken to adopt a "social action agenda" (i.e., a comprehensive social
policy). Finally, a critical element in obtaining the
agreement of the less-developed member states
was adecision to double the appropriation of
funds to these countries under the EC's structural
adjustment programs. This was intended to promote econornic and social cohesion by accelerating the poorer member states' development,
thereby enabling them to cope better with the increased competition that was expected from the
removal of internal barriers in the EC.
Achievements

By the end of 1992 the EC had adopted about 95

percent of the measures envisaged under the single
market program. As of 1997 only a handful of single market issues remained unresolved-those for
which the member states could not achieve the
necessary comprornises to perrnit adoption of proposals by the Council. Despite their small number,
the proposals that remained outstanding, such as
the proposed regulation for a European company
statute and the establishment of a value-added tax
regime based on payment in the country of origin
rather than the country of destination, represented
a significant setback to the single market objective.
In any event, an assessment of the results of
the single market pro gram must take account of
the fact that the adoption of EC legislation is only
the first step. Although regulations automatically
have the force of law in the member states, directives (accounting for about 80 percent of EU legislation) must be transposed into legal form in the
member states. By 1997 the member states had
transposed more than 90 percent of the required
measures. However, the measures for which transposition had been completed varied among the
member states, so that only 60 percent of the single market directives had been transposed by all
member states. Thus, in certain sectors a significant amount of legislation still awaited full implementation, notably in public procurement and in-

surance. The main reasons for delays in transposition are the technical complexity of legislation and
procedural problems relating to member-state decisionrnaking processes (Commission, 1996c).
Moreover, the assessment of the extent to
which barriers have been removed and free movement enhanced must be qualitative as well as numerical (Calingaert, 1996). There have been conspicuous successes and there are areas where the
EU is still moving in the right direction; but in
other areas more needs to be done, and in some
progress has been lirnited.
Successes. Controls have been removed on
the physical movement of goods at EU internal
borders. Capital movements have been fully liberalized, thereby increasing capital flows and further integrating financial markets.
Moving in the fight direction. The principle
of a single operating license has been established
for financial services. The license is granted in the
horne country, which exercises the main regulatory supervision, and is valid for the entire EU.
Such a regime is in operation for banks; a parallel
one for insurance companies came into effect later
but has already resulted in increased competition;
investment services were added as of 1996.
The final legislative package of measures liberalizing air transportation was implemented in
1997, elirninating the remaining restrictions on
EU carriers regarding frequency and routing of
flights within the EU and government price-setting restrictions. However, the benefits accruing
from this legislation are partially offset by certain
other limitations on the carriers' operations, particularly by reduced availability of and government control over slot allocations at major airports. Restrictions on road transportation between
member states have also been virtually elirninated.
A major change as a result of the single market program was to replace efforts to legislate specific European technical standards with a system
whereby "essential requirements" are set in various product categories that must be adhered to in
the development of European product standards
by the private sector, coordinated by the European
standards bodies. In other areas, detailed requirements continue to be legislated at the EU level,
and for products not covered by EU harmonization legislation, mutual recognition of member
state standards by the other member states prevails. Significant progress has been made, though
much remains to be done.

Single Market Program

The harmonization of veterinary and plant
health controls is largely completed. Mutual
recognition of professional qualifications has been
largely established, with the onus for nonrecognition placed on the objecting member state. However, problems of implementation remain. Considerable progress has been made in harmonizing
measures protecting intellectual property: the establishment of an EU trademark, a European
Trademark Office, and a number of measures in
the copyright field. However, several measures remain pending, including the legal protection of industrial designs and biotechnology products.
More needs to be done. The development of
the necessary structures for, and practice of, mutual recognition of testing and certification of
products is proceeding slowly.
Comprehensive legislation has established a
transparent, nondiscriminatory regime for procurement by government agencies and private
bodies operating on the basis of special or exclusive rights granted by governments. The scope of
this legislation is vast, as are the potential econornic consequences in a sector hitherto characterized by pervasive protectionism. Although change
is clearly underway, progress is bound to be slow.
Although the right of member state citizens to
residence anywhere in the EU has been established,
some controls remain on peop1e crossing member
state borders. The major force for liberalization exists outside the formal EU framework. It is the
Schengen agreement, under which thirteen member
states (all except Britain and Ireland), plus Iceland
and Norway, agreed to elirninate all border controls. However, three members have not been able
to participate and a fourth, France, has refused to
implement its provisions. The Amsterdam Treaty
incorporated the Schengen agreement into the EU
while retaining the British and Irish opt outs.
Minimum levels of value-added tax have
been established (resulting in a narrowing of the
spread of rates), and an interim, more simplified
and more business friendly system has been introduced. However, the member states have not
agreed on a definitive tax system based on payment of the tax in the country of origin rather than
the country of destination (avoiding the necessity,
as at present, of distinguishing between "domestic
sales" and "exports" to the EU), because of concern over the possible loss of tax revenues.
Limited progress. Although some measures
have been adopted relating to company law and tax-

421

ation to facilitate cross-border operations by firms,

several major legislative proposals remain blocked,
mainly because of long-standing controversy over
proposals to permit workers to participate in firms'
decisionmaking processes. Despite the original intention to reduce substantially the differences
among excise tax rates, a more modest arrangement
established minimum rates, maintaining the principIe of payment in the country of purchase.

Assessment
The single market program was a major event in
the development of the EU and a major step in the
direction of European integration. On balance it
was clearly a success. Substantial progress has
been made in elirninating barriers, and a process
of change has been unleashed-both in terms of
the mIes of the marketplace and, equally important, the attitudes of econornic operators-so that
results will build on one another.
However, it is difficult to ascribe econornic
benefits with any precision. Although economic
integration theory generally assumes that a reduction in barriers to trade and the factors of production results in a higher level of econornic activity
than would otherwise have been the case, econornic deve10pments in the EU since 1985 have,
of course, been the result of many factors, not
so1ely the single market program. Nonetheless, indications of positive effects are contained in the
sharp increases registered during the period in direct inward investment and in merger and acquisition activity. Sirnilarly, flows of intra-EU trade appear to have been positively affected by the
reduction of barriers (Buigues and Sheehy, 1995).
In 1996 the Comrnission issued an assessment,
based on a comprehensive analysis by independent experts, that concluded that the single market
program had produced significant (but not massive) benefits, including 1.1 to 1.5 percent higher
income, 300,000 to 900,000 more jobs, 1 to 1.5
percent lower inflation, 2.7 percent higher investment, intensified intra-EU trade, greater econornic
convergence among EU regions, and an ECU 5
billion reduction in road and other transport costs
(Comrnission, 1996a, 1996b).
Beyond the White Paper
Despite its formal conclusion date of December 31,
1992, and the efforts made to meet that deadline,
the single market program was and remains a continuing and evolving process. It was recognized

422

515

from the outset that not all measures necessary to

the establishment of a genuine single market would
be in place by that date and that circumstances affecting the single market would change over time.
However, the focus of activity at the EU level
has shifted away from the legislative program.
Proposals for new legislation have dropped off
sharply since 1990, both because the fund of necessary measures had become exhausted and because of the introduction of subsidiarity, requiring
that legislative action be taken by the EU only if
its objectives cannot be achieved by the member
states. As a result, the Commission has undertaken
a program of simplification and consolidation of
existing legislation and withdrawal and revision of
pending proposals.
Actions at the EU level have thus concentrated
increasingly on ensuring the effective functioning
of the single market. A key element is enforcement,
which takes three forms. (1) The Commission has
oversight over member-state compliance with the
treaties and legislation, including the proper transposition of single market directives. In cases of perceived noncompliance, the Commission can call for
remedial action, institute formal proceedings, and
as a last resort, refer cases to the European Court of
Justice (ECJ). The Commission has carried out this
function diligently. (2) Competition policy has been
an integral component of the single market by preventing noncompetitive behavior and practices by
companies and governments. Since 1985 the Commission has actively exercised its enforcement
powers to prevent restrictive agreements and abu ses
of dominant positions, to ensure that proposed
mergers and acquisitions do not abuse dominant
positions, and to keep state aid, often highly sensitive politically, within the limits prescribed in the
treaty. (3) The ECJ has rendered decisions and established legal precedents that have protected and
extended economic integration.
Although in recent years the ECJ has tended
toward increased caution in its decisions affecting
single market issues, all three channels of enforcement can be expected to continue to play active,
important roles in preserving and building on the
single market program.
However, the future of the single market program depends increasingly on actions at the member-state level. In the first instance, that relates to
proper transposition of EU directives, an area in
which much improvement is needed. In a more
general sense, the key factor will be the extent to

which member state authorities and officials will

work together and, in particular, will develop sufficient confidence in each others' systems and enforcement mechanisms to accept regulation and
enforcement by other member states, since the basis for much of the single market program-formally or otherwise-is mutual recognition of actions taken elsewhere in the EU. Although the
Commission has undertaken a number of programs to accelerate such cooperation, the results
are likely to be feIt only over a long period.
Thus, the single market program should be
seen as a continuing process, launched through a
formal, comprehensive program of legislative measures covering a specific period (1985-1992), but
in fact having no set end point in time or substance.
The momentum set in motion will contribute to increasing economic integration. New initiatives are
less likely than incremental action, and it will probably never be possible to determine that the single
market is "complete." In fact, although the process
will undoubtedly bring an increasing degree of integration, some areas will experience more integration than others, and some will probably remain
largely outside the scope of the single market effort.
See also CmdMoN MARKEr; COMPETITION POLICY; EcONOMIC AND MONETARY UNION: TOWARD A
SINGLE CURRENCY; SCHENGEN AGREEMENT.

Bibliography
Buigues, Pierre, and John Sheehy. 1995. ''The Interna!
Market Program: The bnpact on European Integration." Document 1I/133/95. Brussels: Commission.
Calingaert, Michael. 1996. European Integration Revisited: Progress, Prospects and U.S. Interests. Boulder: Westview.
Commission. 1985. Completing the Intemal Market.
COM(85) 310. Luxembourg: Office for Official
Publications of the European Communities.
- - - . 1996a. The Impact and Effectiveness of the Single Market. COM(96)520. Luxembourg: Office for
Officia! Publications of the European Communities.
- - - . 1996b. The Single Market and Tomorrow's Europe. Luxembourg: Office for Officia! Publications
of the European Communities.
- - - . 1996c. "Single Market Cannot Deliver Fun
Benefits Without Better Implementation." MEMO/
961100.

-Michael Calingaert

515
See SCHENGEN INFORMATION SYSTEM.

SNB

Six

The Six refers to the six original member states of

the EC: France, Germany, Italy, Belgium, the
Netherlands, and Luxembourg.

Siovakla
Since the breakup of Czechoslovakia in December
1992, the Czech Republic has remained in the first
rank of EU candidate countries, but Slovakia has
slipped behind. Despite having had a Europe
Agreement in force since February 1, 1995, and
having applied for membership on lune 27, 1995,
Slovakia's turbulent politics and sluggish economic reforms suggest that EU accession is unlikely in the foreseeable future. This was borne
out by the Commission's opinion of luly 1997 on
Slovakia's application.
See also CENTRAL AND EASTERN EUROPEAN
STATES; TABLE 6.

market integration and overcome some of the obstacles of EU regulation. Thus, the Commission
introduced a multiannual program for SMEs (the
third program, from 1997 to 2000, was adopted in
1996) and launched a number of initiatives such
as the Business Cooperation Network (BC-Net), a
confidential network promoting contact and cooperation between small businesses; the Business
Co operation Center (BCC) for nonconfidential
contacts; and the European Information Centers,
offices throughout the European Economic Area
that provide information and assistance to SMEs.
More broadly, the Commission emphasized the
economic importance of SMEs in its 1993 white
paper, Growth, Competitiveness, and Employment, and its 1995 Confidence Pact on Employment.

SMEs

See

Siovenla
Slovenia was the first of the former Yugoslav republics to declare independence. After a brief military confrontation, Serbia allowed Slovenia to go
its own way (Slovenia did not have a significant
Serbian population), and the EU recognized
Slovenia in lanuary 1992. By virtue of its ethnic
homogeneity and relatively high level of economic development, Slovenia is the most stable of
the ex-Yugoslav republics. However, a long-standing territorial dispute between Italy and Slovenia
delayed the development of EU-Slovenia relations, and a Europe (association) Agreement was
signed only on lune 10, 1996. Making up for lost
time, Slovenia applied for EU membership on the
same day. Given its sound economic performance
and stable democracy, Slovenia stands a good
chance of early EU membership, not least because
of strong support from Austria and Germany and a
favorable Commission opinion in luly 1997.
See also YUGOSLAVIA; TABLE 6.

Small and Medlum-Slzed

EnterprIses (SMEs)
Stung by criticism that the single market program
was for the benefit only of big business, in the
late 1980s the Commission developed a strategy
to help small and medium-sized enterprises
(SMEs) to avail themselves of the benefits of

423

SMALL AND MEDIUM-SIZED ENTERPRISES.

Snake
The end of the Bretton Woods system in August
1971 and the subsequent "float" of major currencies against each other endangered market integration and economic cohesion in the EC. Accordingly, in April 1972 member states launched the
"snake," a regime to keep fluctuations between
their currencies within a 2.5 percent margin inside
the "tunnel" established during the Smithsonian
talks of December 1971 to repair the damaged international monetary system. For the next three
years the EC's currencies wiggled in and out of
the snake, with the mark, buoyed by Germany's
low inflation and large trade surplus, pushing
through the top and the pound, franc, and lira,
weakened by their countries ' high inflation and
large trade deficits, falling through the bottom. By
the mid-1970s, widely diverging inflation rates
and economic performances in the member states
completely underrnined the snake and ended the
EC's first experiment with Economic and Monetary Union, the so-called Werner Plan.
See also ECONOMIC AND MONETARY UNION:
TOWARD A SINGLE CURRENCY; EUROPEAN MONETARY SYSTEM.

SNB
See

SPECIAL NEGOTIATING BODY.

424

Soames Affair

Soames Affalr
The Soames Affair, a diplomatic incident between
France and Britain, takes its name from a meeting
in Paris in February 1969 between Christopher
Soames, the British ambassador, and French president Charles de GauBe. In the meeting, de GauBe
spoke of possible British membership in a
broader and weaker EC, directed by Britain,
France, Germany, and Italy, that would form the
nucleus of an association of Western European
states independent of the United States. De
.GauBe's vague proposal seemed motivated by recent foreign policy setbacks and by a belated realization of Germany's growing economic and political power within the EC. According to the
British record, de GauBe suggested to Soames
that Britain and France pursue the proposal bilateraBy before consulting other countries. Furious
over de GauBe's two previous vetoes of Britain's
EC membership application and suspecting a
French diplomatic trap, the British Foreign Office
released arecord of the de GauBe-Soames conversation to a number of European posts, which
in turn informed their host govemments. This incensed de GauBe, who accused the British of indiscretion and breach of trust. Whether or not de
GauBe had changed his mind about British membership in the EC, the Soames Affair ensured that
enlargement would not happen as long as he remained in power.

Soda. Charter

As a complementary initiative to the single market

program, Commission president Jacques Delors
promoted the idea of a Social Charter to ensure
that workers in the EC would benefit as much as
employers from a fuBy functioning single market.
In support of his position, Delors harked back to
the preamble of the Treaty of Rome, which listed
as one of the EC's objectives "the economic and
social progress" of the member states and the
"constant improvement of the living and working
conditions of their peoples." In June 1988, at the
Hanover summit, the European Council emphasized the importance of the single market's social
dimension. Based on contributions from the European Parliament and the Economic and Social
Committee, in October 1989 the Council of Ministers completed a draft Charter of Fundamental
Social Rights for Workers, a declaration of principIe that defined the European model of society.

The issue became extremely controversial because some politicians, especiaBy British prime
minister Margaret Thatcher, argued that the Social
Chatter would nullify the single market's gains by
pushing up labor costs. Thatcher made her case at
the Strasbourg summit in December 1989, where
the other Community leaders adopted, in the form
of a declaration, the text of the Council's Social
Chatter. The European Council noted that the Commission had formulated an Action Program and invited it to submit precise proposals for legislation.
The Action Program and the Social Charter
covered such areas as pay, better living and working conditions, social security, freedom of association and coBective bargaining, health protection
and workplace safety, and, most controversial of
all, information, consultation, and worker participation in managing a company. The Social Charter was not legally binding but indicated the intention of eleven of the twelve member states to
incorporate legislation on the areas covered by it
as the single market program progressed.
At the Maastricht summit in December 1991,
John Major, Britain's new prime minister, maintained his predecessor's opposition to the Social
Charter and succeeded in removing it from the
body of the Treaty on European Union (TEU). Instead, the other member states signed a legally
binding protocol to the treaty, agreeing to use existing institutions and decisionmaking procedures
to pursue social policy. However, under Tony
Blair, Major's successor, Britain decided to accede
to the social policy provisions of the 1997 Amsterdam Treaty and to accept directives that had already been agreed upon under the social protocol
oftheTEU.
See also SOCIAL POLICY.

Sodal Dlalogue
The social dialogue involves negotiations among
the EU's "social pattners" (employers' and workers' representatives) to reach agreement on social
policy initiatives. A social dialogue may begin
when the Commission announces that it intends to
act in a specific social area and asks the social
partners to negotiate as a substitute for legislation.
If the negotiations are successful, the Council of
Ministers can give the ensuing contract the force
of law. By contrast, if the talks break down, the
Council may proceed with legislation of its own,
not necessarily to the social partners' liking. The

Social Policy

Council first used this implicit "negotiate or we

williegislate" threat in 1994, to enact the long-delayed European Works Councils. The social partners got the message: soon thereafter, on the contentious parental leave issue, the first genuine
European "collective agreement" was coneluded.
See also SOCIAL POLICY.

Soda. Dimension
See

SOCIAL POLICY.

Sodal1st Group
See PARTY OF THE EUROPEAN SOCIALISTS.

Soda. Partners
The European Trade Union Confederation
(ETUC), the Union of Industrial and Employers'
Confederations of Europe (UNICE), and the Europe an Center for Public Enterprise (CEEP) are
known collectively as the "social partners." They
participate in the social dialogue-negotiations
among themselves to reach agreement on social
policy initiatives-and advise the Commission on
other relevant legislative proposals.
See also SOCIAL POLICY.

Soda. Pollcy
Social policy primarily deals with issues related to
employment, ineluding measures to ensure the
free movement of labor and measures to protect
the quality of working life. According to Giandomenico Majone, "social policy" should more
correctly be called "social regulation" because it
consists of programs that balance economic efficiency with concems for the quality of life and is
not intended to replace welfare programs in the
member states (Majone, 1993, p. 168). Social policy has three objectives: full and better employment, improvement of living and working conditions, and greater participation of the social
partners in the economic and social decisions of
the EU (Springer, 1992).
Social policy is a shared competence (i.e., responsibility for it is shared between the EU's institutions and the member states), but the principle
of subsidiarity provides an uncertain guide to the
appropriate activities of each actOf. During the
1980s, British prime minister Margaret Thatcher

425

forcefully argued against the EC's usurping national prerogatives in social policy. Jacques Delors, president of the Commission, opposed her
with an equally strong argument that Europeans
share social values and that the EC must protect
and enhance those values. Controversy about national and EC prerogatives came to a head at the
Maastricht summit in December 1991, when
British opposition to the proposed Treaty on European Union's social policy provisions threatened
to wreck the intergovemmental conference. At the
last minute, Prime Minister John Major accepted
the offer of a British opt out from the treaty's social policy provisions or, more precisely, a social
policy opt out from the treaty itself, whereby the
other eleven member states agreed to aseparate
protocol on social policy attached to the treaty.
However, under Tony Blair, Major's successor,
Britain decided to accede to the social policy provisions of the 1997 Amsterdam Treaty and to accept directives that had already been agreed upon
under the social protocol of the TEU.
Legal Basis and Decisionmaking
The legal basis for social policy is found in numerous passages in the basic treaties. In the Treaty
of Rome (1957), these inelude Artieles 48 through
51 (dealing with the free movement of workers)
and Title III on Social Policy, which consists of
three key artieles: Artiele 117 empowers the Commission to promote elose cooperation among the
member states in social policy; Artiele 118 states
that health and safety, vocational training, labor
law and working conditions, employment, and social security are encompassed in social policy; and
Artiele 119 gives working women the right to
equal pay for equal work. Although not specifically addressing social policy, a number of other
treaty provisions (e.g., Artiele 54g and Artiele
100) have served as the basis for directives related
to social policy. The treaty also established the
European Social Fund (Artieles 123 to 128) to
provide financing for training and relocation programs for displaced workers.
The Single European Act (SEA) made few
changes in social policy. It did, however, provide
for the adoption of health and safety directives by
a qualified majority vote in the Council of Ministers (Articie 118a). Directives for social policy
had previously required unanimity in the Council,
which was the greatest obstaele to the development of Community social policy.

426

Social Policy

The Treaty on European Union (TEU) both

expanded and complicated the legal basis for social policy. The relevant provisions are included in
the Protocol on Social Policy and the Agreement
on Social Policy attached to the treaty. These enable the Council (without British participation between 1993 and 1998) to adopt directives that are
applicable throughout the EU. Most proposed directives may be adopted by a qualified majority
vote (the required number of votes being adjusted
between 1993 and 1998 to reflect Britain's opt
out). Proposals dealing with sensitive national
concems, such as social security, require the unanimous consent of all members (initially with the
exception of the British govemment). The treaty
also established a procedure by which the social
partners-the European Trade Union Confederation, the Union of Industrial and Employers' Confederations of Europe, and the European Center
for Public Enterprise-may adopt agreements.
Under this procedure, the Commission submits
the social partners' agreement to the Council,
which may, on the basis of a qualified majority
vote, make the agreement binding. That procedure
was used for the first time in 1995 to negotiate an
agreement on parental leave. The social partners
also have the right to be consulted on all proposals
dealing with social policy.
Social policy includes numerous subsections
such as equality programs to protect the rights of
working women, health and safety standards,
training programs, and worker information and
consultation policies. The scope and direction of
social policy are generally set forth in five-year
action programs or framework agreements, which
are implemented primarily by directives.
Development of Sodal Policy

The history of social policy shows little activity in

the 196Os. During the 1970s, social policy became
more prominent and more controversial. The first
framework agreement was accepted in 1974. A fullscale policy for working women started with the
adoption of two directives dealing with equal pay
and equal treatment. The Commission began to
draft a policy on employee participation in the
workplace but did not finish the task until the works
council directive was adopted in June 1994 by the
Council, acting under the provisions of the social
protocol. The social activism of the 1970s gave way
to a quieter era in the 1980s. Late in the 1980s,
however, two irnportant documents, The Social Di-

mension of 1992 and the Charter of Fundamental

Social Rights for Workers (Social Charter), were
adopted in response to concems about the social
consequences of the single market program. This
marked a renewed commitrnent to social policy, although a commitrnent tempered by economic realities. The TEU opened new possibilities for social
policy, but economic concems continue to overshadow social objectives: in the 1990s, employment became the number one priority.
The Social Charter stands as the hallmark of
EU social policy (Commission, 1989). It is a declaration of principle and defines the European social
model, which rests on the pillars of social Catholicism and social democracy that characterize European social values. The Social Charter sets out
twelve types of social rights, including rights for
persons not in the workforce-such as the elderly-and rights for the employed. The most controversial rights include those on industrial democracy and collective bargaining at the Community
level. In the TEU, member states (initially with the
exception of Britain) agreed to "continue along the
path laid down in the 1989 Charter."
The Commission is centrally involved in social policy. Its Directorate-General for Employment, Social Affairs, and Education (DG V) drafts
legislative proposals and influential studies, such
as the annual series Employment in Europe. The
Council has been much less interested in and
much less receptive to social policy than the Commission. Similarly, the European Council only occasionally takes a position on social policy, such
as at its meeting in Madrid in December 1995
when it declared rather grandly that "job creation
was the principal social, economic and political
objective of the EU and its Member States." The
European Parliament (EP) is an advocate of social
policy whose role has been strengthened by the
TEU. Within the EP, the group of the Party of the
European Socialists and the group of the European People's Party (Christian Democrats) frequently cooperate in support of social policy proposals. The social partners are also important
social policy actors. Indeed, under the terms of the
TEU and an earlier agreement to establish a social
dialogue, they have a quasi-official or corporatist
role in formulating social policy.
Conc/usion

Social policy has developed incrementally in response to interests prevailing in different eras of

Sound and Efficient Management Initiative (SEM 2000)

European integration but has generally been overshadowed by economic priorities. Social policy is
neither comprehensive nor coherent; it primarily
complements national policies while expressing
European ideals of social justice. The proper role
of the EU in creating social policy has not, and
perhaps cannot, be defined. Such a lack of definition causes hotly contested claims between those
who want to preserve national prerogatives in social policy and those who believe that EU social
policy is an essential component of European integration. The TEU removed major obstacles to the
development of social policy, but economic problems and market demands have so far taken precedence over commitment to social policy in the
1990s. It is hardly surprising that for economic,
political, and ideological reasons controversy continues to trouble the development of social policy
at the European level.
See also DELORS, JACQUES; REGULATORY POLICY; SINGLE MARKET PROGRAM.

Bibliography
Commission. 1989. Community Charter 0/ Fundamental Social Rights. COM (89) 248. Luxernbourg: Office for Official Publications of the European Cornrnunities.
Majone, Giandornenico. 1993. ''The European Community Between Socia1 Policy and Social Regulation."
Journal 0/ Common Market Studies 3, no. 2 (lune).
Springer, Beverly. 1992. The Social Dimension 0/1992.
New York: Greenwood.

-Beverly Springer

Sodal Protocol
During the 1991 intergovernmental conference on
political union it was obvious that British prime
minister John Major wanted no change in the EC's
social policy mandate. At the Maastricht summit
in December, social policy turned out to be the final sticking point, as Major refused to accept even
the most minimal changes in the draft social chapter of the proposed treaty to allow the talks to conclude. Using German chancellor Helmut Kohl as
an intermediary, Commission president Jacques
Delors proposed instead appending a Social Protocol to the treaty, which would allow the other
member states to move forward without Britain on
an extended range of social policy matters. Thus
the Protocol on Social Policy empowered the others, acting together, to use the EU's infrastructure

427

to implement aspects of the 1989 Social Charter.

Under Tony Blair, Major's successor, Britain decided to accede to the social policy provisions of
the 1997 Amsterdam Treaty and to accept directives that had already been agreed upon under the
social protocol of the TEU.
See also SOCIAL POLICY.

SOCRATES
SOCRATES is a program designed to encourage
innovation and improve the quality of education
through closer cooperation between educational
institutions in the EU. Covering the years
1995-1999 and with a budget of ECU 1 billion,
SOCRATES combines a number of new and preexisting initiatives, including the European Community Action Scheme for the Mobility of University Students (ERASMUS), the Action Program to
Promote Foreign Language Competence in the
European Community (LINGUA), and distance
learning.
See also EOUCATION, VOCATIONAL TRAINING,
AND YOUTH POLICY.

Solemn Declaratlon on
European Union
At their summit in Stuttgart on June 17-19, 1983,
the heads of state and government adopted a
Solemn Declaration on European Union to proclaim the EC's international identity and the member states' determination to coordinate their foreign policy more closely in European Political
Cooperation (EPC). Known also as the Stuttgart
Declaration, the Solemn Declaration grew out of
the Genscher-Colombo Proposals, an initiative by
German foreign minister Hans-Dietrich Genscher
and Italian foreign minister Emilio Colombo in
November 1991 to reform the EC's institutions
and policies.

Sound and Effldent

Management Initiative
(SEM 2000)
The Sound and Efficient Management Initiative
(SEM 2(00) is one of a number of recent efforts to
improve control of the EU budget, 80 percent of
which is administered by the member states themselves.
See also FRAuo.

428

Sound Financial Managment Group

Sound Flnanclal
Management Group
The Sound Financial Management Group was established on the initiative of the Commission to
help improve financial control in the EU. Chaired
by the commissioner responsible for the budget,
the group includes personal representatives of the
finance ministers of the member states. Having
been endorsed by the European Council at its
summit in Madrid in December 1995, the group
met for the first time in March 1996.
See also FRAUD.

South Afrlca
Relations with South Africa constitute one of the
most enduring and most successful foreign policy
areas of the EU. Beginning in the 1970s, the policy has straddled the informal and formal periods
of European Political Cooperation (EPC), constituted one of the first "joint actions" of the Common Foreign and Security Policy (CFSP) and in
the latter half of the 1990s has developed into a bilateral Cooperation Agreement encompassing
trade, development, and human rights. Consequently, relations with South Africa represent an
excellent case-study by means of which to explore
the transition of foreign policy objectives as weIl
as demonstrate the interrelated nature of the EU's
external relations. As the following account illustrates, lack of clarity between the EU's Pillar One
(EC) and Pillar Two (CFSP) activities adds to policy complexity, not policy efficiency: to compound this, decisionmaking by unanimity tends to
lead to a foreign policy based upon the lowest
common denominator.
During the 1977-1984 period, the EC
adopted by consensus a twin-track policy under
the framework of EPC. First, in response to the
apartheid regime and European domestic pressures, in 1977 the EC adopted a Code of Conduct
for European firms with subsidiaries operating in
South Africa. The Code was intended to negate
discrimination by providing for desegregation,
higher wage rates, and fringe benefits for black
workers. Its impact was modest given that at its
peak fewer than 200,000 workers were covered by
its provisions, which many employers were reluctant to implement fully. The code was eventually
abandoned in 1993. Second, the EC sought to end
neighboring countries' economic dependency on
South Africa, largely by supporting regional inte-

gration through the Southern African Development and Cooperation Conference. However, success here was marginal at best, and with the transition to democracy in South Africa in the
mid-1990s the objective was abandoned.
This policy consensus, albeit of a lowest
common denominator kind, beg an to fragment
with the escalation of civil unrest in South Africa
during the mid-1980s. The question of sanctions
split the EC into the majority that favored extensive sanctions against Pretoria and the minority
(Britain, Germany, and Portugal) that opposed
sanctions on principle. Eventually a consensus
was forged that saw the EC introduce modest
sanctions (after concerted global pressure). But
these sanctions were symbolic rather than punitive. Trade in Krugerrands and in certain iron and
steel products (worth just 3.5 percent of bilateral
trade) was suspended and "new investments" discouraged; the UN ban on oil was upheld, and military, cultural, and technological cooperation
ended. In addition, the EC launched Special Programs for the Victims of Apartheid, whose funding grew from a modest ECU 10 million to ECU
110 million before the multiracial elections of
1994, after which funding was switched to a more
general reconstruction and development program.
With the release of Nelson Mandela from imprisonment in February 1990, the EC began the
difficult process of redirecting its foreign policy
from sanctions toward the creation of normal bilateral relations. Over the next three years sanctions were progressively lifted as South Africa
moved toward democratic constitutional reform.
Just as with their imposition, sanctions had to be
removed by consensus; again, there were divisions
between member states over the appropriate speed
of doing so.
In November 1993 South Africa was selected
as one of the first five CFSP joint actions. The
untested and experimental nature of CFSP meant
that South Africa therefore became more than
simply a question of policy effectiveness; it became a test case for the success of the CFSP itself.
The joint action had three separate elements: election monitoring, development assistance, and the
establishment of a long-term cooperation framework. Just as was the case with sanctions under
EPC, there were divisions within the member
states on the appropriate scope of these measures.
Election monitoring was an innovation for the EU
and, given its untried nature, proved worthwhile

5paak, Paul-Henri (1899-1972)

despite some organizational problems. A total of

307 election observers were deployed, plus a further 112 advisers and security personnel with
funding totaling almost ECU 10 million. The EU
has since become increasingly involved in this
type of international activity, complementing the
role played by the UN.
Deve10pment assistance built on the experience of the earlier Special Programs, with a fiveyear (1994--1999) comrnitment of ECU 110 million per annum to fund projects throughout the
country. The major areas covered are education
and training, agriculture, good governance, rural
health, and local community development.
Establishing a longer-term bilateral relationship has been the most difficult challenge and one
that has been undertaken outside the scope of joint
action. Although initial progress was made with
the signing of a cooperation agreement in October
1994 and the granting of Generalized System of
Preferences (GSP) status, negotiations about closer
economic relations soon stalled. Indeed, by the end
of 1997 the final framework for relations still remained contentious. Two elements were involved.
The first was South Africa's possible inclusion in
the Lome convention: when full membership was
declined, a unique association status was concluded whereby South Africa became a signatory
to a limited range of Lome privileges. Second, the
EU proposed a free trade area between the two
economies, although once again certain exceptions
were suggested in order to protect the South
African side. Negotiations began in 1996 on the
basis of the EU's draft agreement.
In conclusion, South Africa is no longer simply an EPC and CFSP agenda item but has become
a subject of economic and political external relations governed by normal bilateral frameworks.
Over the past two decades the political context of
EU-South Africa relations has evolved fundamentally. However, the economic context may continue
to sour an otherwise positive re1ationship.
See also COMMON FOREIGN AND SECURITY
POLICY; EUROPEAN POLmCAL COOPERATION.

Bibliography

Holland, Martin. 1988. The European Community and

South Africa. London: Pinter.
- - -. 1995a. "Bridging the Capability-Expectations
Gap: A Case Study of the CFSP Joint Action on
South Africa." Journal of Common Market Studies
33, no. 4 (December), pp. 556--572.

429

- - - . 1995b. European Union Common Foreign Policy: From EPC to CFSP Joint Action and South
Africa. London: Macmillan.

-Martin Holland

Spaak, Paul-Henrl (1899-1972)

Paul-Henri Spaak's nickname, "Mr. Europe," attests to his leading role in the postwar movement
for European integration. Before the war, Spaak
had been prominent in Belgian politics, having
served as a government minister since 1935, including a brief speIl in 1938 and 1939 as Belgium's first Socialist prime minister. While in
govemment Spaak had championed Belgium's
neutrality and sought to keep his country out of
the coming conflagration. But Belgium's ignominious capitulation in May 1940 and the ensuing
four years of German occupation, which Spaak
spent in exile in London, radically altered his international outlook. Thereafter Spaak was a firm
believer in both international alliances and European integration.
In the immediate postwar years, Spaak was
variously prime minister and foreign minister of
Belgium, sometimes simultaneously. At the same
time, he became increasingly prominent on the
European scene, first as chairman of the newly
founded Organization for European Economic
Cooperation, then as president of the Consultative
Assembly of the Council of Europe. He was also a
leading supporter of the Schuman Plan to establish the European Coal and Steel Community and
the Pleven Plan to establish the ill-fated European
Defense Community.
Spaak's greatest contribution to the EC came
when he chaired the intergovernmental conference
(IGe), launched after the Messina Conference in
June 1955, to draft plans for further European integration. Spaak was weIl suited by reputation,
temperament, and conviction to direct the difficult
negotiations. As chairman of the IGC, which
opened in Brussels on June 26, 1955, but began in
earnest in the fall, Spaak steered the work of the
various committees and subcommittees that
drafted specific parts of the final proposal.
Spaak's report, presented to his fellow foreign
ministers at a meeting in Venice in May 1956, proposed that the two objectives of sectoral (atomic
energy) integration and wider economic integration (a common market) be realized in separate or-

430

Spaak Report

ganizations, with separate treaties. The Venice foreign ministers' meeting marked the end of the first
stage of a protracted process of intergovernmental
negotiations, which culminated in the signing of
the Treaties of Rome in March 1957, establishing
the European Atomic Energy Community and the
European Economic Community.
Spaak: continued as Belgian foreign minister
well into the 1960s, interrupted by a speil as secretary-general of NATO between 1957 and 1961.
His later years as foreign minister and as a leading
advocate of European integration were marred by
aseries of eIashes with French president Charles
de Gaulle, first over de Gaulle's veto of Britain's
EC membership application in 1963, then over the
Empty Chair Crisis of 1965-1966. Dejected by de
Gaulle's cavalier treatment of his EC partners,
preoccupied in the early 1960s with Belgium's
problems in the Congo, and increasingly distracted by his country's linguistic quarrels, Spaak
left public office for the last time in 1966.
See also BELGIUM.

Spaak Report

See

SPAAK, PAUL-HENRI.

Spaln
As a result of General Franco's victory in the
Spanish Civil War and his support for the Fascist
regimes in Germany and ltaly, Spain took no part
in the international agreements on political and
economic cooperation at the beginning of the
post-World War 11 era. Spain was not invited to
participate in the creation of the UN and indeed
was censured by the new international organization in 1946. The country had no representation at
the founding of the International Monetary Fund
(IMF) and the World Bank; nor was it admitted to
the Organization for European Economic Cooperation (OEEC), the Council of Europe, or the three
European Communities. In the immediate postwar
years, Spain was exeIuded across the board from
the process of European cooperation and integration.
Only gradually did Spain become less isolated. The military and economic co operation
agreement signed with the United States in September 1953 was instrumental in the country's admission to the UN in December 1955 and to the
OEEC-later the Organization for Economic Co-

operation and Development (OECD)-as a full

member in January 1959. Astabilization plan later
that year transformed the Spanish economy, marking the end of national economic autarky and the
beginning of economic cooperation with the rest
of the world.
The changing political eIimate prompted
Spain to seek eIoser links with the Ee. A substantial volume of trade with the EC, and the EC's implementation of the Common Agricultural Policy,
were the main reasons why Spain sought a rapprochement. In February 1962 the Spanish government wrote to the Council presidency stating
its wish to negotiate an association agreement that
could lead to the country's eventual accession.
Spain's approach met a hostile reaction from
the European movement in general and from political groups and trade unions in particular, who
fIrmly opposed the entry of a dictatorship into the
EC. The 1962 congress of the European Movement adopted aresolution supporting this position, and the EC did not respond to the Spanish
government's letter. In June 1964 Spain wrote
again with a proposal for negotiations only on
economic maUers, with no preconditions. In a
spirit of pragmatism on both sides, negotiations
took place and led to the signing of a preferential
trade agreement (PTA) between Spain and the EC
in June 1970.
The PTA's ultimate aim was to set up a freetrade zone or a customs union at the end of a
lengthy two-phase period, a fundamental requirement of the GATT regulations on preferential
trade agreements. The obligations laid down by
the PTA were asymmetrical: the EC reduced its
average tariffs on industrial products by 65 percent (three-quarters of this reduction to be implemented in the first fifteen months) and Spain by
25 percent over the six-year period agreed to for
the first phase. In agricultural trade Spain obtained
tariff concessions for $262 million of its exports
(out of a total of $365 million); at the same time,
tariff concessions in the other direction were virtually nonexistent (Bassols, 1995). This agreement
provided a great boost to the Spanish economy,
and although it contained no explicit political
comrnitment for the country's entry to the EC, it
perrniued real economic integration via the expansion oftrade and paved the way for Spain's formal
accession at a later date.
Between 1970 and 1984 the volume of Spain's
exports to the EC grew in real terms by 355 per-

Spain
cent; the Community received 49 percent of Spain's
total exports in 1984, compared with 36 percent in
1970 (although it should be noted that the number
of EC member states increased from six to ten during those years). Over the same period, Spain's imports from the EC grew by 109 percent, representing 33.4 percent of the total in 1984 as compared
with 32.9 percent in 1970. lbis unequal evolution
of exports and imports meant that Spain's trade
deficit in 1970 (at the time of the signing of the
PfA) had turned into a trade surplus by 1984.
Spain presented its application for EC membership in July 1977, two years after Franco's
death and soon after the first democratic elections.
Spain's application was supported unanimously
throughout the nation by all political parties represented in parliament, by public opinion, and by
employers' associations and trade unions. This
unanimity was due largely to the symbolic appeal
that the idea of Europe held for the Spanish: political freedom, democracy, and the end of the isolationism that the country had endured since the loss
of its empire.
The negotiations that began formallyon February 5, 1979, proved to be long and complicated.
One ofthe main obstaeles to Spain's entry was the
reticent attitude of the French, who were concerned about competition from Spain's Mediterranean agricultural products. Another was the demand expressed by many countries that Spain join
NATO. Negotiations with the EC were completed
in March 1985, and the treaty of accession was
signed on June 12, 1985. Following its ratification
Spainjoined the EC on January I, 1986.
In the treaty of accession, Spanish industry obtained advantageous treatment. With the exception
of tariffs on certain sensitive areas, for example,
cars and iron and steel products, tariffs on Spanish
industrial exports were to be phased out over seven
years, whereas those on EC exports to Spain were
to be dismantled over a longer period. On the other
hand, Spain had to make considerable concessions
in agriculture and fishing, sectors in which the
country held a competitive advantage.

Costs and Benefits of Membership

Ten years on, the positive impact of EU membership on the Spanish economy can be seen in terms
of improved foreign trade and inward investment
and in both nominal convergence-the criteria for
Economic and Monetary Union (EMU)-and real
convergence-the income gap and unemploy-

431

me nt. However, two points should be borne in

mind: (1) during those ten years, both Spain and
the other member states experienced periods of
expansion (1986-1990), recession (1991-1993),
and expansion again (since 1994); and (2) fundamental changes in the process of European integration affected Spain even more than most member states. Specifically, the single market program
constituted a greater challenge to the Spanish
economy (as far as liberalizing was concerned)
than the comrnitments undertaken at the time of
EC membership, and EMU poses a serious challenge to Spain in its efforts to match the economic
performance of the more advanced member states.
With respect to trade, liberalization opened
Spain not only to the European market but to the
rest of the world as weIl. lbis was true for imports
as weIl as exports. Indeed, a marked growth of imports in all sec tors of the economy affected the
trade balance (Spain's trade deficit reached 3 percent of GDP in 1992). lbis imbalance was heavily
influenced by the overvaluation of the peseta between 1989 and 1992 but was corrected with three
devaluations in 1992 and 1993, which reduced the
trade deficit in terms of GDP in 1994 and 1995.
The trade deficit was also compensated for by
direct foreign investment, mainly from other
member states, which reached its peak in 1993
(accounting for 1.44 percent of GDP and 22.1 percent of gross capital formation in that year). Just
under 44 percent of direct investment was in industry, and 54 percent was in service sectors, principally in finance (Duce, 1995).
In 1995, Spain did not meet any of the nominal convergence criteria for EMU. Accordingly, in
1996 Spain prepared a convergence plan that
aimed to bring the country inside the limits for
participation in EMU by 1999. Although Spain
made a great effort in this direction, the fact that it
met none of Maastricht's nominal convergence
criteria as recently as 1997 indicated that adaptation to EMU has been and will be a laborious
process.
If we measure real convergence in terms of
Spain's per capita GDP and employment rate in
relation to the EU's, it is striking that between
1985 and 1991 Spain's GDP came elose to the EU
average (before being adversely affected by the
currency crisis of 1992-1993), whereas unemployment in Spain skyrocketed (rising to 22.8 percent in 1995). Spain's unemployment is the highest in the EU; indeed, it is almost twice the EU

432

Spain

average. Lack of flexibi1ity in the Spanish labor

market means that firms wishing to improve their
productivity and compete in the EU marketp1ace
and beyond must do so by reducing manpower
and rep1acing it with machinery.
On the positive side, in the ten years since entry Spain has enjoyed a net transfer of EU funds
(with the sole exception of 1986), mainly from the
structura1 and cohesion funds. In the 1990--1994
period the balance in Spain's favor varied between
0.5 and 0.7 percent of the country's GDP.
Overall, entry to the EU has he1ped modemize the Spanish economy, but the cost of the adaptation process has been high in many sectors,
which have had to face increased competition. The
effect of this competition can be seen in the higher
rise of imports over exports. The substantia11eve1s
of investment from abroad, especial1y from within
the EU, have stimu1ated domestic investment, increased income, and contributed to updating production capacity. From the perspective of nominal
convergence, the results have been insufficient; as
for real convergence, progress has been limited in
terms of income and negative in terms of emp10yment. However, the results might have been better
had the country's economic po1icy been more
suited to the needs of the export sectors.
Conc/usion

Spain's active participation in the process of European integration began with the negotiation of the
Treaty on European Union (TED) and with the en1argement of the EU from twe1ve to fifteen members. During the 1991 intergovemmenta1 conference, Spain proposed the concept of EU citizenship
and the introduction of a cohesion fund to he1p
poorer member states meet the criteria for EMU.
During the 1994 enlargement negotiations, Spain
obtained a number of concessions concerning fishing (increased access to fishing grounds and reduction of the transition period for Spanish fishing to
January 1, 1996) and, together with Britain, negotiated the Ioannina agreement on the size of the
blocking minority (with respect to qualified majority voting) after enlargement.
Spain also won areduction of some of the
transition periods established in the accession
agreement: apart from fishing policy, the time
limit for the free circulation of Spanish vegetables
and fruits was reduced by three years, and the
limit for the free circulation of Spanish workers by
one year.

Other important Spanish contributions include greater EU cooperation with Latin America
and with the Mediterranean nonmember states.
Political dialogue with Latin America has been institutionalized; cooperation agreements have been
set up with practically all Latin American countries, and a trade agreement has been signed with
MERCOSUR (the Southem Cone Common Market). EU development assistance for Latin America increased from ECU 37 million in 1985 to
ECU 367 million in 1995. The Euro-Mediterranean Conference, held under the Spanish presidency in Barcelona in November 1995, reinforced
political dialogue and the prospect of creating a
free trade zone in the entire Mediterranean region.
Under the terms of the Barcelona agreement, EU
aid for the Mediterranean nonmember states will
practically double between 1996 and 2000, reaching a total of ECU 5 billion.
Despite these achievements, there is as yet
little understanding in Spain of what the EU really
means. Except in sec tors in which EU policies
have caused problems (for instance, in fishing and
in some agricultural sectors), the average citizen's
perception of his or her relationship with the EU is
limited. This situation will change with time as the
idea of collective identification with the EU begins to take hold. In the meantime, a number of
factors are contributing to this general development: daily business with other enterprises in the
EU, student exchanges with other universities in
the EU, participation in numerous EU projects,
and the positive impact of structura1 policy.
See also TABLE 6; APPENDIX 2; ApPENDIX 3;
APPENDIX 7; APPENDIX 8.
Bibliography
Bassols, Raimundo. 1995. Espaiia en Europa: Historia
de la Adhesi6n a la CE, 1957-1985. Madrid: Camara de Comercio.
Dluhosch, Barbara. 1996. On the Fate of Newcomers in
the European Union: Lessons from the Spanish Experience. Working Paper 9603. Madrid: Bank of
Spain.
Duce, Maitena. 1995. "EI impacto de la integraci6n en
la UE sobre la inversi6n intemacional directa en Espana." Papeles de Economfa Espanola, no. 63, pp.
192-208.
Galy, Michael, Gonzalo Pastor, and Thierry Pujol. 1993.
Spain: Converging with the European Community.
Occasional Paper 101. Washington, DC: International Monetary Fund.
Ministerio de la Presidencia. 1995. Espaiia en la Uni6n
Europea. Diez anos desde la firma dei tratado de

Spinel/i, Altiero (7907-1986)

Adhesi6n. Madrid: Imprenta Nacional dei Boletfn
Oficial dei Estado.
Tamarnes, Ram6n. 1994. La Uni6n Europea. Madrid:
Alianza Editorial.

-Joaquim Muns

Special Negotlatlng Body (SNB)

The controversial European Works Council Directive includes a provision for the formation within
transnational companies of a Special Negotiating
Body (SNB) on the initiative of employee representatives or management. The SNB is designed
to negotiate either an information and consultation
procedure or a full-fledged European Works
Council within the company.

Speclflc Actlons for Vigorous

Energy Efflclency (SAVE)
Specific Actions for Vigorous Energy Efficiency
(SAVE) is an EU program to promote energy efficiency, reduce consumption, and encourage the
convergence of member state energy policies.
SAVE I (1991-1995) and SAVE 11 (1996-2000)
include initiatives to establish technical standards
and specifications relating to energy conservation,
develop information networks to help coordinate
member-state actions and policies, and improve
the production and supply of electricity.
See also ENERGY POLICY.

Spierenburg Report

In 1979, Commission president Roy Jenkins asked

Dirk Spierenburg, a Dutch diplomat and a former
member of the European Coal and Steel Community's High Authority, to chair a committee on reform of the Commission. In September of that
year, Spierenburg presented areport entitled "Proposals for Reform of the Commission of the European Communities and Its Services." The socalled Spierenburg Report made a number of
timely proposals, including reducing the number
of commissioners, rationalizing Commission portfolios, and improving communication and coordination among the Commission's directorates-general (departments). Despite Jenkins's enthusiasm
for the report, few of its recommendations were
ever adopted. Indeed, the 1996-1997 intergovernmental conference grappled with many of the is-

433

sues addressed by Spierenburg nearly twenty

years earlier.
See also COMMISSION.

SpinellI, Altlero (1907-1986)

Altiero Spinelli, a former commissioner (19701976) and member of the European Parliament
(EP), was a leading European federalist. His involvement in the movement for European integration began during World War 11, when he was exiled to the Italian island of Ventotene for his
antifascist activities. There, in 1940 and 1941,
Spinelli drafted a manifesto for a "free and uni ted
Europe." Following his release after Mussolini's
ouster in 1943, Spinelli founded the European
Federalist Movement in Milan. He then traveled
secretly to Switzerland for a meeting of European
Resistance representatives. Out of that meeting,
held in Geneva in June and July 1944, came the
Draft Declaration of the European Resistance,
which included a call for a "Federal Union among
the European peoples."
In the postwar years, Spinelli became a leading
figure in the European movement. At horne in ltaly,
he pursued a political career in the Action Party, of
which he was a founding member and secretarygeneral until 1962. In the mid-1960s he founded
and directed the prestigious Institute for International Affairs in Rome before becoming an adviser
to the Italian foreign minister in the late 196Os.
In 1970 Spinelli became a commissioner, but
he left Brussels unexpectedly in 1976 to join the
EP as an independent Communist. Not only was
his political affiliation surprising-Spinelli had
broken with communism as early as 1937-but bis
decision to become a member of the then relatively
powerless EP seemed unwise. But Spinelli was positioning hirnself to become an influential figure in
the first directly elected Parliament. Indeed, he interpreted the results of the first direct elections,
held in June 1979, as a mandate to launch a constitutional revision of the EC. He and like-minded
Europarliamentarians became known as the Crocodile Group, because of their habit of meeting in the
Crocodile Restaurant during plenary meetings of
the EP in Strasbourg. The Crocodile Group pressed
successfully for the establishment in the EP of an
Institutional Affairs Committee, which in turn
wrote the Draft Treaty Establisbing the European
Union that was passed by the whole house on February 14, 1984.

434

SPRINT

Although Spinelli tended to be idealistic and

unrealistic, the Draft Treaty was a pragmatic document that sought to shame the member states into
reviving the EC's flagging institutional framework. To a great extent, Spinelli's tactic worked.1t
coincided with a number of related developments-the Genscher-Colombo proposals, the recent accession of Greece and the impending accession of Spain and Portugal, and growing
interest in European business circles for the establishment of a single market-that together accounted for the EC's resuscitation in the mid1980s, a resuscitation epitomized by the Single
European Act.

SPRINT
See

STRATEGIC PROGRAM FOR INNOVATION AND

TECHNOLOGY TRANSFER.

STABEX
See

SYSTEM FOR THE STABILIZATION OF EXPORT

EARNINGS FROM PRODUcrS.

Stablllty and Growth Part

At the Dublin summit of December 13 and 14,
1996, Germany successfully pushed the other
member states to approve a tough budgetary agreement-the Stability and Growth Pact-for the future euro zone that threatens near automatic penalties for countries running excessive budget deficits
(above 3 percent of GDP). Germany had wanted
automatic penalties to apply but softened its position slightly in the face of stiff French opposition.
Nevertheless Theo Waigel, Germany's finance
minister, claimed after the summit that the pact
was a credible signal that the euro would be a hard
currency.
Under the pact, euro countries running an excessive deficit will be exempt from penalties in the
event of a natural disaster or if they experience a
drop in GDP of at least 2 percent over a year (such
a recession has happened only thirteen times in
any of the member states over the past thirty
years). In cases where GDP falls between 0.75
and 2 percent, finance ministers will have discretion as to whether to impose penalties. Penalties
consist of an interest-free deposit of a fixed
amount with euro-zone authorities, representing

0.2 percent of GDP, and a variable amount determined by the extent to which the reca1citrant
member state exceeded the 3 percent ceiling. The
total amount could be as much as 0.5 percent of
GDP. If the deficit remains excessive, the deposit
becomes a fine at the end of two years. Although
necessary to signal the member states' commitment to a strong euro, the pact demonstrates the
potential divisiveness of Economic and Monetary
Union (EMU), both before and after the launch of
Stage 3 (the irrevocable fixing of exchange rates).
France resisted the pact before and during the
Dublin summit because it reinforces the impression that EMU is irnposing a "fiscal straitjacket"
that is destroying jobs. Indeed, France's new Socialist prime minister sought to reopen discussion
of the pact at the Arnsterdam summit on June 16
and 17, 1997, but succeeded only in having the
European Council adopt a separate resolution on
growth and employment stressing the member
states' determination to keep employment firrnly
at the top of the political agenda of the EU. Also,
the European Council decided to hold an extraordinary meeting in Luxembourg on November 21
and 22, 1997, to review initiatives concerning jobcreation, small and medium-size enterprises, a
new Competitive Advisory Group, and so on.
These concessions to the French govemment
made it possible for the European Council to
adopt a resolution on implementation of the pact
and to get on with its main task at the Arnsterdam
summit: concluding the Arnsterdam Treaty.
See also ECONOMIC AND MONETARY UNION:
TOWARD A SINGLE CURRENCY.

Stablllty Part (tor Central and

Eastem Europe)

See BALLADUR PLAN.

Standards and
Contormlty Assessment
Product standards play an essential role in ensuring
free circulation of goods within the single European market. Industries develop voluntary standards through member-state and European standards bodies such as the European Standards
Committee (CEN) and the European Electrotechnical Standards Committee (CENELEC) to ensure
product quality and compatibility. In addition, gov-

Standards and Conformity Assessment

ernments mandate some technical product standards (e.g., for automobiles) to protect consumer
and worker health and safety. When these standards
are inconsistent or incompatible across member
states, they create technical barriers to trade.
The Treaty of Rome generally prohibits technical barriers to trade except for legitimate health
and safety reasons. Traditionally, the Comrnission
attempted to deal with these exceptional categories through approximation or harmonization of
member-state standards to produce single mandatory EC standards, ultimately adopting over two
hundred directives setting out uniform individual
product standards. This proved a slow and cumbersome process, however. As a result, technical
trade barriers tended to proliferate as memberstate regulation outpaced EC harmonization.
Moreover, member-state mIes such as product
identity standards for traditional foodstuffs (e.g.,
the centuries-old German mIes lirniting perrnissible ingredients in beer or Italian regulations mandating use of dumm wheat in pasta), although
only tenuously related (if at all) to health or safety
concerns, further fragmented the market.
In Febmary 1979, alandmark Court of Justice (ECJ) decision gave the Commission the
means to resolve this vexing problem. The Court
struck down a prohibition on imports of Cassis de
Dijon, a French liqueur, into Germany, which had
claimed that the liqueur did not meet national requirements for minimum alcohol content. The
ECJ held that Germany could not discriminate
against products from other member states that
met basic health and safety standards set in those
states, thus reading into the treaty a requirement
for mutual recognition of health, safety, and other
technical standards.
The Commission recognized in this important principIe a new means of eliminating the
backlog of work in the area of sectoral harmonization and of freeing the internal market from the
growing burden of technical barriers resulting
from member-state product regulation. In its 1985
white paper on completing the single market, the
Comrnission outlined a new strategy for elirninating technical barriers to trade. Included in the new
strategy were (1) mutual recognition by member
states of each others' health and safety regulations, ensuring the free circulation in the EC of
products meeting any member state's basic requirements; (2) Community technical mIes for

435

certain products (e.g., toys, medical devices) laying down essential health and safety requirements
binding on all member states; and (3) a gradual
shift of the standards-making process from national standards bodies to European organizations
such as CEN and CENELEC, ending the proliferation of national standards and simplifying the
market for producers and consumers alike.
Under this "new approach," the Comrnission
shifted its energies from the task of laying down
detailed technical standards (except in some areas
such as the automotive sector) to laying out general "essential requirements" that products must
meet in order to circulate freely. Member states
would be prohibited from going beyond these essential requirements in their nationallegislation.
Manufacturers may demonstrate compliance in
three ways: (1) by proving that their product meets
the essential requirements themselves, (2) by
demonstrating compliance with a national standard elaborating on the requirements in the relevant directive, or (3) by demonstrating compliance
with a European Norm (EN) pertaining to those
requirements. As a practical matter, most producers choose to demonstrate compliance through adherence to a national standard or EN. The task of
developing ENs to complement the new-approach
directives fell to the established EC-wide standards bodies CEN and CENELEC as weIl as to
the European Telecommunications Standards Institute (ETSI), a new body established to develop
standards for the telecommunications and information technology sectors.
Conforrnity assessment-procedures for deterrnining whether products in fact meet the required standards, such as testing and certification-is a critical element of the system. Here,
too, member state practices have varied greatly.
For example, certain products would be subject to
governmental approval in certain countries and
not in others; likewise, some governments would
allow companies to do their own testing, whereas
others would require results from an independent
laboratory. As a corollary to the new-approach
method of regulating products, the Comrnission
developed mIes for demonstrating conforrnity to
new-approach directives or the pertinent European
or national standards.
This so-called global approach laid down a
number of methods for demonstrating conforrnity,
based large1y on the degree of risk posed to the con-

436

5tanding Committee on Agricu/tura/5tructures

sumer by potentially faulty products. For example,

producers of relatively simple products such as toys
may state their compliance through a "manufacturers' declaration of confonnity." At the other end of
the scale, complex and risky devices such as heart
pacemakers are subject to more elaborate means of
assessing conformity, involving government-approved testing and certification bodies. Under this
approach, any directive laying out essential product
requirements must also specify the steps producers
must take to show compliance with these requirements. Each member-state government must produce a list of so-called notified bodies whose testing and certification of products are deemed
acceptable to ensure confonnity to a given directive. These bodies can include government agencies, quasi-public organizations, or private laboratories, depending on the country and the product.
Products passed by these bodies may bear the CE
mark (where the directive allows that) and are ensured free circulation within the single market.
Even though this system simplified matters
for intemal producers, it raised problems for imported goods, some of which had previously entered the market on the basis of approvals in the
EU markets under agreements between third countries and individual member states. The Commissi on therefore opened negotiations with non-EU
governments to try to arrive at sector-specific Mutual Recognition Agreements (MRAs) under
which the EU would allow imported products approved in their horne countries to be sold freely in
their domestic markets without having to undergo
further conformity assessment, and the non-EU
governments would do the same for EU products.
Although the Commission has reached agreements
on some products with some trading partners (e.g.,
Singapore), negotiation of MRAs with the United
States, among others, has proved arduous and time
consurning, in part because of vastly different and
often incompatible approaches taken to product
regulation in such areas as the role of public versus
private bodies, statutory requirements for domestic
govemment approval, or specific criteria for approval. In some sectors, such as pharmaceuticals,
some governments have undertaken efforts to establish the groundwork for uniform approval criteria; however, such efforts require enormous technical preparation and are likely to bear fruit only
over the medium to long term.
See also REGULATORY POLICY; SINGLE MARKET PROGRAM.

Standlng Commlttee on
Agrlcultural Structures
The Standing Comrnittee on Agricultural Structures was established in 1962, with the launch of
the Common Agricultural Policy (CAP), to prepare meetings of the council of agriculture ministers. As part of an effort to emphasize rural development rather than simply income support within
the CAP, the committee changed its name in 1988
to the Committee on Agricultural Structures and
Rural Development (STAR).
See also COMMON AGRICULTURAL POLICY.

STAR

See

COMMITIEE ON AGRICULTURAL STRUCTURES

AND RURAL DEVELOPMENT.

StateAlds
Under the EU's competition policy, governments
are generally prohibited from subsidizing industries and enterprises (i.e., providing state aids),
thereby giving them an unfair advantage in the
Enropean marketplace.
See also COMPETITION POLICY .

Statlstlcal Office of the

European Communltles
(EUROSTAT)

The Statistical Office of the European Communities (EUROSTAT) is a unit within the Commission charged with collecting and publishing statistics on a wide range of social and economic
issues, primarily for use by the Commission itself.
EUROSTAT's product is highly reputable and
widely disserninated in EU publications and databases.

Strasbourg
Strasbourg is known as the horne of the European
Parliament (EP), although the EP holds only some
of its plenary sessions (lasting usually four days
each month) there. In the late 1940s, the founding
states of the Council of Europe decided to locate
its assembly in Strasbourg, a frequently foughtover city on the border between France and Germany. This was intended both to keep the assembly away from anational capital and to symbolize
European reconciliation. Later, the founding

StructuralDialogue

members of the EC followed suit and placed the

EP there also. As the EC revived and flourished in
the 1980s, many Europarliamentarians regretted
the choice of Strasbourg, located over two hundred miles from the Commission and Council of
Ministers' Secretariat in Brussels, as the Parliament's seat. For them, Strasbourg came to symbolize not Franco-German reconciliation but the
obscurity and relative unimportance of their own
institution.
See also EUROPEAN PARLIAMENT.

Strategie Program for

Innovation and Teehnology
Transfer (SPRINT)
The Strategic Program for Innovation and Technology Transfer (SPRINT) ran from 1989 to 1994,
under the auspices of the EC's research and technological development program. SPRINT's significance was more political than technological: it
helped build confidence and cooperation between
the Commission and European manufacturers in
the high-technology sector and contributed to the
positive climate in which the single market program was launched.

Stresa Conferenee
Representatives of national govemments and
farmers' organizations met in Stresa, ltaly, in July
1958 to launch the Common Agricultural Policy
(CAP).
See also COMMON AORICULTURAL POLICY.

Structural Funds

See

COHESION POLICY; STRUCTURAL POLICY.

Structural Pollcy
Structural policy is one of the means by which the
EU promotes cohesion: the goal of reducing economic and social disparities between developed
and underdeveloped regions. The EU's three redistributive structural funds are the European Social Fund (ESF), the European Regional Development Fund (ERDF), and the guidance section of
the Common Agricultural Policy's European Agricultural Guidance and Guarantee Fund (EAGGF).
The European Investment Bank (EI) and part of
the European Coal and Steel Community's budget

437

are additional instruments with structural policy

objectives.
Structural policy developed slowly in the
EC's history but received a significant boost when
Greece, Spain, and Portugal--countries whose
economic level was well below the EC averagejoined in the 1980s. As part of an implicit bargain
struck in relation to the single market program between the richer and poorer member states, the
Single European Act (1986) contained a commitment to economic and social cohesion. Accordingly, in February 1987 the Commission proposed
reform of the structural funds and a doubling in
real terms of the resources available through them
(this was a key element of wh at later became
known as the Delors I budgetary package). Having
agreed in February 1988-after a bitter political
battle-to double the combined size of the structural funds, in December 1988 the Council radically revised the EC's structural policy by introducing a number of new principles and procedures
and strengthening existing ones. For instance, new
functional and geographic concentrations restricted structural fund assistance to five priorities:
assisting regions whose development is lagging
(Objective 1); assisting declining industrial areas
(Objective 2); combating long-term unemployment (Objective 3); adjusting the workforce to industrial changes (Objective 4); and adjusting agricultural structures (Objective 5). The post-Treaty
on European Union Delors 11 budgetary package
(1992) included an additional, substantial increase
in the size of the structural funds and introduced
new priorities for regions dependent on fishing
(Objective 5[a]-fisheries) and support for certain
rural areas (Objective 5 [b]). As a result of the accession of Finland and Sweden, the EU created
another new priority (Objective 6) for the development of regions in those countries with very low
population densities. In its Agenda 2000 report of
July 1997 on enlargement, policy reform, and the
budget, the Commission proposed reducing the
structural fund objectives from seven to three: a
strengthened Objective 1, a redefined Objective 2,
and a new Objective 3 (developing a strategy for
human resources).
See also COHESION POLICY.

Structured Dlalogue
As part of a preaccession strategy to facilitate enlargement ofthe EU, the European Council, meet-

438

Stuttgart Declaration

ing in Essen in December 1994, decided to launch

a "structured dialogue" between the EU and the
associated states of Central and Eastern Europe.
The structured dialogue is implemented through a
program of meetings of environment, transport,
justice, foreign, and other ministers, as well as annual meetings of heads of state and government on
the margins of a European Council.
See also CENTRAL AND EASTERN EUROPEAN
STATES.

Stuttgart Declaratlon
See

cused on the role of the citizen, individually and

collectively, in the building of the state. Subsidiarittsprinzip suggests that there are mutual and
comprehensive obligations between the state and
the individual on behalf of the whole society, and
these can be written down. In modern Germany,
"neo-liberalism, Roman Catholic social doctrine
and the Protestant social ethic have each drawn on
the concept of subsidiarity" (Wilke and Wallace,
1990, p. 16). The German Basic Law (constitution) does not use the term, but the relationship
between the Lnder (states) and the federal government cannot be understood without it.

SOLEMN DECLARATION ON EUROPEAN UNION.

Subsldlarlty
Federalism apart, there is no idea in European integration studies that has sparked and sustained
debate on such ascale as subsidiarity. This is not
coincidental, as the two concepts are c10sely related. Subsidiarity guides federalism and is fostered by it. Subsidarius helps those bound together
by foedus. The Roman Catholic Church developed
a social doctrine of subsidiarity, whereby society
should give help (subsidium) to its weaker members but take care to preserve their self-respect and
autonomy (Pope Leo XIII's 1891 Rerum Novarum, quoted in O'Brien and Shannon, 1995).
Writing from the heart of fascist Italy in 1931,
Pope Pius XI warned: 'just as it is wrong to withdraw from the individual and commit to a group
what private enterprise and industry can accomplish, so too it is an injustice, a grave evil and a
disturbance of the right order, for a larger and a
higher association to arrogate to itself functions
which can be performed efficiently by smaller and
lower societies" (O'Brien and Shannon, 1995).
Subsidiarity therefore carries the connotation of
solidarity among different c1asses of society-a
concept that influenced, among others, the leftwing Catholic Jacques Delors, who became Commission president in 1985 (Grant, 1994).
Although the term subsidiarity itself was
rarely used in English or French, the rich discourse among federalist thinkers such as Mill,
Proudhon, and Marc about how the state should
exercise its functions at the lower level was informed by the principle of subsidiarity. It may be
argued that the British contributed mainly to the
idea of liberal democracy and the French mainly
to nationhood, but it was the Germans who fo-

Subsidiarity and European Integration

Once the scale and scope of European integration
had moved beyond the customs union and commercial policy, with common policies for coal,
steel, and agriculture, the EC began to take on a
discernible constitutional character. By the mid1970s French president Charles de Gaulle was
long gone and Britain had joined the Community.
The Community, by then equipped with its financial own resources and new regional and social
policies and planning direct elections to the European Parliament (EP), had begun to contemplate
Economic and Monetary Union (EMU). An enquiry was set up, under the chairmanship of the
federalist Belgian prime minister Leo Tindemans,
to look into the question of institutional reform. In
its submission to Tindemans, the Commission
proposed that a new constitution should be drawn
up to found "European Union." It continued: "European Union is not to give birth to a centralizing
super-state. Consequently, and in accordance with
the principe de subsidiarite, the Union will be
given responsibility only for those matters which
the Member States are no longer capable of dealing with efficiently.... Hence, the competence of
the Union will be limited to what is assigned to it,
meaning that its fields of competence will be specified in the Act of Constitution, other matters being left to the Member States .... Of course, in deciding on the Union's competence, application of
the principe de subsidiarite is restricted by the
fact that the Union must be given extensive
enough competence for its cohesion to be ensured" (Commission, 1975, pp. 10-11).
This was the first official usage of subsidiarity by the Commission, which went on to explain
that-as in German Basic Law (Artic1es 71 and
72)-there were three types of competence: exc1u-

Subsidiarity

sive, concurrent, and potential. With concurrent

powers, the union "would assert its authority only
when it feit the need"-by acting only with regard
to certain aspects or by passing outline legislation
with actions specified for the union and for member-state governments, leaving the latter free to act
in all unspecified maUers. In a telling coda, the
Commission asked how consistency was to be assured between EU and national-level action: "The
answer is that Union law takes precedence over
national law. Clearly, coordination between the
two types of action cannot be provided simply by
legal texts or by establishing procedures: it must
rest at any given time on the balance of the political forces involved" (Commission, 1975, p.ll).
The Tindemans Report suggested that the
building of European union required the adoption
of four criteria to determine change: authority, efficiency, legitimacy, and coherence. It did not repeat the term subsidiarity, nor did it go as far as
the Commission in seeking the exercise of massive new powers at the Union level. But Tindemans still expected that the Union would seize the
initiative when it found member states performing
ineffectively and inefficiently (Commission,
1976).
The Tindemans Report was followed by the
MacDougall Report on fiscal federalism, which
identified three criteria for assessing the involvement of the EC: econornies of scale; transnational
effect; and political, econornic, and social cohesion-aIthough the term cohesion was not used
until the Single European Act (SEA) in 1986.
MacDougall favored transfers of resources between member states and regions, orchestrated
where necessary by the Community, rather than
the development of a large-scale public finance
capability at the European level (Commission,
1977).
The high tide of the federal project, so far,
was the EP's Draft Treaty Establishing the European Union in 1984, whose chief inspirer was the
veteran Italian federalist Altiero Spinelli. It was
here, in the preamble, that subsidiarity was used
for the first time in English: "Intending to entrust
common institutions, in accordance with the principle of subsidiarity, only with those powers required to complete successfully the tasks they
may carry out more satisfactorily than the States
acting independently."
This means, effectively, that the powers of the
EU are subsidiary to those of the member states.

439

Spinelli, indeed, who had been imprisoned by

Mussolini, saw subsidiarity as the way to check
overweening central authority. Articles 11 and 12
of the Draft Treaty sought to define each of the
wide competences of the union as either exclusive,
concurrent, or potential. Where the treaty conferred concurrent competence, member states
could continue to act until the union did so; the
union could act only where it could do so "more
effectively" and particularly where the action had
cross-border effects. (The term virtual competence is perhaps a more accurate expression in
English than concurrent.) The union' s first action
in a new field would take the form of an organic or
framework law under whose auspices member
states would then act to carry out union law
(Capotorti et al., 1986).
The SEA was a lesser creature than the EP
had proposed but represented, nevertheless, a
qualitative leap forward in the federalization
process. It assigned major new competences to the
EC, set the objective of EMU, and in many cases
prescribed decisionmaking in the Council by qualified majority vote. Although the term was not
used, the growing infIuence of the principle of
subsidiarity was plain to see, notably in Article
130r.4 on environment policy, which stated that
the EC "shall take action ... to the extent to which
the objectives ... can be attained better at Community level of the individual Member States."
Concemed about the implications of the single market program and about the growing diversity of the enlarging EC, Delors set up an enquiry
under the distinguished federalist Tommaso
Padoa-Schioppa. The ensuing report applied the
principle of subsidiarity rigorously and recommended systemic reforms in the direction of
greater decentralization of EC policies, more selectivity in the choice of EC responsibilities, and
stronger powers for EC institutions in some key
areas such as monetary policy, competition, and
budgetary control (Commission, 1987). Relentless
harmonization should be checked, even in social
policy, except where there is clear transnational
spillover; EC action should occur only on the basis of a costlbenefit analysis; and the EC should
frame member states' actions but not replace
them.
The Treaty on European Union

The next step, at the instigation of Delors, was to

write subsidiarity into the Treaty on European

440

Subsidiarity

Union (TEU), which also established EU citizenship and a Committee of the Regions to formalize
consultation with regional and local authorities.
During the 1991 intergovemmental conferences,
Valery Giscard d'Estaing had produced areport for
the EP in which he attempted to speil out the distinction between exclusive and shared competence.
He succeeded only in demonstrating the complexity of the European integration process, the rapidly
expanding scope of the acquis communautaire,
and the essential ambiguity of subsidiarity (Giscard d'Estaing, 1990). In the event, the TEU followed the Commission's more pragmatic approach: Article 3b states that "the Community shall
act within the limits of the powers conferred upon
it by this Treaty and of the objectives assigned to it
therein. In areas which do not fall within its exclusive competence, the Community shall take action,
in accordance with the principle of subsidiarity,
only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the
Member States and can therefore, by reason of the
scale or effects of the proposed action, be better
achieved by the Community. Any action by the
Community shall not go beyond what is necessary
to achieve the objectives of the Treaty."
As weIl as adefinition of subsidiarity, therefore, Article 3b contains areaffirmation of the traditional principle of assigned competence and a
fresh definition of proportionality. The implied
tendency to decentralization is reinforced by Article A of the preamble of the treaty, which says that
"decisions are taken as closely as possible to the
citizen." Article B appears to seek to spread the
application of the "principle of subsidiarity as defined in Article 3b" to the achievement of all the
objectives of the EU. In addition, Article K.3.2(b)
provides that the Council may take joint action in
the area of justice and horne affairs "in so far as
the objectives of the Union can be attained better
by joint action than by Member States acting individually on account of the scale or effects of the
action envisaged."
What is curious is that the second sentence of
Article 3b appears to apply subsidiarity only to areas of concurrent competence, whereas the principIe of proportionality or intensity of action (the
third sentence) applies also to the exclusive competence. The inherent ambiguity of subsidiarity is
compounded because, despite the now commonplace nature of the political distinction between the
two, there is no explicit distinction drawn anywhere

in the Treaty of Rome in legal terms between exclusive and nonexclusive competence. Moreover, the
European Court of Justice (ECJ) has tended to take
the view that the EC enjoys full competence in the
pursuit of the objectives of the treaties and that
flanking policies, such as environmental or labor
market policies, are too closely linked to the
achievement of those objectives, notably the creation of the single market, to be anything other than
virtually exclusive too (Toth, 1994).
This raises the question: is subsidiarity really
anything other than a useful rhetorical device?
There is at present a problematic dislocation between what politicians and lawyers think that subsidiarity may be (as weIl as several different political and legal interpretations), but these divergences
should be shrunk over time by decentralization
measures within the EU that are deepening its federal character, on the one hand, and by some clearheaded case law, on the other hand (Emiliou,
1994). Article 3b is justiciable by the ECJ because
it falls under the auspices of the EC (i.e., within the
first pillar of the TEU). But subsidiarity is a general principle of Community law and not directly
applicable, and the Court can be expected to try to
avoid detailed judgements that turn solelyon an interpretation of the second sentence of Article 3b of
theTEU.
Subsidiarity is a useful political expedient,
but it makes sense in practical terms only when
considered together with competence and proportionality. Subsidiarity is not about the allocation of
competences but about how they should be exercised; and it does not affect the balance between
the EU institutions but only between EU and
member-state authorities. And despite much wishful thinking to the contrary, Article 3b refers only
to the EU and member-state govemments and cannot be applied to regional and local govemment
without further treaty amendment to that effect.
After the treaty had been signed, and on the
basis of a draft from the Commission, the European Council, meeting in Edinburgh in December
1992, set out guidelines about how Article 3b
should be applied and also related it to the newly
fashionable concept of transparency (Duff, 1993).
An Amsterdam Treaty protocol on "the application of the principles of subsidiarity and proportionality" incorporated the Edinburgh texts, although subsidiarity had already been articulated in
all the EU's interinstitutional agreements, and its
application certainly affects the behavior of the

Supremacy of EC Law

Commission, where self-restraint in drafting new

legislation now prevails, and the Council, where
all drafts are being put to the subsidiarity test.
Some draft measures have even been withdrawn,
although there has been no large-scale repatriation
of EC law, as many nationalists had hoped.
In summary, the principle of subsidiarity, applied to the EU, should serve to reassure member
states and citizens about their rights. It is a powerful normative concept, and it may be expected to
become an even stronger influence on the evolution of the EU as decentralization proceeds, especially within the big, old states of France, Spain,
and the UK. Intriguingly, subsidiarity may have to
be treated even more variably as the integration
process itself differentiates between a federal core
of member states and an outer tier.
See also COHESION POLICY; FEDERALISM;
TREATY ON EUROPEAN UNION.

Bibliography
Capotorti, Francesco, Meinhard Hilf, Francis G. Jacobs,
and Jean-Paul Jacque. 1986. The European Union
Treaty: Commentary on the Draft Adopted by the
European Parliament. Oxford: Clarendon Press.
Commission. 1975. Report on European Union. Bulletin of the EC, S/5-1975. Luxembourg: Office for
Official Publications of the European Comrnunities.
- - - . 1976. European Union: Report by Mr Leo Tindemans to the European Council. Bulletin of the EC,
Supplement 1/1976. Luxembourg: Office for Official Publications of the European Comrnunities.
- - - . 1977. Report ofthe Study Group on the Role of
Public Finance in European Integration (MacDougall Report). 2 vols. Luxembourg: Office for Official Publications of the European Comrnunities.
- - - . 1987. Efficiency, Stability and Equity: A Strategy for the Evolution of the Economic System of the
European Community (Padoa-Schioppa Report).
Luxembourg: Office for Official Publications of the
European Comrnunities.
Duff, Andrew, ed. 1993. Subsidiarity Within the European Community. London: Federal Trust.
Erniliou, Nicholas. 1994. "Subsidiarity: Panacea or Fig
Leaf?" In David O'Keefe and Patrick M. Twomey,
eds., Legal Issues of the Maastricht Treaty. London:
Wi1ey Chancery Law.
Giscard d'Estaing, Valery. 1990. The Principle of Subsidiarity. Report of the Comrnittee on Institutional
Affairs of the European Parliament, A3-163/90.
Brussels: European Parliament.
Grant, Charles. 1994. Delors: Inside the House that
Jacques Built. London: Nicholas Brealey.
O'Brien, David J., and Thomas A. Shannon. 1995.
Catholic Social Thought: The Documentary Heritage. Mary KnolI, NY: Orbis Books.

441

Toth, A. G. 1994. "A Legal Analysis of Subsidiarity." In

David O'Keefe and Patrick M. 1\vomey, eds., Legal
Issues of the Maastricht Treaty. London: Wiley
Chancery Law.
Wilke, Mare, and He1en Wallace. 1990. "Subsidiarity:
Approaches to Power-sharing in the European Community." RIIA Discussion Papers 27. London: Royal
Institute of International Affairs.

-Andrew Duff

Summlt
Meetings of the EU's heads of state and government, plus the Commission president, are known
as summits. Since the launch of the European
Council in 1974, summits are synonymous with
meetings of the European Council. Summits take
place at least twice a year (at the end of the rotating, six-monthly Council presidency) and in exceptional circumstances can be convened on short
notice.
See also EUROPEAN COUNCIL; APPENDIX 8.

Supranatlonallsm
Supranationalism is a process by which national
governments share sovereignty with transnational
institutions whose laws and policies are binding
on those governments. Majority voting by national
representatives in order to make decisions, an executive authority and parliamentary body independent of national control, and an independent court
whose jurisprudence is binding at the national
level are the most important and distinctive features of a supranational organization. The EU is a
hybrid of supranationalism and intergovernmentalism, with Pillar One (the EC) being primarily
supranational and Pillars Two and Three (the
Common Foreign and Security Policy and Cooperation on Justice and Horne Affairs) being almost
exclusively intergovernmental.
See also INTEGRATION THEORY.

Supremacy of EC Law
In 1964 the European Court of Justice (ECJ)
established the doctrine of the supremacy of EC
law over national law with its landmark Costa v.
Enel decision. Together with the doctrine of direet effect, the doctrine of supremacy transformed
EC law into a powerful mechanism to challenge
the compatibility of national law with EC law,

442

Sutherland Report

thereby involving the ECJ in national policy

debates.
See also EUROPEAN COURT OF JUSTICE.

Sutherland Report
In April 1992, the Commission asked an ad hoc
committee, chaired by former commissioner Peter
Sutherland, to develop a strategy to ensure the
proper functioning of the internal market after
January 1, 1993. Released in October 1992, the
Sutherland Report advocated a number of broad
initiatives-such as more transparency and greater
enforcement-that could apply not only to the internal market but also to general EC legislation.
The report also stressed the importance of subsidiarity, noting the need for balance between
maximizing the role of national and local authorities and avoiding fragmentation of the single market. In December 1992, the Commission responded by promising to follow many of the
report's guidelines and adjuring member states to
improve their administrative infrastructures in order to facilitate enforcement of the single market.
Specifically, the Commission promised to publish
an annual report on the internal market, make
more systematic use of green papers to publicize
contemplated legislation, and consult more with
interested parties. Making good on its promise,
the Commission adopted its first annual report on
the single market (1993) on March 14, 1994.
See also SINGLE MARKET PROGRAM.

Sweden

Sweden joined the EU on January 1, 1995, after

decades of aloofness and vacillation. This longstanding attitude vis-a-vis Europe has at least two
intertwined roots, one geographie and the other
historie al. Sweden's semi-insular position on the
northern periphery of the continent has helped to
keep it at arm's length from European affairs since
the Congress of Vienna in 1815, and this separation in turn fostered a tradition of noninvolvement
in continental conflicts stretching from the early
nineteenth century to the end of the Cold War.
Since most Swedes have viewed this policy of
neutrality as the major reason why the country has
been spared the ravages of war, it was for a long
time difficult to be enamored of the idea of participating in eloser European integration. To this

should be added a new strategie situation following World War 11, when Sweden found itself
wedged between the emerging two superpowers,
one of which faced Sweden at elose range across
the Baltic Sea. Rather than counteracting this latent threat by joining NATO (as Norway and Denmark did), Sweden once more chose neutrality,
now redefined in terms of the Cold War situation
and a strong military defense posture. This, too,
was perceived to hinder any elose integrative links
to a Europe dominated by NATO and covered by
the U.S. security umbrella.
Even though these factors contributed to its
aloofness toward Europe, Sweden is at the same
time a small and highly industrialized country
heavily dependent on international trade and free
access to foreign markets and technology. In the
1960s, when the country's economy still seemed
strong enough to support growth rates sufficiently
healthy to sustain its generous welfare system, the
economic arguments still spoke against eloser European integration. By the early 1970s this situation had changed, and the wealth and welfare
theme contributed increasingly to the more vacillating-indeed, positive-attitude toward Europe
expressed, for example, by Olof Palme when he
became prime minister.
However, the neutrality argument was still allowed to trump the imperatives of economies and
trade, and Sweden instead opted for a free trade
agreement with the EC while remaining a member
of the European Free Trade Association (EFTA).
This situation lasted until the latter part of the
1980s when a new political debate on membership
ensued, in the face of Sweden's increasing dependence on European trading partners heading toward
a single market and eloser union and in view of the
rapidly changing security map of Europe. This reconsideration of Sweden's relationship to Europe
culrninated in October 1990 when, in an economic
crisis package presented to parliament, the Social
Democratic govemment suddenly announced its intention to seek membership in the EC. As a result
both of acute economic stress and the end of the
Cold War, public opinion had at this point shifted
radically in favor of such a move, and neutrality
was no longer viewed as an insuperable problem.
The high tide of pro-European sentiments
did not last into the post-Maastricht period, although the November 13, 1994, referendum on
membership produced a elear majority (52.3 per-

Switzerland

cent) in favor. With the governing Social Democrats split down the middle, the right-of-center
parties played a pivotal role in the referendum's
outcome. Sweden's 1995 elections to the European Parliament further underlined this increase
in public disenchantment: the turnout was exceptionally low for Sweden (40 percent), and the
anti-EU parties did exceedingly weIl, winning almost half of the Swedish seats in Strasbourg. This
protest vote and subsequent poIls indicating only
a quarter of the population in favor of membership reflect a general disappointment with developments since Sweden's application: the economic situation has not improved notably (at the
same time Sweden is a net contributor to the EU
and will most probably remain so), unemployment rates have remained exceptionally high (although still slightly below the EU average), and
the welfare system continues to be rolled back as
the Swedish government tries very seriously to
reduce the country's record budget deficits and
public debt. All in aIl, the down ward turn of Sweden's standard of living has continued despite
membership, and Sweden is today one of the
poorer EU countries in terms of per capita GDP,
compared to having been the wealthiest of the
current fifteen EU member states.
The issue of neutrality has resurfaced once
again as a fundamental problem, even though
Sweden, by fully accepting the provisions of the
Treaty on European Union (TEU), has acquiesced
in the Common Foreign and Security Policy
(CFSP). Sweden also has observer status in the
Western European Union (WEU) and is active
within NATO's Partnership for Peace. Future possible participation in Economic and Monetary
Union (EMU) has also become increasingly controversial, although the present government continues to defend its commitment to it (whereas
two out of three Swedes want a referendum on
this issue). Sweden has joined neither the European Monetary System nor the Schengen agreement on the free movement of people.
The Swedish government's views on the future of European integration are reflected in its report to the Swedish parliament in preparation for
the 1996-1997 intergovernmental conference
(IGC), which stressed the following goals: to improve the democratic legitimacy of the EU, particularly by increasing transparency and by bringing
the national parliaments and governments of the

443

member states into closer contact with EU decisionmaking; to work for the enlargement of the
EU, especially with regard to the three Baltic
states; and to improve cooperation between member states on a number of crucial social issues such
as industrial productivity, employment, crime prevention, and detection, as weIl as environmental
matters. The government is not weIl disposed toward either federalist tendencies in Brussels or an
a la carte Europe and on European security issues
favors a continuation of intergovernmental cooperation, although Sweden has become somewhat
more flexible about allowing the veto within the
second pillar (CFSP). During the IGC, the government favored strengthening the so-called Petersberg agenda (participation in peacekeeping and humanitarian missions) but opposed proposals that
would have underrnined the balance between large
and small states within the Community.
It is impossible, after only three years of
membership, to predict how a country that kept to
itself for almost two centuries will adapt to closer
integration in Europe. However, it is clear that the
tendency to remain aloof remains strong and tenacious, and as post-TEU poIls have so clearly indicated, the Swedish people have yet to overcome
their deep-rooted vacillation in the face of the opportunities and challenges posed by an even
stronger and enlarged EU.
See also EUROPEAN ECONOMIC AREA; TABLE
6; TABLE 10; APPENDIX 2; APPENDIX 3.

Bibliography

Miles, Lee, ed. 1996. The European Union and the

Nordic Countries. London: Routledge.

-Walter Carlsnaes

Swltzerland
In the 1950s, Switzerland did not want to join the

EC. Instead, Switzerland preferred a free-trade

area within the Organization for Economic Cooperation and Development (OECD) framework.
Accordingly, in 1960 Switzerland was a founding
member of the European Free Trade Association
(EFTA). Britain's impending accession to the EC
in the early 1970s had a profound effect on
Switzerland and the other remaining EFTA members, who signed agreements with the EC in 1972
to remove tariffs and quotas on industrial goods.

444

Switzerland

Fifteen years later the single market program

posed an even greater challenge to Switzerland. In
order to deter new membership applications at a
time when the Community was attempting to
deepen rather than widen, the Commission proposed that the EFfA countries join the EC member states in a new European Economic Area
(EEA). This would give the EFfA countries most
of the benefits of the single market without actually giving them fuH EC membership.
Yet the proposed EEA disappointed Switzerland in three important respects: it was based
solelyon EC law; it could create a kind of minisupranational organization within the EFfA pillar
of the EEA; and it would not de facta allow any
country to opt out of future EC directives pertaining to the EEA.
Dissatisfied with the EEA offer, in June 1992
Bern applied for fuH EC membership. Apart from
an understandable desire to overcome the proposed EEA's drawbacks by acquiring fuH EC decisionmaking capabilities, Switzerland was motivated by three main objectives: to adapt to the
changing, post-Cold War international environment; to meet the challenge of deeper integration
inherent in the recently negotiated Treaty on European Union (TEU); and to keep pace with the
other EFfA countries wanting to join the EC.
The issue soon became moot, however. Contrary to the advice of a large majority of economic,
political, and trade union leaders, 50.3 percent of
the electorate (and approximately three-quarters of
the cantons) rejected EEA membership in a referendum on December 6, 1992. To compensate for
this setback, the Swiss govemment began to negotiate aseries of bilateral agreements with the EU
covering roughly the EEA agenda. Not surprisingly, the most contentious questions concerned
sensitive domestic political issues: the free movement of people and truck transit through the Alps.

The Reluctant Swiss

Apart from specific events and developments that
have affected EU-Swiss relations in recent years, a
number of underlying factors negatively influence
Swiss attitudes toward European integration and
make it unlikely that Switzerland will soon reactivate its membership application. These are Swiss
nationalism, neutrality, economic particularism,
and the weakness of the central state.
The ethos of European integration rejects excessive nationalism. In the 1950s and 1960s, while

the rest of Western Europe attempted to come to

terms with excessive nationalism, Swiss nationalism reached its zenith. This had to do mainly with
the so-caHed lessons of history; specificaHy, the
lessons of World War 11, when the Swiss developed exaggerated myths about "earth," armed
neutrality, citizenship, and (in an effort to distinguish themselves as much as possible from neighboring Germany) the distinctiveness of the SwissGerman dialect. Moreover, tremendous economic
growth and relatively low levels of unemployment
fostered Swiss feelings of national superiority.
Under the circumstances, European integration
seemed alien to Switzerland's identity and had little practical appeal.
Yet this masks an interesting paradox: Frenchspeaking Swiss (20 percent of the population) express one of the most pro-EU feelings in the world.
No less than 75 percent of French-Swiss supported
joining the EEA. This is areaction against the perceived economic and political domination of the
country by the Euroskeptical German-Swiss.
French-speaking Switzerland's pro-Europeanism
crosses political, economic, and social c1eavages;
even French-speaking bankers, conservative politicians, and farmers want Switzerland to join the EU.
During the Cold War, most Swiss were convinced that by staying out of the international organizations and alliances, Switzerland could increase its prosperity, enhance its security, and
maintain its domestic political stability. Armed
neutrality came to be interpreted in a fundamentalist way. Significantly, Switzerland joined the
nonpolitical Council of Europe only in 1963 and
overwhelmingly rejected UN membership in a referendum in 1986.
In the post-Cold War period, most Swiss remain skeptical about the EU as an alternative to
Switzerland's traditional international orientation.
Nor are they sympathetic to the idea of anchoring
any German effort toward international normalization in an EU framework. Most Swiss are also
doubtful about the Franco-German axis being a
genuine element of stabilization in Europe.
Although most economic sectors want at
least partial integration into the single market,
more business people than elsewhere in Europe do
not want fuH EU membership. Two particular features of the Swiss economy help to account for
that. The first is a relatively important "offshore
economy" that generaHy wants to avoid too much
harmonization with the EU. Switzerland has been

System for the Stabilization of Export Earnings from Products (STABEX)

transformed by some multinational companies

and banks into a safe haven of "special" legislation. These interests fear a possible EU interventionist and bureaucratic spillover into Switzerland.
The second feature is that of hyperprotected,
cartelized, and subsidized pressure groups who
want to keep their privileges. For instance, farmers
(Europe's most cosseted) fear accession to the
Common Agricultural Policy, which would offer
them fewer and smaller subsidies than Switzerland's existing farm policy. Other econornic interest groups do not like the idea of the opening of
public procurement, adoption of EC competition
laws, and the dismantling of tariff and, especially,
nontariff barriers with the rest of Europe.
The govemment wants Switzerland eventually to join the EU but is unable to convince a
majority of the electorate. Compared to other European countries, Switzerland has a weak bureaucracy and state apparatus. This can be explained
largely by the conjunction of two factors: (1) confederation (or cantonization) that divides Switzerland into twenty-six govemments and parliaments
and results in a decisive fragmentation and diffusion of political power (especially in rural German-speaking areas, whereas the central state is
often perceived as a somewhat foreign body), and
(2) direct democracy, which also weakens the central state. There is no other country where direct
democracy is so powerful, even at anational level.
In order to avoid being outvoted in a popular referendum, the govemment must strive for the
largest consensus on any issue.
Inevitably in a direct democracy, joining a
supranational organization (in Switzerland, even
the EEA is considered as such) necessitates a referendum. To win approval, the govemment needs
a double majority; one of the electorate as a whole
and one of the cantons. As there are many relatively underpopulated, conservative, anti-EU German-speaking cantons, it will always be difficult
in Switzerland to get popular support for ratifying
treaties linked to European integration.
See also EUROPEAN ECONOMIC AREA; TABLE
6; APPENDIX 2; APPENDIX 3; APPENDIX 7; APPENDIX 8.

445

Bibfiography
Schwok, Rene. 1991. Switzerland and the European
Common Market. New York: Praeger.

-Rene Schwok

SYSMIN
See

SYSTEM FOR THE STABILIZATION OF EXPORT

EARNINGS FROM MINERALS.

System for the Stablllzation of

Export Eamlngs from Minerals
(SYSMIN)
Under the Lome convention, the System for the
Stabilization of Export Eamings from Minerals
(SYSMIN) scheme-modeled on the earlier System for the Stabilization of Export Earnings from
Products (STABEX) scheme-financially assists
participating African, Caribbean, and Pacific
countries whose eamings from mineral exports
fall below a certain level, which is based on a regularly recalculated dependency threshold for each
country in relation to each rninerallisted.
See also LOME CONVENTION.

System for the Stablllzation of

Export Eamlngs from Products
(STABEX)
The System for the Stabilization of Export Eamings from Products (STABEX) scheme of the
Lome convention addresses the chronic problem
of unstable export revenues for participating
African, Caribbean, and Pacific countries that are
overwhelrningly dependent on a single commodity. Under the scheme, a country dependent on
more than a set percentage of export eamings on a
list of STABEX commodities, such as tea, cocoa,
coffee, and cotton, is eligible for financial aid
from the EU if its eamings fell below a certain
level. The system is based on a regularly recalculated dependency threshold for each country in relation to each product listed.
See also LOME CONVENTION

TCAs
See TRADE AND COOPERATION AGREEMENTS.

T
TABD
See 1'RANSATLANTIC BUSINESS DIALOGUE.

TACIS
See TECHNICAL ASSISTANCE FOR THE COMMONWEALTH OF INDEPENDENT STATES.

TACs
See TOTAL ALLOWABLE CATCHES.

TAD
See 1'RANSATLANTIC DECLARATION.

TAFTA

See TRANSATLANTIC FREE TRAnE AREA.

Target Prlce

See COMMON AGRICULTURAL POLICY.

Task Force for Human

Resources, Educatlon, Training,
and Youth
The Commission's Task Force for Human Resources, Education, Training, and Youth ran a
number of important EU programs, notably
ERASMUS (to facilitate student exchange), LINGUA (to promote language acquisition), and
TEMPUS (to encourage student exchange between the EU and the countries of Central and
Eastern Europe), before being incorporated into
Directorate-General XXII of the Commission.

Technlcal Assistance for the

Commonwealth of Independent
States (TACIS)
In early 1992 an EC assistance program called
Technical Assistance for the Commonwealth of
Independent States (TACIS) became operational
for Russia and subsequently for the other members of the Commonwealth of Independent States
(CIS)-the former Soviet republics. This program
had originally been designed for the Soviet Union.
Between 1991 and 1995 the EU allocated ECU
2.268 billion to over twenty-two hundred TACIS
projects, more than half of which involved Russia.
TACIS projects range from restructuring state enterprises to developing services and education and
seek to promote economic reform and facilitate
the difficult transition to democracy. In July 1996,
the Council of Ministers approved a further ECU
2.224 billion for assistance to the CIS and Mongolia from 1996 to the end of 1999. The EU may
suspend TACIS under certain circumstances, such
as human rights violations in the recipient states.
See also RUSSIA.

Telecommunlcatlons Pollcy
After a century of state domination, the telecommunications sector in Europe is facing the challenge of privatization and competition with the
liberalization of voice telephony and network operation in 1998 (with extended transition periods
for Greece, Ireland, Luxembourg, Portugal, and
Spain). The telecommunications sector is of
strategic importance to the whole economy because new technologies offer new communication
options, and improved telecommunications could
reduce information and transaction costs in the
whole economy. Faster and cheaper information
will facilitate the creation of more productive
company networks across countries. Thus modern
telecommunications not only reinforce the role of
markets but also allow fmns to become more decentralized and flexible. As empirical evidence in
Germany shows, telecommunications stimulate
economic growth by facilitating information flow
and communication among firms (Jungmittag and
Welfens, 1996). The irnportance of telecommunications for economic development has been em-

447

448

Telecommunications Policy

phasized in many recent studies (e.g., Wellenius et

al., 1993).
For decades, the telecommunications sector
in Europe was the preserve of national monopolies. Policymakers believed that falling average
costs in network operation implied a natural monopoly, because the fastest growing company will
enjoy advantages in efficiency that will allow it to
overtake all rivals and create a monopoly
(Welfens, 1995). Traditional monopoly behavior
is inefficient, however; under monopoly conditions, the size of the network and the volume of
calls are much smaller than they would be in a
competitive market. The social optimum will lead
to a deficit if price is set equal to marginal costs
(which are lower than average costs). Two-part
tariffs are a solution to this problem without state
subsidies. Two-part tariffs consist of a unit price p
(p equal to marginal costs) and a fixed access
charge, payment of which is required for buying
consumption units at a constant price p.
In economic terms, prices for various
telecomrnunications services should be above
marginal costs and inversely proportional to the
demand elasticities while taking due account of
the budget constraint of the network operator
(Mitchell and Vogelsang, 1991). But it is doubtful
that national telecomrnunications firms ever applied such economically rigorous pricing rules;
the price structure was generally distorted by political forces. For example, the politically popular
concept of universal services and uniform prices
was characteristic of the te1ecomrnunications network, on the grounds that te1ecomrnunications is
part of the basic infrastructure that government
should provide. Therefore, the usual pattern for
state telecommunications monopolies was that
prices were below cost in local telephony but
above cost in long distance and international telephony. In effect, this forced business users to subsidize household users. Uniform prices for telephone rental again led to massive cross
subsidization, this time in favor of the countryside, where the rental charge often did not cover
the greater cost of maintaining the network. Uniform prices were considered to rnirnic the law of
one price under market competition, but in reality
there were large international price differentials,
especially in transatlantic telephony. For example,
after the introduction of long-distance competition
in the United States in 1984, outgoing trans atlantic calls from the United States were much

cheaper than outgoing calls from EC member

states.
Traditional and New Views of
Telecommunications

Although the state monopoly was the traditional

European solution to competition and pricing
problems in this sector-and there are arguments
in favor of such a policy, based on economies of
scale and of density in operation of a fixed-line
network--economists believe that there is in fact
no natural monopoly in the field of telecomrnunications services. From an economic perspective
the most efficient solution to these problems
would be separation of network operation and
telecomrnunications services, coupled with an end
to the traditional operating monopoly through entry into the market of new network operators. With
traditional technologies newcomers had to reach
complex interconnection agreements with the
dominant state-owned operator in order to gain access to the network. Progress in mobile telephony
allows operators to bypass existing networks by
using new digital transmission technologies
(GSM, CDMA, or DECT). However, use of these
technologies raises the problem of allocating
scarce radio frequencies, a problem that ensures a
continued govemment role in the future.
Even in the absence of legal prohibitions or
obstac1es, entry into the sector is not easy for newcomers. The telecomrnunications sector is characterized by global competition, the dynamics of
high-technology industry, and high capital intensity. Large capital requirements make a stable regulatory framework necessary. High sunk costsspecific investment costs that cannot be recovered
when going out of business-give established network operators a substantial advantage over new
entrants. Thus newcomers can enter successfully
only if they comrnand sufficient technological or
special cost advantages (e.g., they already own potential rights of way). A stable regulatory framework is essential to encourage newcomers to commit the large amounts of capital required to enter
the sector.
In Western Europe, however, better technology means that the capital costs of operating a network are now falling. For example, rural households can be connected more cheaply via wire1ess
transmission techniques. Thus even in relatively
sparse1y populated countries such as Sweden or
Finland, several competing network operators

Telecommunications Policy

could profitably coexist. Although cross subsidization for political reasons has been the norm in
Europe, prices for all groups can fall if competition and hence productivity growth are strong (in
Britain real telecommunications prices have declined over 30 percent since privatization of the
sector). Thus arguments against retaining the traditional monopoly sector become even stronger as
the underlying technology improves.
The Commission has launched several studies and initiatives to stimulate competition in this
crucial industry. Most notable are the Commission's 1993 white paper, Growth, Competitiveness
and Employment, and the Bangemann Group report, Europe and the Global Information Society,
which recommended that member states liberalize
the telecommunications sector by "opening up to
competition infrastructures and services still in the
monopoly area." Finally, a 1995 Commission
green paper, Liberalization oJ Telecommunications InJrastructure and Cable Television Networks, envisaged a broader range of concrete
steps toward liberalization.
The green paper raised key questions for
telecommunications to be addressed in any future
regulatory framework: How can universal service
be developed? How much will it cost, and who
should pay for it? How should problems of interconnection and interoperability be handled? What
restrictions or conditions should government
place on licenses? How can a fair competitive environment be ensured? How can infrastructure
competition create employment? How should Europe address the shift in employment in telecommunications? How can Europe ensure comparable and effective access to global markets?
Finally, what are the broader societal effects of
the information society?
The liberalization of network operation and
services in 1998 willlikely result in an enormous
increase in competition (Welfens and Graack,
1996). The green paper suggested that regulation
should largely remain at the national level. This
means that, given the direction of new technology,
national regulators will have to focus not only on
traditional telecommunications networks but also
on sectors not covered by the green paper, such as
the cable television sector and e1ectricity sectors.
The green paper emphasized that "in the future any regulatory framework for infrastructure
must be sufficiently flexible to meet the challenges thrown up by the existing convergence of

449

telecommunications, information technology and

broadcasting." This approach recognizes that the
switch to digitization of information, pictures, and
music will blur the lines between traditionally
separate markets. However, the green paper did
not really address the competition problems raised
by entry of energy networks, for example, into the
telecommunications business.
Alternative Networks and
Potential Market Entrants

Potential alternative infrastructures in the te1ecommunications business include terrestrial networks,

cable television networks, cellular systems, sate1lite systems, electricity companies, and railway
companies that have firm internal networks and extensive rights of way. Appropriately enhanced, internal corporate networks could be opened to the
general public after 1998.
Cable television networks could in principle
provide an ideal platform for newcomers to enter
the telecommunications market unless the dominant operator itself owns the cable network, as in
Germany and Portugal. In principle the cable television network can be one full-range alternative
infrastructure in the telecommunications business.
However, Italy, Greece, and Portugal face some
problems in the short term because of low coverage.
New market entrants could also emerge from
the electricity and railway companies that operate
large international networks. Once upgraded and
extended, such networks could be marketed for
public telephony. For example, by adding fiberoptic cable to the network of posts and lines for
electricity transmission and by installing appropriate switches, hardware, and software to run the
network, electricity grid companies can enter the
trunk and local markets with relatively small
marginal costs. The same applies to internal networks belonging to banks and multinational companjes. In principle, digitization would allow
these networks to transmit voice and other "bits
of information" for third parties. Local access is,
of course, a main problem for newcomers, but
new wireless technologies facilitate bypassing
the dominant operator. The alternative to a wireless bypass or alternative terrestrial network is to
use leased lines from the dominant operator; in
this case, the terms of interconnection agreements would be crucial to the success of the newcomer.

450

Telecommunications Policy

Interconnection charges are an unresolved

problem that can discourage competition and reinforce inefficiencies in the telecommunications
business, especially where newcomers must reach
agreement with dominant network operators. One
option is to develop and enforce basic interconnection pricing rules via regulation; a more effective one would be growth of competition among
network operators through entry of potential rivals
such as energy grid companies, cable television
companies, and other new terrestrial operators.
Resale of capacity by holders of leased lines will
add an important new element of competition.
Britain has allowed the resale of capacity for national and international transmission, and in 1996
the government extended licenses for newcomers
in international telephony.
Regulatory Framework and Regulatory Policy

To ensure a competitive market (possibly even one

favoring new entrants) and maximum economic
benefit from new telecommunications technology,
the future regulatory framework will have to cover
the following areas: (1) numbering plans that ensure number portability so that consumers may
switch freely from one telecommunications company to another (in France the regulator-independent since 1997-proposed a new scheme
whereby the telecommunications user can determine the long-distance company by the first digit
so that access to that company's operator is pos sible on a call-by-call basis), (2) pricing rules that
favor cost-oriented pricing and technological
progress (e.g., via price caps), (3) interconnection
rules that cover both technical protocols and the
price of access to a network, (4) universal service
obligations that must be defined and financed
(e.g., from tax receipts, on the basis of market
shares or from access charges), (5) frequency allocation in the case of mobile telephony, (6) technical regulations to ensure interoperability of networks, and (7) rules for consumer protection.
Moreover, in order to achieve a fully competitive market, regulators must have appropriate
powers and structure. For example, regulated industries are subject to the problem of regulatory
capture, that is, industry representatives find ways
to influence legislation and regulation to stifle
competition and allow rent-seeking (profiteering)
by the regulated parties (Posner, 1974; Stigler,
1975). This need not always be the case; in a departure from European experience, Britain's Con-

servative government used its regulatory powers

to achieve and maintain competition in a market
initially dominated by one operator. Hence the
British Office of Telecommunication (OFfEL)
implemented asymmetric regulation that imposed
more constraints on the dominant operator than on
newcomers. Regulatory bodies should also be politically independent so that credible rules can be
enforced. Similar principles of regulatory policy
must be adopted in all EU countries. One forum
for developing common principles of regulation
might be the Organization for Economic Cooperation and Development (OECD), which has become increasingly interested in the telecommunications sector (Ypsilanti and Kelly, 1993).
EU and national regulators have already begun
to grapple with the specific regulatory requirements
listed above. EU regulation provides a framework
within which national regulators can operate in accordance with national and EU law and the principIes of the single market. Competition in the presence of a dominant operator is only possible if there
are clear interconnection rules and if open network
provisions (ONP) are implemented. Since the
1980s the Commission has emphasized the principIe of ONP. In 1996 the EU adopted the position
that national authorities cannot refuse licenses for
telecommunications operators except in four cases:
(1) to give a licensee access to a radio frequency for
mobile telephony or in the event of a temporary
shortage of numbers; (2) to give a licensee access to
private or public land; (3) to enforce universal service obligations; (4) to ensure interconnection in
the case of a dominant fixed network operator. The
ONP Committee, chaired by a Commission official
and composed of representatives from all member
states, is a major EU regulatory authority. ONP
Committee decisions are taken by qualified majority voting but can be vetoed by the Commission.
However, the Council of Ministers in turn may
overrule the Cornmission. The ONP Cornmittee
seeks to ensure interoperability and hence functions
as an arbiter in problems arising from the EU's
ONP leased-lines directive.
The UK has set the pace for incentive regulation in the EU. In order to avoid problems created
in the United States (i.e., overinvestrnent in capital
and insufficient innovation) when regulators used
a theoretical appropriate "rate of return" on investment to set prices for dominant suppliers, the
British regulator OFfEL set a price cap for a bundle of network activities or services. Specifically,

Telecommunications Policy

prices are allowed to grow at the same rate as the

retail price index minus the anticipated productivity growth rate, which was initially estimated at 3
percent but raised to 7.5 percent in 1995. In setting initial prices, OFfEL also had to take into account the need to rebalance existing tariffs to
bring them into line with actual costs.
Another aspect of pricing policy, the accounting system for international calls, is also likely to be
revised soon, as the United States is increasingly
dissatisfied with the current situation. As competition has reduced international charges within the
Uni ted States relative to high monopoly prices in
Europe, more transatlantic calls originate in the
United States than in Europe. This has led to a
"trade surplus" for European operators. Not only do
European operators reap the benefits of higher
prices for calls originating in Europe; under the current international payments system, they can charge
U.S. network operators for completing the calls at
the European end, thus profiting from the increased
volume of calls resulting from lower U.S. prices.
There is no doubt that the U.S. government will put
much pressure on EU member countries to open up
teleeommunications markets for U.S. network operators and to accept new international accounting
rates that are less biased against the United States.
Privatization and Foreign Investment

Privatization is an important issue in Europe. The

UK pioneered competition in the telecommunications seetor in 1984, using a duopoly approach. But
in 1995 British Teleeommunications (BT), the former monopoly operator, still held about 85 percent
of the British market. Since then newcomers from
the cable television seetor (including U.S. companies Nynex, Cablecomms, and Bell Cablemedia,
which joined forces with Cable and Wueless) have
increasingly moved into the telecornmunications
business. This move was possible because digitization has blurred traditional market demarcation
lines between video, audio, and voice transmission,
reinforcing competition in teleeommunications.
Although the Netherlands, Denmark, and
Spain (Telefonica) followed Britain's lead in the
mid-1990s, Germany and France were more hesitant. Germany will not privatize more than one
third of its market; France envisages a gradual privatization of up to 49 percent until 1999. Governments hope to generate large revenues from privatizing state monopolies, but trade unions often
resist heavily, fearing job losses. Privatization in-

451

creases pressure on management to achieve a

competitive return on investment. This may cause
loss of jobs but also fosters the development of
new value-added services as weIl as entry into
new foreign markets. In the long run, privatization
should lead to an integrated EU market in which
distance costs become irrelevant.
Foreign direct investment in telecommunications increased rapidly in the 1990s when many
U.S. "Baby BeIls" became active in European mobile telephony or joined EU operators willing to
enter neighboring markets. Both BT and France
TelecommunicationslDeutsche Telekom joined
forces with U.S. partners (MCI and Sprint, respectively). AT&T has formed a joint venture with
Unisource, a consortium including Swiss PTT,
Dutch KPN, Swedish Telia, and Spanish Telefonica. One major reason for creating broad international consortia is that clients, especially multinational companies, want one-stop shopping in
telecommunications.
U.S. teleeommunications operators interested
in entering EU markets have used these new joint
ventures to press for liberalization in Britain, Germany, and France-above all to ensure that the
dominant operator would give newcomers nondiscriminatory access to local networks. As the GATT
Uruguay Round agreements include a new chapter
on services-including value-added teleeommunications services-the World Trade Organization
(WTO) is monitoring the deregulation process in
many countries. A special Negotiating Group on
Basic Telecommunications was created in the
WTO to deal with specific problems of the
telecomrnunications sector (including foreign direct investment) after the completion of the
Uruguay Round. The International Telecommunications Union (ITU), long the dominant multilateral organization in the sector (e.g., setting international accounting rates), is thus increasingly being
underrnined. With EU telecommunications liberalization, such accounting rates will be replaced with
interconneetion charges negotiated in the market.
In Central and Eastern Europe, where there
was a large excess demand for teleeommunications
in the communist era, the sector is undergoing a
rapid transformation (Welfens, 1992; Welfens and
Yarrow, 1996; Schenk, Muller, and Schnoring,
1995). Central and Eastern European states that
have concluded agreements with the EU will be
subject to EU competition rules (Hoekman and
Mavroidis, 1995). Therefore EU deregulation will

452

Television Without Frontiers

strongly influence Central and Eastern Europe also.

Moreover, besides U.S. finns, the main foreign investors in the region are from EU countries, most
notably Deutsche Te1ecommunications, Dutch
PTf, Tele Denrnark, BT, and Finnish Telecommunications. The integration of Western, Central, and
Eastern Europe will partly be achieved on the basis
of a new modern international te1ecommunications
network.
See also EUROPEAN TELECOMMUNICATIONS
STANDARDS INSTITUTE.

Bibliography

Hoekman, B. M., and P. C. Mavroidis. 1995. "Linking

Competition and Trade Policies in Central and East
European Countries." In L. A. Winters, ed., Foundations of an Open Economy, pp. 111-153. London:
Center for European Policy Research.
Jungmittag, A., and P.J.J. Welfens. 1996. Telekommunikation, Innovation und die langfristige Produktionsfunktion: Theoretische Aspekte und Kointegrationsanalyse fr die Bundesrepublik Deutschland.
Discussion Paper, no. 20. Potsdarn: European Institute for International Economic Relations/University
ofPotsdam.
MitchelI, B. M., and I. Vogelsang. 1991. Theory of
Telecommunication Pricing. Discussion Paper, no.
65. Bad Honnef: WIK.
Posner, R. 1974. "Theories of Econornic Regulation."
Bell Journal of Economics and Management Science
5,no. 3, pp. 335-357.
Schenk, K.-H., J. Muller, and T. Schnoring, eds. 1995.
Mobile Telecommunications: Emerging European
Markets. Boston: Artech House.
Stigler, G. J. 1975. The Citizen and the State: Essays on
Regulation. Chicago: University of Chicago Press.
Welfens, P.J.J. 1992. Market-Oriented Systemic Transformations in Eastern Europe. New York: Springer.
- - - . 1995. "Telecornrnunications and Transition in
Central and Eastern Europe." Telecommunications
Policy 19, no. 7, pp. 561-577.
Welfens, P.I.I., and C. Graack. 1996. Telekommunikationswirtschaft. Heidelberg: Springer.
Welfens, P.J.J., and C. Yarrow, eds. 1996. Telecommunications and Energy in Transforming Economies. International Dynamies, Deregulation and Adjustment
in Network Industries. Heidelberg: Springer.
Wellenius, B., et al. 1993. Telecommunications: World
Bank Experience and Strategy. World Bank Discussion Paper, no. 192. Washington, DC: World Bank.
Ypsilanti, D., and T. Kelly. 1993. Fostering Telecommunications Development: The Role of the OECD. In C.
Steinfield, J. M. Bauer, and L. Caby, eds., Telecommunications in Transition, pp. 118-139. London: Sage.

-Paul J.J. Welfens

Television Wlthout Frontiers

The so-called Television Without Frontiers directive (Directive on the Coordination of Certain
Provisions Laid Down by Law, Regulation or
Administrative Action in Member States Conceming the Pursuit of Television Broadcasting
Activities) was a controversial Commission initiative to encourage the production of European
films and television prograrns and to protect European languages and culture from the impact of
the U.S. entertainment industry. Thus, Article 4
of the directive stipulated that "where practicable
and by appropriate means," broadcasters should
reserve a majority proportion of their transmission time (excluding news, sports events, games,
advertising, and teletext services) for European
works.
See also AUDIOVISUAL POLICY.

Temporary Commlttee
of Enqulry
The Treaty on European Union formally recognized the European Parliament's right to establish
temporary committees of inquiry, thereby
strengthening the Parliarnent's powers of scrutiny
and control. The first such committee investigated
transit fraud-smuggled goods and forged documents-in the EU.
See also EUROPEAN PARLIAMENT.

TEMPUS
See TRANS-EUROPEAN MOBILITY SCHEME FOR UNIVERSITY STUDENTS.

Ten
After the accession of Greece to the EC in 1981,
the nine member states becarne ten. Thus the EC
was often referred to as the Ten between 1981 and
1986, when Spain and Portugaljoined and the Ten
became the Twelve.

TENs
See TRANS-EUROPEAN NETWORKS.

TEU
See TREATY ON EUROPEAN UNION.

Thatcher, Margaret (7925-)

Thatcher, Margaret (1925- )

Margaret Thatcher, the fonner British prime minister (1979-1990), is famous-or infamous-for
her opposition to the Treaty on European Union
(TEU) of February 1992, especially its provisions
for Economic and Monetary Union (EMU). As the
newly elevated Baroness Thatcher of Kesteven,
Thatcher seized every opportunity in late 1992 to
denounce the treaty and rally Conservative opinion against its ratification in the UK. Thatcher's
forceful stand against the TEU was the culmination of a long-simmering political, philosophical,
and ideological dispute with Brussels. As astout
defender of national sovereignty, Thatcher disliked the Commission's federalist agenda and the
EC's supranational ambition. She is often compared to French president Charles de Gaulle: both
were ardent nationalists, and both resolutely opposed the Community's increasing encroachment
on their countries' sovereignty.
Yet there are obvious differences between
them. The most striking is their contrasting attitude and behavior toward the Uni ted States. De
Gaulle resented the hegemony of the Uni ted States
in the alliance and did everything possible to assert French and European independence of Washington. His attempt to bring about a Europe of the
States, in contradistinction to a divided continent
under the wings of the two superpowers, and his
break: from NATO in 1966 are legendary. By contrast, Thatcher deliberately cultivated the AngloAmerican "special relationship" and struck up a
warm friendship with President Ronald Reagan.
Thatcher formulated her policy toward Europe
largely in relation to her policy toward the United
States. She strove to become Washington's most
trusted ally and favored interlocutor on trans atlantic economic, diplomatic, and military affairs.
The EC played a prominent role throughout
Thatcher's political career. In 1975 she made her
maiden speech as leader of the Conservative opposition in the House of Commons on the thenburning issue of Britain's renegotiation of accession tenns and a referendum on continued
membership. In typically strident tones, Thatcher
argued against a constitutionally unprecedented
referendum; in view of the Labour government's
decision to hold a referendum in any case, she argued in favor of Britain's remaining in the Community. Both positions appeared paradoxical in
1992, but only the first one was. In 1992 Thatcher

453

repudiated her earlier stand and called for a referendum in Britain on the TEU. Yet she remained
true to her original support for EC membership.
What she objected to in 1992, as in the past, was
not an international organization dedicated to implementing common economic policies but the
federalism inherent in European integration,
which had received a big boost in the late 1980s
under Commission president lacques Delors.
Renegotiation of EC membership tenns was
to have resolved the contentious issue of Britain's
budgetary contribution to Brussels. Instead, the
1975 renegotiation was a cosmetic exercise intended to assuage British public opinion and hold
the pro- and anti-EC sides of the Labour Party together. Moreover, Britain's favorable transition
tenns disguised the extent of its unfair budgetary
situation. By the time Thatcher came to power in
May 1979, however, the enormity of the budgetary
anomaly was glaring. Compared to other member
states, Britain imported far more manufactured
goods and agricultural produce from outside the
EC and paid more in import duties and agricultural
levies into the Community's coffers. On the other
hand, because Britain had a highly efficient agricultural sector, the country received little from the
Common Agricultural Policy (CAP), which accounted for over 70 percent of Community expenditure. Although Thatcher's EC counterparts conceded the inequity of Britain's case, the so-called
British Budgetary Question soon became the most
heated and controversial issue in the Community.
Thanks largely to Thatcher's obduracy, intransigence, and complete disregard for diplomatic convention, the dispute las ted five years and dominated fifteen European Councils before being
resolved at the Fontainebleau summit in lune
1984.
Despite the debilitating effect of the budgetary question, Thatcher played a prominent part
in the EC's revival in the mid-1980s. An unswerving champion of deregulation and economic liberalism, she persistently advocated completion of
the Community's long-awaited internal market.
Accordingly, she strongly supported the Commission's white paper on the single market and
pushed hard for implementation of the program.
Like almost everyone else at the time,
Thatcher never expected the single market program to revive the movement for deeper European
integration. She was lukewarm about the Single

454

THERMIE

European Act-a constitutional change deemed

necessary for passage of single market legislation-Iest it strengthen the Commission's power
and foster further supranationalism. She especially feared a renewal of interest in EMU, a logical corollary of a single market. That put her on a
collision course with Delors, who enthusiastically
espoused EMU not only because of its intrinsic
merit but also because of its potential for prornoting European integration. Thatcher's opposition to
Delors and all he represented culminated in her famous speech at the College of Europe in Bruges in
September 1988, a brilliant harangue against an
"identakit" Europe and a socialist, centralized
Community.
Yet Thatcher found herself fighting a rear
guard action in Brussels and London against Delors's plans for EMU. The key issue became
Britain's participation in the exchange rate mechanism (ERM) of the European Monetary System
(EMS). Thatcher promised to join the ERM but
only at the most propitious moment for Britain.
Her cabinet colleagues pressed for ERM participation in 1988 and 1989, both to strengthen the
pound and to signal the country's commitrnent to
EMU. Combined with a bitter domestic dispute
over a new method of taxation, controversy over
ERM poisoned relations in the government. More
self-righteous than ever, Thatcher became increasingly unpopular and isolated. Once Thatcher's senior cabinet ministers realized that her continuing
support for the hugely hated new tax meant that the
Conservative Party could not win another election
under her leadership, they launched a palace revolution.1n November 1990 she lost the party leadership and, consequently, the prime ministership.
Thatcher's opposition to EMU had contributed to her downfall. Deeper European integration was never popular in Britain, but Thatcher's
strident opposition to it, at a time of increasing domestic recession, began to alienate even her own
supporters. John Major, her successor, distanced
hirnself from Thatcher by striking a constructive
note on Community affairs (initially at least). At
the Maastricht summit in December 1991, Major
won safeguards for Britain on EMU and an opt out
of the Social Charter. Yet at horne, sulking on the
backbenches of the House of Commons, Thatcher
decried what she saw as Major's sellout. Thereafter, she continued her hectoring from the greater
political distance of the House of Lords, reveling
in the government's discomfiture during the TEU

ratification crisis and the deepening rift between

Euroskeptics and Euromoderates in the Conservative Party.
See also UNITED KINGDOM.

THERMIE
THERMlE is the application (market-oriented) side
of the nonnuc1ear energy research program under
the aegis of the EU's research and technological development policy (JOULE, a companion program,
prornotes pure research on nonnuc1ear energy).
THERMlE inc1udes projects to advance or implement innovative energy techniques, processes, or
products for which the research and development
plan has been completed; dissemination of information on innovative energy technologies; and support for small and medium-sized enterprises.
THERMIE is managed by the Commission's Directorate-General XVll.

Third Countries
Nonmember states of the EU are known as third
countries.

Thlrd Pillar
The EU is built on three pillars: the EC (Pillar
One), the Common Foreign and Security Policy
(Pillar 1\vo), and Justice and Horne Affairs (Pillar
Three).
See also JUSTICE AND HOME AFFAIRS; PILLARS; TREATY ON EUROPEAN UNION.

Thom, Gaston (1938- )

Gaston Thom succeeded Roy Jenkins as Commission president in 1981, serving for four years before handing over to Jacques De10rs in January
1985. Before coming to Brussels, Thom had been
a government minister in Luxembourg since 1969,
inc1uding aperiod as prime minister between
1974 and 1979. Thus, from the perspective of the
Council of Ministers, Thom had asound knowledge of how the EC worked (or didn't work).
Moreover, between 1959 and 1969 he had been a
member of the European Parliament. Yet Thom
was a disappointment as Commission president.
He failed to maintain the momentum that Jenkins
had developed and in retrospect was completely
overshadowed by his successor, Jacques Delors.

Tourism
Even in his own Commission, Thorn appeared to
have less influence and ambition than Etienne
Davignon, whose name, rather than Thorn's, is often used to identify the 1980-1984 Commission.
After his departure from Brussels, Thorn went
into international banking.
See also COMMISSION; LUXEMBOURG.

Three Wlse Men

Barend Bushevel, a former Dutch prime minister;
Edmund Dell, a former British government minister; and Robert Matjolin, a former vice president
of the Commission, were the "three wise men"
asked by French president Valery Giscard d'Estaing (with the European Council's approval) in
December 1978 to draft areport on reform of the
EC's institutions. Setting a fine example of bureaucratic efficiency, the wise men stuck to their
mandate, tight timetable, and limited budget and,
to the surprise of the heads of state and government, presented their report on time, a month before the Dublin summit of November 29 and 30,
1979. At the summit, Giscard noted with pleasure
the report's criticism of the Commission and endorsement of the European Council. Beyond that,
Giscard did not delve too deeply. After all, the report also criticized successive Council presidencies for lack of direction (France's presidency, in
the first half of 1979, had been particularly poor).
Nor did Giscard like the report's emphasis on a
lack of political will as the main obstac1e to the
EC's development. Thus, after a perfunctory discussion of it at the Dublin summit, the three wise
men's Report on European Institutions joined two
similar reports drafted at the same time (the Tindemans Report and the Spierenburg Report) in the
EC's archive.

nndemans Report
At a summit in Paris on December 9 and 10, 1974,
the heads of state and government-motivated by a
sense of obligation rather than enthusiasm-asked
Leo Tindemans, prime minister of Be1gium and a
committed Eurofederalist, to prepare areport on
European union. Tindemans toured EC capitals,
interviewed numerous EC and member state officials, and presented his conc1usions in January
1976. The so-called Tindemans Report focused
less on the lofty goal of a federal Europe than on
the urgent need to reform existing EC institutions

455

(e.g., reduce the number of commissioners, replace

unanirnity with qualified majority voting, lengthen
the six-month Council presidency) and extend
Comrnunity competence (notably in the field of
foreign policy and security). The report's most
controversial aspect was an exploration, but not
specifically an endorsement, of a "two-speed Europe," with differing rates of integration in the EC
depending on the will and ability of each member
state. Smaller member states disliked the prospect
of a first- and second-c1ass EC, and the larger
member states-with the exception of Germany
and Italy-fretted about a further loss of sovereignty. French president Giscard d'Estaing took
the lead and stifled the report with the kind of bureaucratic asphyxiation that Tindemans had so bitterly complained about: the heads of government
asked their foreign ministers to consider the report;
the foreign ministers asked their senior officials to
do so; the senior officials reported on the report to
their foreign ministers; the foreign ministers reported on the report's report to the European Council in The Hague on November 29 and 30, 1976;
and the European Councillet the matter drop.

Total Allowable Catches (TACs)

Total Allowable Catches (TACs) are the centerpiece of a system of conservation and management ("balanced exploitation") of fish stocks that
is in turn a key element of the EU's Common
Fisheries Policy. The scientifically determined
TACs specify annually the quantity of each of the
main species that can be caught, which is then divided among the member states. TACs are supplemented by various complementary measures such
as restrictions on net mesh size and temporary
fishing bans at certain times, in various areas, and
on taking particular species. The system is enforced by member states supervised by a small EU
fisheries inspectorate.
See also COMMON FISHERIES POLICY.

Tour15m
Although tourism has a major impact on the EU's
economy (employing nine million people and accounting for 5.5 percent of the GDP) and is affected by regional, consumer, environment, and
transport policies, the EU does not have a well-developed tourism policy. In April 1996, the Commission proposed its first multiannual (1997-

456

Trade and Cooperation Agreements (TCAs)

2000), EU-level, tourism program (calIed

PHILOXENIA) to replace a small number of preexisting tourism initiatives that had met with little
success. The PHILOXENIA proposal brought out
the latent division between EU member states
over tourism policy: citing subsidiarity and efficiency, the majority want to keep EU involvement
to aminimum; hoping for financial support, the
minority (notably Greece, Italy, Luxembourg, and
Ireland) want tourism to become a full-fledged
EU policy area.

Trade and Cooperatlon

Agreements (TCAs)
Trade and Cooperation Agreements (TCAs) are a
category of EU accords with nonmember states.
In terms of economic and political involvement,
they are the least intense and intrusive, aiming
only for the development and diversification of
trade relations and the promotion of economic
and commercial cooperation. The EC signed one
of these so-called first generation agreements
with the USSR in December 1989 and extended
its terms to cover Russia and the other former Soviet republics after the USSR's collapse in December 1991. Most of the TCAs with the former
Soviet republics and the Central and Eastern Europe states (CEES) were upgraded first to Partnership and Cooperation Agreements and later (in
the case of the CEES) to association (Europe)
Agreements.
See also CENTRAL AND EASTERN EUROPEAN
STATES; RUSSIA.

Trademark Office
See

COMMUNITY TRADEMARK OFFICE.

Transatlantlc Agenda
See

NEW TRANSATLANTIC AGENDA.

Transatlantlc Business
Dlalogue (TABD)
The Transatlantic Business Dialogue (TABD) is
an unprecedented venture in government-business
partnership that tackles issues relating to the
world's most important economic relationship:
that between the United States and the EU. The
TABD has no formal structure and no official sec-

retariat, nor is it a new institution or simply another business organization designed to influence
policymakers. Rather, the TABD is a private-sector force designed to respond to the new reality of
trade-namely, that companies are functioning
globally and that their involvement in the making
of international trade policy is a natural outgrowth
of such globalization.
The TABD has been called an "experiment in
entrepreneurial diplomacy" (Levine, 1996) in
which U.S. and European business leaders at the
chief executive officer (CEO)-level work together
to develop common objectives. Those objectives
are jointly communicated to senior-level U.S. and
EU officials who, in turn, work together with business to develop "smart" policy with the ultimate
goal of benefiting both economies through improved competitiveness and the creation of new
jobs.
The idea of a business-driven transatlantic dialogue was launched at a meeting sponsored by
the EU Comrnittee of the American Chamber of
Commerce in Brussels on December 15, 1994, by
U.S. secretary of commerce Ron Brown. Considering the importance of the U.S.-EU economic relationship, Brown had come to the conclusion that
traditional government-to-government communication was no longer enough. He reasoned that because business is the practitioner of international
commerce, business leaders are best positioned to
see the practical effects of trade policy and therefore should be consulted in the policymaking
process.
Brown met Commission vi ce president Sir
Leon Brittan and comrnissioner for industry Martin Bangemann to develop the idea. The three then
sent ajoint letter to eighteen hundred U.S. and European companies and business associations in order to gauge business interest. Based on the responses to the letter, the Commission and the
Department of Commerce produced a summary
analysis and deterrnined that sufficient interest existed to warrant a high-level business-government
conference on transatlantic trade relations. Brown,
Brittan, and Bangemann agreed to hold the conference in Seville, Spain, under the Spanish Council presidency in November 1995. The business
responses also deterrnined the four working group
topics that the Seville conference would address:
standards, certification, and regulatory policy;
trade liberalization; investment; and relations with
third countries.

Transatlantic Business Dialogue (TABD)

The Seville conference was a great success.

Led on the U.S. side by Xerox CEO Paul Allaire
and Ford Motor Company CEO Alex Trotman and
on the European side by BASF CEO Jrgen
Strube and Goldman Sachs International chairman
Peter Sutherland, the transatlantic business community worked together effectively to produce a
joint document that included seventy recommendations on practical ways to reduce impediments
to trade. The collaborative climate between the
European and U.S. business executives became
known as the "Spirit of Seville." The conference's
concluding declaration stated that the goal of the
TABD "is to encourage the politicalleaders to analyze the competitive situation on both sides of the
Atlantic to ensure that laws and regulations converge wherever possible to allow market forces to
accelerate economic growth and job creation and
improve international competitiveness."
Government officials paid serious attention to
the Seville recommendations, many of which
were incorporated into the New Transatlantic
Agenda (NTA) and the U.S.-EU Action Plan approved by U.S. president Bill Clinton, Commission president Jacques Santer, and Spanish prime
minister Felipe Gonzalez at the U.S.-EU summit
in December 1995.
The Seville conference cochairs decided that
new institutions were unnecessary to pursue the
TABD. Instead, they would tap the trade expertise of interested companies and harvest the capabilities of existing organizations already working on transatlantic relations. Accordingly, the
Seville recommendations were organized into
fifteen issue groups, with issue managers assigned on both sides of the Atlantic to steer the
business community's interest in these areas. For
instance, the first issue group, the Transatlantic
Advisory Committee on Standards, Certification,
and Regulatory Policy (TACS), is further divided
into sectors such as automotive, pharrnaceutical,
electronics, telecommunications, and information technology.
At the TABD Steering Committee meeting in
Brussels in May 1996, issue managers submitted a
progress report that developed the Seville recommendations into concrete proposals for government action and outlined business expectations.
Key categories and goals include:
Standards, Certification, and Regulatory Policy:
Further regulatory cooperation to remove

457

costly barriers caused by differing standards

and regulatory policy; conclusion of the mutual recognition agreements.
WTO Issues: Continued commitment to the multilateral process and priority attention to be
given to the full implementation of the
Uruguay Round commitments and, in addition, progress toward China's accession to the
World Trade Organization.
InfoT71Ultion Technology Agreement (ITA): Commitment to the successful outcome of ITA negotiations by December 1996, extended to
the maximum number of countries and products.
Intellectual Property: Full and complete implementation by the United States, the EU, and
the EU's member states of the Agreement on
Trade Related Aspects of Intellectual Property and accelerated implementation of the
agreement by key third-country markets.
International Business Practices: Commitment to
implement promptly the 1994 and 1996 Organization for Economic Cooperation and
Development recommendations, including
the elimination of tax deductibility of bribes
and the criminalization of bribery.
Small and Medium-Sized Enterprises: Development and implementation of a small business
initiative to include a new information system
and a program to assist small businesses to
explore trade opportunities and facilitate joint
ventures and export financing .
Investment and Research and Development: Commitment to open investment regimes, including the principles of national treatment of investors and investments.
The Libertad (Helms-Burton) Act and similar U.S. measures against Iran and Libya largely
overshadowed the June 1996 and subsequent
U.S.-EU summits. As a result, the TABD was one
of the few positive elements on the transatlantic
agenda of the June 1996 meeting. At a lunch during the summit hosted by U.S. secretary of commerce Mickey Kantor and attended by President
Santer and Charlene Barshefsky, acting U.S. trade
representative, CEOs urged both sides to act
quickly to implement the joint business proposals
as outlined in the progress report. Political leaders obtained a better view of private-sec tor commercial objectives and frustrations with certain
trade policies; the CEOs obtained a clearer under-

458

Transatlantic Declaration (TAO)

standing of the political realities facing policymakers.

The TABD has provided the private sector
with a seat at the table in shaping the future of the
transatlantic marketplace. The U.S. government
and the Commission already have indicated their
des ire for the TABD process to continue. At a
press conference following the TABD steering
committee meeting in Brussels on May 23, 1996,
Undersecretary of Comrnerce Stuart Eizenstat
noted that "the TABD has influenced govemrnent
decision-making on both sides of the Atlantic. It
has become deeply enmeshed and embedded into
the U.S. government decision-making process on
a whole range of regulatory, trade, and comrnercial issues ... [and] has had a truly remarkable impact in our country, in the Transatlantic dialogue,
and multilaterally" (Eizenstat, 1996).
For its part, business is willing to continue
the dialogue ifthe United States and EU can prove
that action will follow. The TABD's annual conferences (the most recent of which took place in
Rome on November 6 and 7,1997) provide an opportunity to refocus official attention on privatesector priorities for transatlantic trade policy. Future developments will show whether this
"experiment in entrepreneurial diplomacy" is truly
worthwhile. If it is, the TABD may weIl become a
model for other trading relationships.
See also U.S.-EU RELATIONS: THE POLITICS
OF PARTNERSHIP.
Bibliography
Eizenstat, Stuart. 1996. "Statement at the TABD Press
Briefing." Brussels (May 23).
Levine, Norman. 1996. "A Trans-Atlantic Bargain."
Journal ofCommerce (May 10), p. 6A.

-Selina lac/cson

Transatlantlc Declaratlon (TAD)

On November 20, 1990, U.S. president George
Bush, European Council president Giulio Andreotti, and Commission president Jacques Delors
signed a Deelaration on U.S.-EC Relations-the
so-called Transatlantic Deelaration (TAD)-at a
U.S.-EC summit in Washington. The TAD signaled achanging U.S.-EC relationship in the context of a new, and as yet uncertain, post-Cold War
international system. As weIl as obvious comrnercial reasons for a more formal relationship, the de-

elaration ineluded a new factor: "the accelerating

process by which the EC is acquiring its own
identity ... in foreign policy and in the domain of
security." The TAD established a framework for
regular consultations (ineluding six-monthly U.S.EC summits) to enable both sides to "inform and
consult each other on important matters of common interest, both political and econornic, with a
view to bringing their positions as elose as pos sible, without prejudice to their respective independence." The TAD was later augmented by the New
Transatlantic Agenda.
See also U.S.-EU RELATIONS: THE POLITICS
OF PARTNERSHIP.

Transatlantlc Economlc Area

The term Transatlantic Economic Area was used

in 1995 to describe a possible new political and
econornic arrangement between the United States
and EU. U.S.-EU negotiations culrninated in December 1995 in the less ambitious New Transatlantic Agenda, which ineluded a commitment to
eloser econornic cooperation.

Transatlantlc Free Trade

Area (TAFTA)
In 1995, at a time of changing U.S.-EU relations,

a number of leading U.S. and European officials

called for a Transatlantic Free Trade Area
(TAFTA). Concerned about a seeming drift in
transatlantic relations, their motives were political
rather than econornic. Although a TAFTA proved
premature, U.S.-EU negotiations culrninated in
December 1995 in the New Transatlantic Agenda,
which ineluded a commitrnent to eloser econornic
cooperation.
See also U.S.-EU RELATIONS: TRAnE AND INVESTMENTS.

Trans-European Mobillty
Scheme for Unlverslty Students
(TEMPUS)
As part of the Pologne et Hongrie: Actions pour la
Reconversion :Econornique (PHARE) program of
assistance to the Central and Eastern European
states (CEES), in 1990 the EC launched the TransEuropean Mobility Scheme for University Students (TEMPUS) to promote educational exchanges between the EC and the CEES. TEMPUS

Transparency 459
Iran from 1990 to 1994; TEMPUS 11 covers the
period 1994 to 1998.

Trans-European Networks
(TENs)
The Treaty on European Union (TEU) ineluded a
new title (Title XII, Articles 129b--d) on Trans-European Networks (TENs) in the areas of transport,
telecommunications, and energy infrastructure.
By facilitating better access in the EU to markets
and employment, promoting competitiveness and
growth, and improving links to peripheral regions,
TENs are intended to develop the single market
and further economic and social cohesion. In his
1993 white paper, Employment, Growth and Competitiveness, Commission president Jacques Delors mentioned TENs as important instruments to
promote growth and combat unemployment in the
EU. At the December 1994 Essen sumrnit, the European Council committed itself to establishing
the TENs and identified fourteen priority rail networks and motorways, such as a high-speed train
link between Erfurt and Nuremberg in Germany
and a road-rail tunnel through the Brenner Pass.
Jacques Santer (Delors's successor) put the
TENs at the forefront of his Commission presidency, based partlyon the 1994 commitment,
which he had given as Luxembourg's prime minister. TENs also became a symbolic centerpiece of
Santer's job-creating initiative, the proposed Confidence Pact on Employment. However, the TENs
soon not only became bogged down in technical
disputes such as the interoperability of signaling
standards but also were derailed by their excessive
cost. Funding through the structural funds, cohesion fund, loans from the European Investment
Bank, and guarantees from the specially created
European Investment Fund could cover only a
small part of the projected ECU 1.8 billion cost. To
make up the large shortfall, Santer proposed using
more than ECU 1 billion of surplus funds from the
EU farm budget. Santer came elose to winning
support for reordering budget priorities at the Florence sumrnit in June 1996. Ultimately he failed to
do so because of member-state opposition to large
public spending projects at a time of financial retrenchment that was partly the result of the convergence criteria for Economic and Monetary Union
(EMU) and partly of the unexpected cost of compensating farmers for losses as a result of the
bovine spongiform encephalopathy beef crisis.

Despite Santer's apparent abandonment of

the TENs after the Florence sumrnit, he continued
to fight for his original action plan on employment, although employers and trade unions were
skeptical of the pact's usefulness. Santer's inability to secure TENs funding and engender enthusiasm for the confidence pact was a political setback
for the Comrnission president.
See also TRANSPORT POLICY.

Translation Center for Bodles

of the European Union
Situated in Luxembourg as part of an EU-wide
agreement on the location of EU agencies, centers, and institutions, the EU Translation Center
for Bodies of the European Union began functioning in December 1994. The center, which serves
most EU entities, was established to reduce costs
in the EU by avoiding replication of resources and
minimizing the expansion of logistical support
services such as terrninology, documentation and
libraries, and computer and telmatics units. Although linked to the Comrnission, the center has a
separate legal personality, administration, and
budget.

Transparency
In response to a perceived crisis of legitimacy in

the EU, and in an effort to elose the "democratic

deficit," EU institutions have promised greater
openness and transparency in the conduct of their
business. In particular, at an interinstitutional conference in Luxembourg on October 25, 1993, the
Council, Commission, and European Parliament
(EP) issued a deelaration on democracy, transparency, and subsidiarity that promised to make
the institutions more open and thereby easier for
ordinary citizens to understand. The Council
agreed to take the following steps:

open some meetings to the public

publish records and explanations of its voting
publish common positions
improve information for the press and the
public on its work and decisions
improve general information on its role and
activities
simplify and consolidate legislation in cooperation with the other institutions
provide access to its archives.

460

Transport Policy

The Commission agreed to do the following:

undertake wider consultations before presenting proposals

issue more green and white papers
publish in the Official Journal brief summaries
of impending proposals, with a deadline for
parties interested in submitting comments
publish work and legislative pro grams in the
Official Journal
include in its annual legislative program
plans for the consolidation of EU legislation
provide easier public access to documents
improve knowledge of existing databases and
their accessability, including improving the
relay networks
prepare an interinstitutional yearbook giving
details of each institution's organizational
chart
speed publication of documents in all EU languages
adopt a new and more prominent information
and communication policy
enhance coordination of information activities both inside and outside the Commission
adopt measures to facilitate the public's understanding of Commission business
provide a suitable response to requests from
the media
improve the treatment of phone, mail, and
personal contacts between citizens and the
Commission
encourage self-regulation by interest groups
by asking them to draft a code of conduct and
a directory
create a database on interest groups, which
could be used by the public and by EU officials.

Finally, the EP confirmed the public nature of its

committee meetings and plenary sessions.
Despite these declarations, for procedural
reasons the Council, especially, has been slow to
open up. Indeed, the limits of the agreement were
soon tested when Britain's Guardian newspaper
took the Council to court for failing to hand over
the minutes of certain meetings. The European
Court of Justice (ECJ) ruled in 1995 in favor of
the British paper and imposed on the Council the
obligation to justify decisions not to release material of this kind. The ECJ's ruling coincided with
the accession to the EU of Sweden and Finland,

countries with strong traditions of openness in

public life.
As part of the effort to bring the Union closer
to its citizens, the Amsterdam Treaty included a
chapter on transparency, which gives "any citizen
of the Union, and any natural or legal person residing or having its registered office in a member
state ... a right of access to European parliament,
Council and Commission documents .... "
See also DEMOCRATIC DEFICrr; LEGITIMACY.

Transport Pollcy
Although envisaged in the treaties of Paris and
Rome and the subject of many Commission proposals, a common transport policy (CTP) has proved an
elusive goal for much of the EU's history. Blueprints for such a policy have generally comprised a
mixture of harmonization and liberalization: coordination of investments and common rules of the
game would allow for lower logistical costs while
an integrated open market would deliver competitive benefits. However, the pervasiveness of govemment intervention in national transport markets and
public ownership of many transport industries
meant that relatively little was achieved.
Given the economic bias of the treaties it is not
surprising that the main focus of transport policy
was regarded as the inland transportation of goods.
Road, rail, and river were regarded as the main conduits for intra-Community trade, and questions of
maritime and air transport were explicitly-if temporarily--excluded under Article 84 of the Rome
treaty. Throughout the 1960s various attempts
made to promote a CTP-normally involving gradualliberalization of markets and a harmonization of
fiscal, social, and technical conditions-came to
very little (only a few proposals were agreed to in
the road haulage and railway sectors, and these had
little impact on transport operators or consumers).
The enlargement of the Community slowed the debate in the 1970s as the range of interests to be accommodated widened. The lack of progress in
agreeing on Community policies for the transport
sector was such that in 1983 the European Parliament decided to take the Council of Ministers to the
European Court of Justice (ECJ) on the grounds
that it had failed to act on its treaty obligations. The
ECJ's judgment obliged the Council to move more
substantially on a common policy, particularly in
those areas where transport services needed to be
opened up to intra-Community competition.

Transport Policy

The ECJ's ruling underpinned the Commission's decision to make transport one of the priorities of the single market initiative. The 1985 white
paper outHned a number of initiatives designed to
open up transport services: the end of quotas on
transport of goods by road, freedom of services for
road passenger transport, cabotage rights in freight
transport by road and inland waterway, and liberalization of sea and air transport services. In addition, the Commission sought liberalization of frontier controls to permit freer flow of transport and a
harmonization of indirect taxation regimes that impinged on the transport industries. Spurred by the
Court's ruling and strengthened by a new willingness to use competition rules if a11 else failed, the
Commission made considerable progress on transport policy in the second half of the 1980s (though
the pace of reform was-by any standard other
than the Community's-still very slow).
By 1997 the introduction of market forces to
the transport sector was almost complete. (1) In
the air transport sector, full liberalization took
place in spring 1997, and policy is now concentrated on ensuring that free competition is possible
and that congestion at airports and in airspace is
lirnited. The Commission has also sought to playa
roIe in liberalizing markets with external partners.
(2) In the shipping sector, the liberal orientation of
maritime policy has been strengthened with
greater competition policy controls on the industry and fewer attempts to support the sector
through subsidies and protection. (3) In the inland
waterways sector, the focus has been on reducing
surplus capacity and limiting market sharing
arrangements. (4) In the road haulage sector,
much of the process of market opening had been
finalized by the rnid-1990s, but with only a modest impact on competition. (5) In the rail sec tor,
liberalization has progressed more slowly, with
the emphasis on the separation of infrastructure
and services and on greater accounting transparency. Competition was restricted initially to
freight transport and international passenger transport. Although the Commission has proposed an
extension of market opening (inc1uding competition for franchises on local services), there is little
chance of agreement in even the medium term.
Market liberalization has never been the only
objective of European transport policy, however,
and other elements began to gain a higher profile in
the late 1980s, in partieular infrastructural questions and the impact of transport on the environ-

461

ment. The infrastructural issue-addressed outside

of the CfP framework for many years through the
application of structural funds to poorer member
states and regions--<:ame to the fore with the initiative on Trans-European Networks (TENs). Transport is by far the most important network industry
in the program, though te1ecommunications and energy are also covered. The TENs initiative was designed to improve linkages between and within
member states and received endorsement in the
Treaty on European Union. Transport research policy has been geared toward streamlining new networks and promoting new transport technologies,
though finances have been lirnited.
Liberalization and TENs have generally been
seen as at odds with the other major trend in European transport policy: protection of the environment. Although environmental considerations have
been invoked in connection with European transport policy for a number of years, it was only in the
mid-1990s that the issue was taken seriously. In
1992 a Commission white paper, The Future Development 0/ the Common Transport Policy, shifted
the deve10pment of transport policy toward the environment. Introducing the concept of "sustainable
mobility," the white paper indicated that with an
open transport market in place, the focus of policy
would shift toward dealing with the social and environmental dimensions. According to the Commission, the poliey priorities now cover five main
themes: the deve10pment and integration of the EU
transport system, safety in transport, environmental
protection, social protection, and external relations.
The first fruits of the white paper-proposals for
road pricing and improved access to public transport (the so-called citizens' network)-have surfaced, though it is unclear how they can be translated into effective Community policies.
The past ten years have seen more of the
Commission's proposals on transport translated
into policy, particularly in the area of market liberalization, but it remains debatable whether taken
together the various EU initiatives constitute a
CTP. Even in their own right there are grounds for
questioning the effectiveness of poliey: liberalization of air transport has been severely comprornised by the granting of substantial state aids to a
number of government-owned airlines, and the
TENs program was held up by disputes between
the Community institutions. The tensions between
different programs-between the competition
ethos of liberalization and the planning ethos of

462

Treaties of Rome

the TENs, and between the growth-Ied perspective

of TENs and the sustainability of environmental
policy-make it hard to reconcile the conflicting
objectives inherent within EU transport policy.
See also 'fRANS-EUROPEAN NETWORKS.
Bibliography
Abbati, C. 1987. Transport and European Integration.
Brussels: Comrnission.
Commission. 1992. The Future Development 0/ the
Common Transport Policy. COM(92)494. Luxembourg: Office for Official Publications of the European Communities.
1995. Citizens Network Community.
COM(95)601. Luxembourg: Office for Official Publications of the European Communities.
Erdmenger, J. 1983. European Community Transport
Policy: Toward a Common Transport Poliey. Aldershot: Gower.
Whiteleg, J. 1988. Transport Policy in the EEC. London: Routledge.

-Francis McGowan

Treatles of Rome
See TREATY OF ROME.

Treaty of Maastrlcht
See MAASTRICHT TREATY.

Treaty of Paris

Signed in Paris on April 18, 1951, by representatives of France, Germany, Italy, Belgium, the
Netherlands, and Luxembourg, the Treaty of Paris
established the European Coal and Steel Community (ECSC). The treaty mandated a common market in coal and steel, to be administered by a High
Authority, a novel supranational executive. It also
created a Council of Ministers, a Common Assembly (the future European Parliament), and a Court
of Justice. The ECSC began operating in August
1952, with its headquarters in Luxembourg. The
treaty is due to expire in 2002.
See also EUROPEAN COAL AND STEEL COMMUNITY; SCHUMAN, ROBERT.

Treaty of Rome
Although there are two treaties of Rome, one establishing the European Economic Community
(EEC) and the other the European Atomic Energy

Community (EURATOM), the Treaty of Rome

generally refers to the former. The EEC originated
in a proposal in 1952 by Johan Willem Beyen, foreign minister of the Netherlands, to abolish quotas
and tariffs on intra-Community trade, establish a
joint external tariff, unify trade policy toward the
rest of the world, devise common policies for a
range of socioeconomic sectors, and organize a
single internal market. The Beyen Plan survived
the defeat of the proposed European Defense
Community (EDC) in August 1954 and was a
point of departure for the intergovernmental conference (IGe) in 1955 and 1956 to relaunch European integration.
The proposed common market was particularly contentious in France, with its history of protectionism and subsidization. Only by winning a
concession from France's partners to include
clauses in the proposed treaty guaranteeing assistance to France's overseas pos sessions (the future
Lome convention) and embracing agriculture in
the common market (the future Common Agricultural Policy) did the French parliament agree to a
continuation of negotiations. The IGe eventually
ended in aseries of high-level meetings in February 1957.
The preamble of the draft treaty was far less
flamboyant than that of its European Coal and
Steel Community (ECSC) predecessor, referring
only to the signatories' determination "to lay the
foundations of an ever closer union among the
peoples of Europe." The treaty itself outlined the
essential principles of the common market: the
free movement of goods, persons, services, and
capital; a customs union and common external tariffs; and various Community policies (e.g., agriculture, transport). The EEC's institutional framework emulated that of the ECSC but included a
stronger Council of Ministers and a correspondingly weaker Comrnission (because of the odium
attached to supranationalism in the wake of the
EDC debacle, the name Commission replaced the
more pretentious High Authority of the ECSC in
the Treaty of Rome). The EEC was to share an assembly (the future European Parliament) with the
ECSC and EURATOM. Representatives of
France, Germany, Italy, Belgium, the Netherlands,
and Luxembourg signed the two treaties at an
elaborate ceremony in Rome on March 25, 1957.
Treaty ratification was problematic in France
and Germany. In France, the problem was posed
not by concerted Gaullist and Communist opposi-

Treaty on European Union (TEU)

tion (as was the case in 1954, when the French assembly rejected the EDC treaty) but by the government's fall during the early summer. Jean Monnet's Action Committee for a United States of
Europe was instrumental, if not decisive, in ensuring swift and successful ratification in France of
the Treaty of Rome. First, the Action Committee
pressed for early ratification in the German parliament. The committee's influence helped win the
support of the Social Democratic Party, which had
previously opposed both the ECSC and the EDC.
With German ratification secure, the Action Committee turned its attention to the French National
Assembly, where a cornfortable majority endorsed
the treaty on July 9, 1957. By the end of the year,
the six signatories had ratified the treaty, allowing
the EEC to begin operating on January 1, 1958.
The treaty has been amended numerous
times, most significantly by the Single European
Act (1986), the Treaty on European Union (1992),
and the Amsterdam Treaty (1997).
See also EUROPEAN EcONOMIC COMMUNITY.

Treaty on European Union

(TEU)
Agreed to in the southem Dutch city of Maastricht
during the early hours of December 11, 1991,
signed there on February 7, 1992, and coming into
force on November 1, 1993, the Treaty on European Union (TEU) is one of the most complicated
and controversial elements in the history of European integration. Its significance, roots, contents,
effectiveness, and public acceptability are all
deeply problematic.
The TEU's comprehensive aspirations, together with the political responses it provoked,
justify those who see it, rather than the Single European Act (SEA), as the most far reaching and
comprehensive constitutional change in the EC's
his tory. The TEU is important, above all, for its
endorsement of Economic and Monetary Union
(EMU). Equally, it made the process of European
integration more politically salient than ever before. Yet ifthere is broad agreement on these facts,
there is deep discord about their meaning.
Politically, the two main contending interpretations see the TEU as a rupture with the past. The
view associated with then British prime minister
John Major sees the TEU as a victory for intergovernmentalism, whether over the menace of excessive supranationalism (Crawford, 1993) or over the

463

integrity of the acquis communautaire (Curtin,

1993). The contrary interpretation, urged by Sir
James Goldsmith and other Euroskeptics, views
Maastricht as the triumph of a virtually full-fledged
European federation over previous traditions of democratic states agreeing on loose economic coordination, whether laissez-faire or social democratic in
nature (Guildhaudis, 1993, pp. 117-136).
The TEU is thus a many-faceted phenomenon. As weIl as being a historical event it is a symbol of a deep underlying ideological argument
about the nature and direction of the European enterprise, aseries of written changes to the primary
law of the EC, and the enactment of wide-ranging
changes to the way the European enterprise is organized and operates. This multifaceted nature has
greatly affected how the TEU has been applied,
esteemed, and interpreted. Even today there is little agreement or certainty about it, with very contradictory readings in different countries, most of
which can find some justification within the treaty
itself. However, the weight of opinion sees the
treaty as essentially an intricate but uncertain
compromise between the competing aspirations
and imperatives of the time (Church and Phinnemore, 1995). The TEU therefore has a Januslike nature: centralized, ideological, and radical in
its EMU provisions; evolutionary and more statist
in its political stipulations (Dyson, 1994).
Origins

The TEU had its earliest roots in spillover from the

single market project, which was seen as needing a
single currency to consolidate it (Cloos et al. ,
1993). This led to the April 1989 Delors Report on
EMU, on the basis of which the European Council
decided in December 1989 to convene a new intergovernmental conference (IGC) on EMU. By then,
however, the fall of the Soviet empire and the likely
unification of Germany added new factors to the
equation: notably the determination of German
chancellor Helmut Kohl and French president
Fran~ois Mitterrand to ensure that an enlarged Germany would be Europeanized and, through new EC
structures, amenable to French influence (Baun,
1996). Their ideas were widely discussed and technically developed in the summer of 1990. Final decisions about the start of negotiations on European
political union (EPU) as weIl as EMU were taken
in late October at a difficult summit in Rome.
The argument for EPU was reinforced by the
revelation of European weakness during the

464

Treaty on European Union (TEU)

1990-1991 Gulf crisis and subsequent war. It was

hoped that the onset of the Yugoslav crisis later in
1991 might be the springboard for creating a more
effective international presence, especially as the
SEA had, in any case, provided for a review of
European Political Cooperation (EPC), the member states' foreign policy coordinating mechanism. The move to EPU was also strongly supported by those in the European Parliament (EP)
and in the Commission who feIt that the SEA had
not gone far enough.
This showed itself in the perhaps unfortunate
decision to have separate talks on economic and
political union. Both IGCs initially consisted of
monthly meetings at ministerial and officiallevels.
Although the negotiations were essentially intergovernmental and guided by the presidency, they
were not wholly secret (Corbett, 1993). The EMU
talks, involving the Commission, Monetary Committee, and central bankers, were the easier of the
two and proceeded on the basis of a Commission
draft put on the table on December 15, 1990. Key
issues concerned the details and timing ofthe strategy laid down in the Delors Report. By May the
idea of an opt out helped to ease British reservations, making an agreement possible. Only a few
issues were left to resolve at Maastricht itself.
On EPU, because there had been much less
preparation, there was far less agreement in the
IGC about either agenda or substantive issues
(Laursen and Vanhoonacker, 1992). Little
progress was made until the Luxembourg presidency put on the table an informal proposal in
April 1991 for a three-pillar structure (the socalled temple approach), which most member
states accepted. Thus, despite opposition from the
Commission and the EP, the Luxembourg draft
became the basis of a formal proposal on June 20.
However, the inclusion of a commitment to a "federal goal" reawakened British opposition.
Talks faltered over the summer and did not
resurne untillate September, when the Dutch presidency misguidedly produced a new proposal
based on a single or "tree" structure, which most
member states rejected at a heated foreign ministers meeting on the so-called Black Monday, September 21, 1991. The Dutch had to go back to the
Luxembourg proposals in October and November,
but time had been wasted even though the IGC
was already running to try and catch up. Tempers
flared, and despite more frequent meetings, a large
number of issues were left undecided when the

European Council met in Maastricht in December

1991. The Dutch prime minister, Ruud Lubbers,
managed to resolve the outstanding issues after
some hard and secretive late night bargaining, especially with Kohl and Major, involving deals on
social policy opt outs for Britain and on tough
EMU convergence conditions.
The questionable pressure to finish the
process at Maastricht meant that the texts were
unpolished. They were refined, but not consolidated, until they were signed by foreign ministers
on their return to Maastricht on February 10, 1992
(a meeting that also served as the requisite IGCs
for European Coal and Steel Community and European Atomic Energy Community treaty revisions).
The final product signed in Maastricht was a
sprawling and unraveling document, 61,351
words long. It comprised a preamble and seven titles, each divided into many chapters, parts, and
sections, linked by a continuous series of articles
(from A to S), many of which were actually
amendments to the differently numbered articles
of the existing treaties. Thus Article G, or Title 11,
accounted for 30 percent of the TEU, with its
eighty-six amendments to the Rome treaty. Accordingly, the TEU could not be followed without
reference to the text of the existing treaties.
Therefore the TEU was an emendation and
expansion within a revised structure and not a
complete rewriting of the treaties. The result was a
style that many have found arcane, boring, and
impenetrable. The TEU is also variable in tone,
oscillating between simple principles and immensely detailed policy statements (as with
EMU). The treaty proper was also followed by
seventeen explanatory protocols and thirty-four
nonbinding interpretative declarations. The whole
thing was subsequently consolidated with the
Rome treaties and further amended by the 1994
accession treaties and the 1997 Amsterdam Treaty.
Contents

The TEU makes wide-ranging changes to the EC's

quasi constitution. Central to these is the creation
of an overarching new body, the EU, which subsumes the EC itself. The latter was made the
largest of three pillars that support the European
Council, the pediment of the temple. The other
two pillars are intergovernmental organizations
for the Common Foreign and Security Policy
(CFSP) and Cooperation on Justice and Horne Af-

Treaty on European Union (TEU)

fairs (JHA). The Social Protocol and EMU can

also be regarded as pillars of a sort, the latter because of the independence of the European Central Bank (ECB).
The EU has clear aims and characteristics:
acceptance of the acquis communautaire, maintenance of its external identity and security, and the
upholding of democracy, human rights, and national identities. This involves the acceptance of
subsidiarity (the principle that, outside its own
competences, the EU should only act when such
action cannot be undertaken more effectively by
the member states, and then only in measured
ways) and the creation of EU citizenship. The EU
is guided by the European Council, works with a
single institutional framework, and seeks consistency in its operation.
The TEU also redefined the status and operation of the EC, which is now a subsidiary body of
the EU; membership in the EC comes with membership in the EU. Yet the EC is also the enabler
and motor of the EU. The EPU and EMU accords
also meant considerable internal alterations to the
EC as such.
Specifically, EPU changed the EC in five
main ways. (1) The EC is now required to respect
subsidiarity and to apply EU citizenship. (2) The
EC's institutional structure and balance are altered
and clarified, with recognition of the Committee
of Permanent Representatives (CO RE PER) and
the Council secretariat, full institutional status for
the Court of Auditors, creation of an Ombudsman
and a Committee of the Regions, and altered roles
for the Commission and the Econornic and Social
Committee. Most significantly, the EP's powers
have been enhanced to include involvement in the
appointment of the Commission. (3) Decisionmaking procedures are altered, with more qualified majority voting linked to the EP's new, initially limited, rights of legislative co-decision
under Article 189b. (4) The EC' s operations are
subject to new budgetary and constitutional controls, including allowing the European Court of
Justice (ECJ) to fine defaulting member states.
The EC's judicial organization was also refined.
(5) Some EC policy responsibilities were enhanced, notably cohesion, the environment, and
research. New competences were also added in aspects of consumer protection, culture, development, education, public health, and Trans-European Networks. In social policy, because of
British objections, some action was relegated to a

465

special procedure laid down in Protocol 14. This

allowed the other member states, acting together,
to use the EC infrastructure to implement the 1989
Social Charter. Other aspects of social policy were
also underlined by protocols, as were other detailed aspects of EPU. Basically, however, the EC
remains supranational.
The EMU changes were, and remain, more
dramatic. They include a new stress on coordinating and monitoring national economic performance and policies together with redistribution to
rnitigate regional differences, so as to assist the realization of EMU. The latter involves a scheduled
move, open to those member states that meet the
convergence conditions, to a monetary union with
a single currency, adrninistered by the ECB and
the European System of Central Banks (ESCB).
Britain and Denmark have been allowed to opt out
of this process should they so choose. This is detailed in the protocols, as are the rules governing
the various monetary institutions and processes.
The CFSP is a key element of the new EU,
replacing EPC. It extends external initiative and
responsibility by providing a new policy instrument of common actions in support of more
clearly defined policy ends and positions (Holland, 1995). The EU's general positions are decided intergovemmentally, although the Commission is associated with them; qualified majority
voting is possible in implementing common actions. However, the ECJ is largely excluded because the CFSP is not part of the Community.
CFSP also looks toward the possible development
of a common defense policy and even a common
defense. In the interim an enlarged Western European Union (WEU) is to serve as the EU's security arm, details of which are laid down in aseries
of declarations (signifying their intergovemmental
origins). As a result, the TEU brought security
into the mainstream of European integration.
There is also aseparate intergovernmental
pillar for JHA, dealing with asyl um, cross-border
problems, customs, drugs, fraud, immigration policy, judicial cooperation, and police coordination.
JHA cooperation operates through methods sirnilar to those available in the second pillar, plus intergovemmental conventions, and is underlined by
aseries of declarations.
Finally, the TEU included a commitment to
further treaty review, which formed the basis of the
1996-1997 IGC and the ensuing Amsterdam
Treaty.

466

Treaty on European Union (TEU)

Ratification
Maastricht differed from previous treaty changes in
the way that it embodied conflicting views about
integration. These exploded into the public domain
when the process of ratification was halted by the
Danish electorate's rejection of the TEU in a referendum on June 2, 1992 (Laursen and Vanhoonacker, 1995). Despite a successful referendum
in Ireland in June, the TEU's fortunes were further
undermined in late September 1992 when the currency markets forced the lira and sterling out of the
Exchange Rate Mechanism of the European Monetary System and when, after a bruising campaign,
the French electorate approved the treaty in a referendum on September 20, 1992, by only the narrowest of margins (less than 2 percent).
Although most other countries ratified easily
enough and a solution to the Danish crisis, agreed
to at the Edinburgh summit on December 11 and
12, 1992, was approved in a second referendum
on May 18, 1993, the crisis worsened in Britain.
Euroskeptics held up parliamentary hearings for
months and twice nearly brought the government
down before ratification was achieved. Even then
there were further problems with a new exchange
rate crisis in August 1993 and achallenge in the
German Constitutional Court, which ruled on October 12, 1993, that the TEU was compatible with
the country's constitution.
Although the extent of opposition can be exaggerated, ratification showed that the permissive consensus that had buoyed European integration in the past could no longer be relied
upon. Worried by the treaty's implications and by
domestic political and economic difficulties,
public opinion began to query the integration
project. In this debate on integration, held at a
difficult time, the TEU became the symbol of
what was wrong with Europe in some quarters.
And as opposition to the treaty became increasingly militant, elites failed to respond to the challenge. When, many months late, the treaty unceremoniously entered into force, it did so in an
atmosphere of bitterness.
Conclusion
Overall the TEU has resulted in a certain rationalization of existing practices while opening the
way for future constitutional developments. The
reflection group of foreign ministers' personal
representatives, which prepared the 1996-1997
IGC, saw the TEU's innovations as the creation of

an ongoing EU; an attempt to bring European integration closer to the citizens, regions, and states;
an enhanced capacity for policy activity; a reaffirmation of the importance of cohesion; the beginnings of a European foreign policy; concern for
social security against crime and drugs; and, especially, a commitment to monetary integration and
a single currency (Reflection Group, 1995).
Set against these achievements are three serious weaknesses: (1) the EU's complexity, impenetrable language, and lack of transparency; (2) failure to achieve the IGC's original aims of greater
accountability, consistency, democratization, financial control, and subsidiarity (Piris, 1994); and (3)
deficiencies in the treaty's innovations (Dashwood,
1996). In particular, the manifold decisionmaking
procedures have proved problematic; several institutions feel they did not get the decisionmaking capacity that they need to do their job; and there have
been difficulties in reconciling the three compartmentalized pillars with their different working
methods. Finally, the non-EC structures have neither delivered effective policy and action nor made
the EU sufficiently intergovernmental to satisfy
those who wish to roll back "BrusseIs." Thus the
TEU's suitability for an enlarging EU, capable of
meeting the challenges of the twenty-first century,
is questionable.
See also ECONOMIC AND MONETARY UNION:
POLITICAL ISSUES; ECONOMIC AND MONETARY
UNION: TOWARD A SINGLE CURRENCY; EUROPEAN
POLITICAL UNION.

Bibliography
Baun, M. J. 1996. An ImperJect Union. Boulder: Westview.
.
Church, C. H., and D. Phinnemore. 1995. European
Union and European Community: A Handbook and
Commentary on the 1992 Maastricht Treaties. 2d ed.
London: Prentice Hall.
Cloos, J., G. Reineseh, D. Vignes, and J. Weyland. 1993.
Le Traite de Maastricht. Brussels: Bruyant.
Corbett, R. 1993. The Treaty 01 Maastricht. London:
Longman.
Crawford, M . 1993. The Economics and Politics 01
Maastricht. London: Macmillan.
Curtin, D. 1993. "The Constitutional Structure of the
Union: A Europe of Bits and Pieces." Common Market Law Review 30, pp. 17-69.
Dashwood, A., ed. 1996. Revising Maastricht. London:
Sweet & Maxwell.
Dyson, K. 1994. Elusive Union. London: Longman.
Guildhaudis, J. F. 1993. L'Europe en transition. Paris:
Montchrestien.

Turkey
Holland, M. 1995. The EU's Common Foreign and Security Policy. London: Macmillan.
Laursen, F., and S. Vanhoonacker, eds. 1992. The Intergovemmental Conference on Political Union. Maastricht: Nijhoff.
- - - . 1995. The Ratification of the Maastricht
Treaty: Issues, Debates and Future Implications.
Maastricht: Nijhoff.
Piris, J.-c. 1994. "After Maastricht: Are the Comrnunity
Institutions More Efficacious, More Democratic and
More Transparent?" European Law Review 19, no.
5, pp. 449-487.
Reflection Group. 1995. Report ofthe Reflection Group.
Bulletin EC 12-1995. Luxembourg: Office for Official Publications of the European Comrnunities.

-Clive Church

Trevl Group
The so-called Trevi Group of senior officials from
member states' ministries for justice and horne affairs coordinated intra-EC cooperation to combat
terrorism, drug traffic, organized crime, and illegal immigration before the Treaty on European
Union (TEU) incorporated these activities into the
third pillar of the EU.
See also JUSTICE AND HOME AFFAIRs.

Troika
Originally the troika was an arrangement whereby
each Council presidency, at all levels of govemment, was assisted by its immediate predecessor
and successor (in the presidential rota) in the conduct of the Common Foreign and Security Policy
(CFSP). Before the CFSP was launched in November 1993, the troika helped conduct European
Political Cooperation, CFSP's predecessor. The
Amsterdam Treaty abolished the old troika and instituted a new one for the conduct of CFSP: the
Council presidency (assisted by the next country
in line), the high representative (Council secretary-general), and the Commission president (or
other senior comrnissioner).
See also COMMON FOREIGN AND SECURITY
POLICY.

Turkey
Historically, Turkey's relationship with Europe
has been turbulent and antagonistic. However, for
many years Turkey has proclaimed and pursued a

467

"European vocation." The first shift in this direction was in 1856 when Turkey was accepted into
the Concert of Europe after fighting on the side of
France and Britain in the Crimean War. The second, and more significant turning point, was the
reform program of Turkey's modemizing leader,
Kemal Atatrk, in the 1920s. Key elements of this
program incIuded the adoption of the European
(Gregorian) calendar, the Swiss Civil Code, and
the ltalian Penal Code and the disestablishment of
the state religion and adoption of the European
(Latin) alphabet. The purpose was modernization
through Westernization (more narrowly defined as
Europeanization). Turkey joined the League of
Nations after World War I and was most upset
when it was excIuded from French foreign minister Aristide Briand's proposal at the league in
1929 for a European union. Turkish foreign policy
after World War 11 continued in the same vein,
with Turkey joining the Organization for Economic Cooperation and Development (OECD) in
1948, the Council of Europe in 1949, and NATO
in 1952.
It is therefore not surprising that Turkey has always showed great interest in European integration
and has pursued a cIose relationship with the EU
since its beginnings. In fact EC-Turkey relations
can conveniently be divided into five phases: optimism (1960s), crisis (1970s), standstill (1980s),
progress (early and mid-1990s), and uncertainty.
Turkey's initial approach to the EC took the
form of arequest for an association agreement and
mirrored a similar application by Greece. However, negotiations with Turkey were delayed by an
antidemocratic coup, as a result of which the
Ankara Agreement was not signed until September 12, 1963 (and did not become effective until
December 1, 1964). It consisted of three stages:
(1) apreparatory stage of five to nine years, involving EC concessions for Turkey's four principal agricultural exports (tobacco, raisins, dried
figs, and hazelnuts) and the provision of ECU
175 million of loans over five years; (2) an ensuing transition al stage of twelve to twenty-two
years, during which time the EC and Turkey
would align economic policies and move to a customs union; and (3) a final stage, at the end of the
transitional stage, that could involve full EC membership, although no timetable was specified for
this.
The purpose of the preparatory stage was to allow Turkey time to ready itself, through appropriate

468

Turkey

economic measures, for the creation of a customs

union and for full EC membership in the longer
term. However, although there is some controversy
over this, it should be noted that EC accession appears to have been set out not as an automatie progression but rather as a possibility (or objective) to
be examined when and if Thrkey was ready.
A subsequent agreement was necessary to fill
in the details of the transitional stage (the additional protocol was agreed on November 3, 1970,
and became effective on January 1, 1973). Its
main provisions were the introduction of free
movement of labor and capital between the EC
and Thrkey from the twelfth to the twenty-second
years of the transitional stage, eloser alignment of
economic policies, and a (second) financial protocol. As with the right to automatie accession in the
initial agreement, there have been different interpretations of the agreed-upon timing of the implementation of the commitrnent to introduce free labor movement.
However, the optimism of the 1960s was replaced by crisis in the 1970s. Turkey did not use
the preparatory stage to strengthen its economy,
and the association agreement broke down economically in the mid-1970s. There was fault on
both sides: Turkey was pursuing an economic
strategy based on import substitution that was essentially incompatib1e with association; equally,
the EC was reluctant to implement fully its concessions to Turkey in the face of enhanced competition for its own producers. In any case, the agreement was finished off politically by the 1980
military coup in Turkey and was effectively suspended thereafter. The restoration of democracy
and subsequent formal Turkish application for full
EC membership in 1987 did not trigger any immediate developments. The 1980s were therefore a
period of standstill, and further progress had to
wait until the Commission issued its formal opinion on the Turkish application on December 20,
1989.
In fact, the opinion was tantamount to a rejection of Thrkey, although it did not elose the door
entirely but proposed four specific measures:
completion of the customs union; the resumption
and intensification of financial cooperation; the
promotion of industrial and technological cooperation; and the strengthening of political and cultural links. In effect, this amounted to a revised
and improved association agreement. The opinion
echoed many of the arguments that make up the

generally accepted assessment of the Thrkish case

for EU membership, which cover four types of issues: economic, political, strategie, and cultural.
According to the Commis sion, Thrkey scores positively only in the strategie area.
In the economic sphere, there are many concerns. Turkey is large and re1atively poor and
would expect to be a substantial beneficiary from
the EU budget. It would make heavy demands on
the structural fundsand, because of its large agricultural sector, on the Common Agricultural Policy. More generally, Turkey is inflation prone and
debt ridden, with low levels of productivity and
low social standards, but high levels of industrial
proteetion. Obviously, Turkey could not participate in Economic and Monetary Union in the foreseeable future. Finally, the movement of Thrkish
workers into the EU (free or otherwise) and the
presence of existing Turkish migrants continue to
be a source ofEU-Thrkish friction.
On the internal political front, there is anxiety
about the intentions of the Islamic Welfare Party,
which was in a coalition government in 19961997. More specifically, although the Turkish
government would strongly defend its human
rights record and point out that significant legal
and constitutional reforms have been undertaken
in recent years, the perception remains, in Europe
and elsewhere, that there are still major deficieneies. In particular, Thrkey's treatment of its Kurdish minority has been a source of unease. Moreover, general lack of respect for human rights is
allegedly widespread in Thrkey and has attracted
much condemnation in the European Parliament
over the years. Turkey also faces an external political problem in the shape of its very difficult relationship with Greece. The most obvious manifestation of this is the so-called Cyprus problem, the
resolution of which was seen for some time as a
prerequisite to Turkish accession. The importance
of this is now less elear following the EU's commitment to begin accession negotiations with
(Greek) Cyprus. However, it is certain that GrecoTurkish animosity will continue over Cyprus and,
more generally, in the Aegean Sea over the demarcation of territorial waters, the continental shelf
(and mineral rights), and air space disputes. The
Greeks seemingly remain ho stile to Thrkey's joining the EU and have frequently blocked various financial protocols directed toward Thrkey.
The third negative area concerns cultural issues, particularly religion. European une ase has

Two-Speed furore

its basis in the historical enmity between Europe

and the Ottoman Empire; in the modern era, this
uneasiness takes the form of anxiety about the rise
of the Islamic Welfare Party and the more extreme
shift toward Islamic fundamentalism in some
other parts of the Mediterranean region. Turkey
resents such an attitude, reasoning as a secular
state that feels there are significant Muslim minorities in some existing EU members and that a
yardstick is being applied to Turkey that has not
been, and is not being, applied to any other
prospective member.
Finally, there is the strategic perspective,
which is considered to be in Turkey's favor. Traditionally Turkey's value has mainly stemmed from
its role as protector of NATO's eastern Mediterranean flank, specifically against the threat of Soviet expansion out of the Black Sea. The demise
of the Soviet Union made this less important but
was offset by the outbreak of the Gulf War, which
increased Turkey's importance as an ally and base
for the EU and the rest of the Western alliance in
the Middle East. Furthermore, Turkey now plays a
key role as a model of a secular, democratic, Islamic state for the formerly Soviet, central Asian
republics.
Turkey has thus presented the EU with something of a dilemma. Economic and political factors in principle, and Greek attitudes in practice,
make it difficult for the EU to welcome Turkey as
a full member in the immediate future. However,
strategic considerations and general acceptance of
Turkey's eligibility make outright rejection impossible. Although Turkish accession is not immediately in prospect, it finally proved possible to establish an EU-Turkey customs union, applicable
to industrial goods only, as of January 1, 1996.
The agreement also made reference to intellectual
property rights and rights of establishment and relaunched and extended economic cooperation, financial cooperation, and political dialogue. The
customs union will take time to become fully effective, and there have been early problems in
some sectors (especially steel and secondhand
machinery), but the early signs are encouraging.
Increased European competition appears to have
driven down Turkish prices, and European investment in Turkey continued at record levels in 1996

469

and 1997. It remains to be seen whether the Turkish economy can sustain a customs union with the
EU in the longer term, although the political situation in Turkey is probably a greater threat to the
stability of EU-Turkey relations.
There is a spectrom of possibilities. Optimistically, Turkey may successfully implement
the customs union with the EU and the prominance of the Islamic Welfare Party in Turkish politicallife may do little to change Turkey's behavior and foreign policy stance. Pessimistically, the
customs union may ron into difficulties and an Islamic party, if returned to power, could behave in
ways that justify EU concern. In the former case,
the EU will find it increasingly difficult to reject
Turkey's application definitively, especially after
it has begun to absorb the Central and Eastern European states in the middle of the next decade. In
the latter case, Turkish accession will become a
more distant possibility even than it seemed during the crisis provoked by the European Council's
decision, taken at the December 1997 Luxembourg summit, to defer action on Turkey's application. Of course, the reality may weIl lie somewhere between these extremes, but one thing is
certain: the EU cannot delay indefinitely pronouncing on Turkey's future.
See also MEDITERRANEAN POLICY; TABLE 6.

Bibliography

Redmond, John. 1993. The Next Mediterranean Enlargement 0/ the European Community: Turkey,
Cyprus, and Malta? Aldershot: Dartmouth.

-lohn Redmond

Twelve
Following the accession of Spain and Portugal in
1986, the EC was sometimes known as the
Twelve-the number of then member states. In
January 1995 the recently launched EU grew from
twelve to fifteen member states, when Austria,
Finland, and Sweden joined.

Two-Speed Europe
See DIFFERENTlATED INTEGRATION.

1995 by the merger of Forza Europe, an Italian

center-right party, and the European Democratic
Alliance, an already existing group of center and
center-right parties, including the Gaullists. The
UFE describes itself as "Euro-realistic," taking a
case-by-case approach to European issues and
avoiding extreme Euroskepticism or Eurofederalism. It is the third largest group in the EP.
See also PARTY GROUPS IN THE EUROPEAN
PARLIAMENT.

UFE
See

UNION FOR EUROPE.

Ukraine
See COMMONWEALTH OF INDEPENDENT STATES.

UN
See UNITED NATIONS.

Unanlmlty
Some decisions in the EU--especially those re1ating to the Common Foreign and Security Policy
and Cooperation on Justice and Horne Affairsrequire unanirnity in the Council of Ministers. Although there has been a trend toward qualified
majority voting in the Council in order to enact
legislation (institutional changes in the Single European Act, the Treaty on European Union, and
the Amsterdam Treaty were definite moves in that
direction), the Council likes, if possible, to act
unanimously. No member state wants to be outvoted, and ministers generally prefer to play by
the old ruIes, treating the Council as a club rather
than a legislature.
See also DECISIONMAKING PROCEDURES.

UNICE
See

UNION OF INDUSTRIAL AND EMPLOYERS' CON-

FEDERATIONS OF EUROPE.

Union for Europe (UFE)

The Union for Europe (UFE) party group in the
European Parliament (EP) was formed in July

Union of Industrial and

Employers' Confederatlons of
Europe (UNICE)
The Union of Industrial and Employers' Confederations of Europe (UNICE) is a powerful pressure
group representing business interests in the EU.
Founded in 1958, UNICE has a large secretariat in
its well-funded Brussels headquarters. UNICE's
priorities are market liberalization and deregulation. Not surprisingly, it strongly opposes social
policy. Together, UNICE, the European Trade
Union Confederation, and the European Center for
Public Enterprise make up the EU's "social partners" with whom the Comrnission negotiates draft
social and econornic policy legislation.
See also SOCIAL POLICY.

Unlted KIngdom
For some years after World War 11 successive
British govemments continued to think of their
country as a world econornic and political power
and as a result showed no interest in joining in the
experiments in European integration that were being pioneered by the six original member states of
the EC. However, by the start of the 1960s the
Conservative govemment of Harold Macmillan
had come to the conclusion that Britain ought to
apply for EC membership. This was for two reasons: the Six were achieving higher rates of econornic growth than the UK, and the govemment
was concemed about the efforts of French president Charles de GauBe to organize the EC into a
political entity under French leadership.
Britain's first application for membership,
subrnitted on August 9, 1961, was vetoed by de
GauBe on January 14, 1963; Britain's second application, subrnitted on May 10, 1967, suffered the
same fate only four days later. It was not until after de GauBe's retirement that Britain managed to

471

472

United Kingdom

negotiate entry, under the leadership of its genuinely pro-European prime minister, Edward
Heath. Membership was very controversial, particularly within the British Labour Party, which
after losing the 1970 election to Heath almost split
apart on the issue. Harold Wilson, the Labour
Party leader, retained unity by a compromise: he
deelared that Labour supported entry to the EC
but not on the terms negotiated by the Conservative govemment. When he retumed to office in
1974, Wilson set about renegotiating the terms of
entry and eventually presented the new terms to
the British people in a constitutionally unprecedented referendum in June 1975. This produced a
surprisingly large majority in favor of continued
membership: 67.2 percent against 32.8 percent on
a 64.6 percent tumout.
The referendum result, however, did not mark
the end of serious differences with the other member states, and Britain rapidly established a reputation for itself as an awkward partner in the EC
(George, 1994). James Callaghan, who succeeded
Wilson as Labour prime minister in 1976,refused
to take sterling into the exchange rate mechanism
of the European Monetary System in 1979; and
toward the end of his premiership, as the transition
period of membership drew to a elose, the govemment began to complain about the size of Britain's
contribution to the EC budget, even though this
had been one of the issues that had been renegotiated in 1974--1975.
Callaghan's successor, Margaret Thatcher,
made the budget contributions the central issue of
her relations with the EC from the time of her
election in May 1979 until she managed to obtain
a permanent annual rebate for the UK at the
Fontainebleau meeting of the European Council
on June 25 and 26, 1984. During that time she
adopted an aggressive and confrontational tone
with her EC partners and did not hesitate to block
progress on other items of business in order to
press her case for a rebate.
Once the budgetary issue was settled, the
British govemment became more cooperative, particularly over the agreement on the single market, a
project that was ideologically compatible with the
Conservative govemment's free-market approach
to economic affairs. However, Thatcher set herse1f
at odds with most of the other member states by her
rejection of the need for a social dimension to the
single market. This she expressed most forcibly in
her infamous Bruges speech in September 1988.

Thatcher also rejected the argument that in

order to complete the single market it was necessary to move to a single currency. On this issue,
such was her strength of personal feeling that she
made statements that were more rejectionist than
was the official position of the government, and
this led to the resignation of her deputy prime
minister, Sir Geoffrey Howe. His resignation
speech constituted ablistering attack on the prime
minister's approach to the EC, which he argued
was damaging the economic interests of British
business. Wounded by this attack, Thatcher failed
to win reelection to the leadership of the Conservative Party on the first ballot and resigned in November 1990 to elear the way for her chosen successor, John Major.
Although Major deelared at the start of his
premiership that he intended to put Britain "at the
very heart of Europe" (Major, 1991), he soon
found himself operating with a small majority in
Parliament and facing constant pressure from a
significant minority of his own members of Parliament who supported the positions taken up by his
predecessor. The most fundamental of these was a
rejection of federalism, which in the UK was defined as further loss of sovereignty by the member
states and further centralization of decisionmaking in Brussels.
Discontent in the Conservative Party soon
came to center on the Treaty on European Union
(TEU), negotiated in 1991 and implemented on
November 1,1993. The govemment argued that the
treaty should be seen as a success for British diplomacy, and certainly a case can be made out for this
interpretation. The more far reaching federalist proposals were not accepted at the Maastricht summit
on December 9 and 10, 1991, where the negotiations were concluded. The three-pillars structure of
the TEU, with the Common Foreign and Security
Policy (Pillar Two) and Cooperation on Justice and
Horne Affairs (Pillar Three) forrning intergovemmental pillars separate from the EC (Pillar One),
fitted with the general British view. In addition,
Major negotiated opt outs for the UK from the social chapter of the treaty and from the provisions on
automatic movement to a single currency.
However, this interpretation convinced neither the newly ennobled Lady Thatcher, who described the TEU as "a treaty too far," nor her supporters in the parliamentary Conservative Party,
and in the face of a constant barrage of criticism
the govemment became increasingly negative in

United Kingdom
its statements about the EU. It is important to recognize, however, that the position of the Conservative government on the social dimension was
based on its econornic analysis ofwhat was necessary for a competitive economy, that refusal to
comrnit itself to a single currency reflected the indecision of British industry and the City of London on the matter, and that the advocacy of a "Europe of nation-states" as against any more
federalism was a long-standing position. In other
words, it is possible to overstate the extent to
which policy was driven by short-term domestic
political considerations. For that reason also, despite the new Labour government's opt in to the
Social Charter, Britain under Tony Blair may not
adopt a radically new approach toward the EU.
Political and Constitutional
Effects of Membership
Membership in the EU fundamentally transformed British party politics. As described above,
the Labour Party almost broke apart over the issue
in the 1970s, and a group of leading pro-Europeans in the party, led by former Commission
president Roy Jenkins, did break away to form the
Social Democrat Party (SDP) in 1980. The split
allowed the anti-EC faction to gain the ascendancy, and the 1983 election manifesto comrnitted
Labour to withdraw Britain from membership of
the EC. However, this was seen as one element in
the convincing defeat of the party in the election,
and led to a reassessment after Neil Kinnock became leader.
That process was helped by Thatcher's rejection of a social dimension to the single market.
The fact that Comrnission president Jacques Delors and a majority of the leaders of other member
states argued strongly for a social dimension convinced many Labour supporters that the EC was
on their side after all. Research showed widespread support among Labour Party members for
the EC (Seyd and Whiteley, 1992).
After his narrow election defeat by Major in
1992, Kinnock resigned as leader of the Labour
Party and in January 1995 became one of Britain's
two commissioners. His successor, John Smith,
died suddenly in June 1994 and was succeeded by
Tony Blair, who exploited the growing divisions
within the Conservative Party over Europe by presenting his party as the more European while at
the same time maintaining an equivocal stance toward EMU.

473

However, though dissent in the parliamentary

Labour Party--desperate to return to office-was
subdued, and despite support for the EC in the
party membership, research among Labour backbench members of Parliament in 1995 showed a
higher level of skepticism about further European
integration than the leadership would like to adrnit
(Baker et al., 1996). This further suggests that the
Labour government, which came to office in May
1997, might be more guarded in its enthusiasm for
the EU than some of Britain's European partners
mighthope.
The effect of membership on the Conservative Party was potentially even more devastating.
Traditionally the party of nationalism, under Edward Heath the Conservative Party declared itself
the party of Europe. But Thatcher stressed the nationalist aspect of the party's identity, and doing
so involved her in repeated attacks on the loss of
sovereignty involved in membership of the EC.
Although John Major tried to moderate the tone,
he found hirnself under tremendous press ure to resist further European integration from a parliamentary party in which the position of his predecessor had a large measure of support (Ludiam,
1996). What made this element more troublesome
for Major was the support that it could attract
among Conservative Party members in the country
(Whiteley, Seyd, and Richardson, 1994) and
among the traditionally pro-Conservative Party
sections of the press.
One reason why membership was so controversial in the UK was that the constitutional effects of membership were more far reaching than
for most member states. The British constitutional
doctrine of the sovereignty of parliament was superseded by a European constitutional doctrine
that EC law took precedence over national law
wherever they came into conflict (Steiner, 1992).
For a country that prided itself on its unbroken
history of constitutional evolution, this implication was difficult to accept.
Economic Effects
Membership in the EU led to a reorientation of the
pattern of British trade. Whereas in 1958 Britain's
trade with the other eleven states that in 1994
formed the EU accounted for 22 percent of total
UK trade, by 1994 this had reached 53 percent
(Northcott, 1995, p. 199). However, within this
overall pattern, the UK ran a substantial trade
deficit with the rest ofthe EU. This fact was some-

474

United Nations (UN)

times used to argue that the trade effects of membership had been negative. However, it is more
plausible to argue that the deficit was the consequence of British industry's failing to take advantage of the opportunities offered by membership
of the common market. There was a considerable
inflow of foreign investment to the UK after membership, which was an important source of employment and which would almost certainly not
have occurred had the UK been outside of the EU.
Also, the financial services sector flourished in a
way that might not have been possible outside of
the EU, and it stood to benefit further from the liberalization of financial services under the single
market pro gram (Bulmer, George, and Scott,
1992, pp. 252-253).
Conclusion
The UK has not adapted easily to EU membership. The effects of membership on the political
system were extremely disruptive; and the same
can be said for the effects of domestic politics on
the attitude of successive British governments to
the EU. However, the degree of economic integration of the UK into the EU was such by the late
1990s that only at the political extremes were
there still advocates of disengagement.
See also TABLE 6; TABLE 10; APPENDIX 2; APPENDIX 3.
Bibliography
Baker, D., A. Gamble, S. Ludiam, and D. Seawright.
1996. "A 'Rosy' Map of Europe? Labor Parliamentarians and European Integration: Initial Survey Results." Paper presented at the annual conference of
the Political Studies Association (UK).
Bulmer, S., S. George, and A. Scott, eds. 1992. The
United Kingdom and EC Membership Evaluated.
London: Pinter.
George, S. 1994. An Awkward Partner: Britain in the
European Community. 2d ed. Oxford: Oxford University Press.
Ludiam, S. 1996. "Backbench Rebellions. Europe: The
Specter Haunting Conservatism." In S. Ludlam and
M. J. Smith, eds., Contemporary British Conservatism, pp. 98-120. Basingstoke: Macmillan.
Major, J. 1991. "The Evolution of Europe." Conservative Party News (March 11), p. 13.
Northcott, J. 1995. The Future of Britain and Europe.
London: Policy Studies Institute.
Seyd, P., and P. Whiteley. 1992. Labor's Grass Roots:
The Politics of Party Membership. Oxford: Clarendon Press.
Steiner, J. 1992. "Legal System." In S. Bulmer, S.
George, and A. Scott, eds., The United Kingdom and

EC Membership Evaluated, pp. 124-137. London:

Pinter.
Whiteley, P., P. Seyd, and J. Richardson. 1994. True
Blues: The Politics of Conservative Party Membership. Oxford: Oxford University Press.

-Stephen George

Unlted Nations (UN)

The EU is not a member of the United Nations
(UN), but member states try to coordinate their positions in the UN General Assembly (where the
Council presidency speaks on behalf of the EU)
and on the UN Security Council, of which Britain
and France are permanent members and Germany
may become a permanent member (although without the right to veto). Many of the EU's common
positions and joint actions in the Common Foreign
and Security Policy are formulated on the basis of
UN Security Council resolutions. EU development
policy is also formulated and implemented in elose
association with UN specialized agencies and programs, notably the UN Food and Agriculture Organization (of which the EU has been a member
since 1991), the UN Conference on Trade and Development, the UN Industrial Development Organization, and the World Food Program. In addition,
the member states coordinate their positions in the
UN Economic Commission for Europe.
See also COMMON FOREIGN AND SECURITY
POLICY; APPENDIX 3.

U.S.-EU Relations: The Polltlcs

of Partnership
The United States has been both crucial in the
broadest sense to the evolution of European integration and a major factor in its specific development. In the early days of the European Coal and
Steel Community, the support of the Americans
and the relationship between the stabilization of
Western Europe and the onset of the Cold War
gave the European project a distinct flavor. The
Treaty of Rome, although it gave no formal role to
Washington in the establishment of the European
Economic Community (EEC), was profoundly influenced by the leadership of the United States,
both of the postwar Western economy and of the
Cold War alliances. At each succeeding stage of
European evolution, this combination of U.S. economic leadership and of the structures of the Cold

V.S.-EU Relations: The Polities of Partnership

War has been feIt. But it has been feIt in changing
ways, as the role of the Vnited States in the global
political economy has altered and as the relationship between the Americans and achanging Europe has been transformed.
A central theme in the "politics of partnership" is thus the ways in which the changing V.S.
position and that of the developing EV have intersected, creating political opportunities and political costs, and arguably leading in the 1990s to a
new form of partnership that encapsulates aseries
of transformations (Featherstone and Ginsberg,
1996; Peterson, 1996; Smith and Woo1cock,
1993). Alongside this process of change, however,
has gone a great deal of continuity in a number of
areas: the impact of V.S. domestic concerns, the
implications of V.S. leaders hip and its expressions, and the effects of the broader political and
econornic structures of the Western and the global
systems. For the purposes of this entry, the changing relationship is dealt with in four major phases:
the formative pre-1970 period, the transition years
1970--1990, the transformations of 1990--1995,
and the "new partnership" of the late 1990s. The
aim is to identify both the central components of
change and the elements of continuity in the relationship.

To the 1970s
Initial V.S. support for European integration arose
from a number of roots. Crucial to it in general
was the identification of the European integration
process with the stabilization and the defense of
the West. The MarshaIl Plan and NATO were in
this sense the two halves of a more or less
well-formulated strategy that aimed at the political
and economic reconstruction of the West European econornies and their security against the Soviet threat. Although there was an early intention
to withdraw V.S. forces from Europe, later reversed in the face of the evident inability of the
West Europeans to defend themselves, it was
never the case that an econornic withdrawal could
either have been contemplated or achieved. The
V.S. stake in Western Europe and in the recovery
of its econornies was central to the ways in which
successive adrninistrations maintained their comrnitment to the integration process. It also meant
that there was a "private" corporate comrnitment
as weIl as an explicit govemmental comrnitment
to the process. Not only this, but the establishment
of the EC in the late 1950s meshed (sometimes a

475

little awkwardly) with the consolidation of the

Bretton Woods system and with the continuing desire to share the burdens of international econornic
as weIl as politicalleadership (Srnith, 1994).
It was hoped, not least by the Kennedy administration, that the EC would form the European end of a new Atlantic partnership. But when
the president pronounced this in his so-called declaration of interdependence (July 1962), the European response was less than dear. Through the
1960s, the attempt to build a new Atlantic community came up against two crucial forces of resistance: first, the desire of France in particular to
emphasize the role of the EC as a base for a separate European identity; second, the shift in international econornic power that saw the EC increasingly operating as a riyal, or at the very least an
awkward partner, for the Vnited States. As a result, by the end of the 1960s there was increasing
potential for tension and even open conflict within
the Atlantic partnership (CaIleo and Rowland,
1973; Cal1eo, 1970).

Partnership and Rivalry, 1970-1990

It was during the 1970s that the twin forces of political change and econornic friction came to dorninate the V.S.-EC relationship. Although at the
level of business and investment there was a continuing growth of interdependence and interpenetration, at the level of political alignments and econornic structures there was a growing set of
tensions. The most explicit political and econornic
challenges combined tests of V.S. leadership and
European resolve. In the political sphere, the
endgame in Vietnam and the escalation of tensions
in the Middle East created European suspicions of
the nature of V.S. leadership while also convincing
at least some Americans that the Europeans could
never effectively provide support for the security
of the West. Thus, Vietnam fostered the fear that
V.S. leadership could not be relied upon, combining interventionism with an eventual and costly retreat. The situation in the Midd1e East, and particularly the October 1973 war, created the further
suspicion that V.S. priorities could destabilize areas much doser to horne for many Europeans. In
both cases, Washington came to the condusion
that the Europeans themselves could not be trusted
to give consistent material support. Although the
development by EC member states in the early
1970s of European Political Cooperation (EPC), a
foreign policy coordinating mechanism, was given

476

U.S.-EU Relations: The Polities of Partnership

eonsiderable signifieanee by Europeans themselves, it eould easily be seen by Washington as a

cover for European inaetion and special pleading
(Chaee and Ravenal, 1976; Kolodziej, 1981).
This impression was given mueh greater
force in Washington by the onset of the "new Cold
War" in the late 1970s and early 1980s. The foeus
of renewed U.S.-Soviet tension on erises outside
Europe and on the deployment of new nuc1ear
missiles in Europe itse1f ereated a potent mix of
pressures. The EC was ill equipped to deal with
these: several of its member states were reluetant
to jeopardize eeonomie interests by taking sides in
regional eonfliets, and others were distinetly uneasy about the ways in whieh the deployment of
intermediate-range nuc1ear forees on their soil
was taken as a test of their loyalty to the Reagan
administration. The results of these tensions were
ambiguous: on the one hand, member states eontinued to develop their diplomatie eooperation
through EPC and through a revived foeus on the
Western European Union (WEU) in the
mid-1980s; on the other hand, they were divided
and pressured by U.S. policies airned at influeneing the broader shape of Europe. By the time the
"great transformation" of 1989 and after arrived,
there was thus still no definitive resolution of the
transatlantie tensions (Smith, 1984; Calleo, 1987;
Alting von Geusau, 1983; Freedman, 1983).
These tensions, though, were not purely politieal. The Vietnam War and the Middle East eonfliet, followed by the "new Cold War," were eeonomie as weIl as seeurity or diplomatie events,
and they played a major role in preeipitating the
eollapse and the reshaping of the international
eeonomie order. Although it eould be argued that
the eentral politieal transformation oeeurred after
the mid-1980s, the major eeonomie restrueturing
began with the loss of U.S. eeonomie eonfidenee
during the 1960s and the eventual "Nixon shoek"
of August 1971. The effeetive devaluation of the
dollar and the eollapse of the system of fixed exchange rates led to aperiod of inereasing eeonomie frietion in whieh the waning leadership of
the Amerieans eame up against the challenge of
both the EC and Japan. As a result, in the United
States there was a resurgenee of demands for proteetion, both of deelining industries and of new
teehnologies. In the EC, there was aseries of often
defensive moves to ereate buffers against an unstable dollar and the U.S. role as a "predatory
hegemon." This meant that the early 1980s were

more than aperiod of esealating diplomatie tensions: the emergenee in the EC of the single market program and the European Monetary System
were ways of expressing a new European eeonomie identity. The interplay of this eeonomie restrueturing with the politieal and seeurity tensions
already mentioned formed the leitmotiv of the
mid-1980s and laid the basis for a substantial
transformation of relations in the early 1990s
(Calleo, 1987; Smith, 1992).
The 7990s: A Great Transformation?
Just as the Cold War and the "new Cold War" had
been both politiealJseeurity and eeonomie events
in transatlantic relations, so was the proeess of
transformation that was foeused dramatieally by
the removal of the Berlin Wall and the eollapse
both of the Soviet bl oe and of the USSR itself.
The initial emphasis was naturallyon the ways in
whieh the politieal reordering of Europe ereated
both challenges and opportunities for the United
States and the Ee. For the Amerieans, the effeetive disappearanee of the eentral adversary ereated
a paradox: there was pressure to dismantle the
Cold War at horne and abroad, but this did not
mean an easy retreat into domestie preoeeupations
and the enjoyment of a "peace dividend." Instead,
it appeared to ereate new risks and dangers arising
from the status of the United States as the only superpower. The logical response was to seareh for
new struetures in whieh the responsibility for
world order might be shared and in whieh the seeurity of Europe in partieular eould be safeguarded to a greater extent by European efforts.
This was a hope that had run through mueh of the
Cold War period, but now it appeared c10ser to realization. The EC had, after all, spent a good deal
of time and effort attempting to establish its own
diplomatie identity, and now the opportunity existed for a new sharing of responsibility. Such was
the thrust of many speeches by U.S. polieymakers,
partieularly President George Bush and Seeretary
of State James Baker, in the immediate aftermath
of the liberation of Central and Eastern Europe
(Smith, 1992; Smith and Woolcoek, 1993).
The EC's response was less than dear or eoordinated. Despite the aim of ereating new levels
of politieal union and the eore of a Common Foreign and Seeurity Poliey, the EC and its member
states were found wanting in the face of post-Cold
War erises. The Gulf erisis and war of 1990-1991
ereated splits within the Community and exposed

U.S.-EU Relations: The Polities of Partnership

the inability of several members to take up a more

interventionist line. More telling still was the inability of the EC to deal effectively with the onset
and escalation of the conflict in former Yugoslavia
during 1991 and 1992. Initial declarations that this
was the "hour of Europe" rang hollow in light of
disunity over the recognition of former Yugoslav
republics and the inability to mount an effective
diplomatic effort. Criticism of these shortcomings
has to allow for the fact that any diplomatic effort
in former Yugoslavia would have been difficult to
sustain and for the EC's success in producing successive peace plans, many of which later found expression in the November 1995 Dayton Accords.
But the fact remains that from a U.S. point of view
the Europeans were unable to apply the necessary
military muscle to focus the parties' minds on negotiation as opposed to the use of force (Smith and
Woo1cock, 1993).
The big security issues may have found the
EC wanting, but this conceals a significant set of
developments in U.S.-EC and then U.S.-EU relations during the early 1990s. In November 1990,
the EC and the United States agreed to the Transatlantic Declaration (TAD), which set out aseries of
principles and frameworks for the evolution of the
relationship. This led in the following five years to
a major expansion of what might be termed the
"infrastructure" of U.S.-EU relations, with networks and working groups emerging in a range of
both political and economic arenas. Everything
from competition policy and technical standards to
regional conflicts and environmental initiatives became the target of this extended diplomacy, and the
Clinton administration from 1993 on gave consistent support to the emergence of an expanded and
institutionalized transatlantic relationship. The EU
was also able to establish a significant role in what
might be termed the "civilian" aspects of developments in Central and Eastern Europe: the coordination through the so-called G24 of technical and
economic assistance and the broader encouragement of stable government and economic practices. The EU could offer what the United States in
many ways could not: the irnmediacy of economic
aid and the carrot for some of eventual membership (Peterson, 1996; Smith and Woo1cock, 1993).
At the same time as the United States and the
EU were feeling their way into a new relationship
in respect to security and diplomacy in Europe,
the economic relationship was both intensifying
and experiencing elements of transformation. The

477

process of continuous negotiation in the context of

the GATT and then the World Trade Organization
(WTO), as weIl as on a bilateral basis, meant that
the economic relationship was becoming more effectively institutionalized. This did not mean there
were fewer disputes-the early 1990s saw intense
frictions over such areas as public procurement,
air transport, and telecommunications-but it did
mean that in an increasing range of issues there
were growing levels of communication and trust
in the procedures. This was true not only at the
governmental or U.S.-EU level but also at the private level, with the increasing interpenetration and
mutual engagement of U.S. and European business. The single market program in this way provided a considerable focus for new patterns of interaction between the "public" and the "private"
faces of U.S.-EU relations, with the emphasis on
problem solving and management as much as on
confrontation (Smith and Woo1cock, 1994).
Toward a New Partnership?
By the mid-1990s, it could thus be argued that the
ingredients for a new U.S.-EU partnership were in
place. Although there were frictions, suspicions,
and disappointrnents in the field of diplomacy and
security, the emerging relationship between the
United States and the EU in the context of a reformed NATO, the WEU, and the Organization for
Security and Cooperation in Europe (OSCE) was
one in which a "multi-institutional" partnership
could in principle be managed. The division of labor between institutions, for example in the context of the Dayton Accords for former Yugoslavia,
might cause tensions but was comprehensible and
increasingly institutionalized. In the economic
sphere, the increasing range of networks, working
groups, and institutions both at the transatlantic
and at the global levels could be seen as the basis
for a new transatlantic marketplace, in which the
United States and the EU encountered each other
both in the governmental and in the private arena.
This did not mean that all problems could be eliminated: the intense interdependence and interpenetration of the United States and the EU meant that
there would always be frictions and disputes.
Wh at it did mean was that increasingly these
problems were handled in the context of relatively
settled rules and expectations.
The most explicit formal manifestation of
these developments came in 1995, with the negotiation of the New Transatlantic Agenda and the

478

U.S.-EU Relations: Trade and Investment

Transatlantic Action Plan between the United

States and the EU. These documents, signed in
Madrid on December 3, 1995, contained both a set
of agreed-on principles and common concerns and
a wide-ranging list of joint actions to be taken by
the parties. In many ways, they consolidated and
expanded the relationships established under the
umbrella of the TAD over the previous five years,
but they went far beyond the TAD in terms of the
range of specificity of the commitments undertaken. The program was to be subject to a rolling
process of review and renewal as items came onto
and left the agenda.
The net result of these developments in the
political, economic, and security fields was that by
the late 1990s, a complex and highly institutionalized transatlantic relationship could be discerned.
Some, such as German foreign minister Klaus
Kinkei, were led on this basis to call for the development of a Transatlantic Free Trade Area
(TAFTA), and there was evidence of a good deal
of bottom-up intensification of the re1ationship as
the result of corporate restructuring and alliances.
Disputes, though, persisted, in the context of the
WTO and in the context of the U.S.-EU-Japan triangle as weH as in bilateral relations. The intensity
and dynamism of the U.S.-EU partnership mean
that this will be the trend for the foreseeable future: an increasingly complex and institutionalized
re1ationship in which processes of conflict management and of "competitive cooperation" remain
central, but one in which the political and security
dimensions will link inexorably with the economic interests of the partners.
See also U.S.-EU RELATIONS: 'fRADE AND INVESTMENT.

Bibliography
Alting von Geusau, F., ed. 1983. Allies in a Turbulent
World: Challenges to U.S. and West European Cooperation. Lexington, MA: D.C. Heath.
Calleo, D. 1970. The Atlantic Fantasy. Baltimore: Johns
Hopkins University Press.
---.1987. BeyondAmerican Hegemony: The Future
oJthe Western Alliance. NewYork: Basic Books.
Calleo, D., and B. Rowland. 1973. America and the
World Political Economy. Bloomington: Indiana
University Press.
Chace, J., and E. Ravenal, eds. 1976. Atlantis Lost: The
United States and Europe After the Cold War. New
York: New York University Press.
Featherstone, K., and R. Ginsberg. 1996. The United
States and the European Union in the 1990s: Partners in Transition. London: Macmillan.

Freedman, L., ed. 1983. The Troubled Alliance. London:

Heinemann.
Kolodziej, E. 1981. "Europe: The Partial Partner." International Security 5, no. 3 (Winter 1980-1981).
Peterson, J. 1996. Europe and America in the i990s:
Prospects Jor Partnership. London: Routledge.
Smith, M. 1984. Western Europe and the United States:
The Uncertain Alliance. London: Allen and Unwin.
- - - . 1992. '''The Devil You Know': The United
States and aChanging European Community." International Affairs 67, no. 1 (January).
- - - . 1994. ''The United States and Western Europe:
Empire, Alliance and Interdependence." In A. McGrew and P. Lewis, eds., The United States in the
Twentieth Century: Empire. London: Hodder and
Stoughton.
Smith, M., and S. Woolcock. 1993. The United States
and the European Community in a TransJormed
World. London: Pinter.
- - - . 1994. "Leaming to Cooperate: The Clinton Administration and the European Union." international
Affairs 69, no. 3 (July).

-Michael Smith

U.S.-EU Relations:
Trade and Investment
The United States and the EU have long been each
other's largest trading partner and the world's two
largest traders. Their trade relationship has provided leadership to the rest of the world; multilateral trade agreements have never been concluded
in practice without a prior bilateral deal between
the United States and the EU. The most striking
characteristic of the U.S.-EU trade relationship is
the equality that both partners have enjoyed from
the start. Unlike the situation in the foreign policy
realrn, in which the EU has never had an effective
international personality, the EU has seized an
equal voice in trade negotiations with the United
States since the beginning of the Kennedy Round
(1964-1967) of the GATI. As a result, many disputes have mired the U.S.-EU trade relationship,
especially agricultural trade conflicts. Quiet years
in the bilateral relationship and the conclusion of
the New Transatlantic Agenda in 1995 foHowed
the peak of U.S.-EU trade frictions during the
Uruguay Round (1986-1993) of the GATT, but
disputes resurged in the late 1990s.

A Crucial Relationship
Together the United States and the EU account for
30 percent of world trade and 60 percent of the
world's GDP. They were each other's largest trad-

U.S.-EU Relations: Trode and Investment

ing partner until 1994, when Canada becarne the

top importer and exporter for the United States.
The EU and the United States also are each other's
1argest foreign direct investment partners.
In 1996 trade flows between the EU and the
United States were at arecord $270 billion, with
EU exports to the United States of $142.7 billion
and U.S. exports to the EU of $127.5 billion. The
United States accounted for 19.6 percent of total
EU trade, and the EU was responsible for 20.4
percent of total U.S. trade. Germany is the EU's
biggest individual exporter to the United States
(28 percent of total), and Britain is the EU's
biggest importer of U.S. goods (23 percent of total). Over 80 percent of U.S. exports to the EU are
manufactured goods, mainly aircraft, machinery,
and motor vehicles; the remainder consists of
agricultural products, fuel, and raw materials. The
leading EU exports to the United States are also
primarily machinery, motor vehicles, and other
manufactured products.
The U.S.-EU trade relationship is fairly balanced. The Uni ted States has traditionally ron a
modest trade surplus with the EU, except in the
period 1984-1989 and since 1993. In 1996 the EU
trade surplus with the United States was $12.2 billion, up from $8 billion in 1995. The United States
still has a sizable surplus with the EU in the area
of services.
Main Sources

of Trade Tensions

The U.S.-EU trade relationship was relatively cordial until the early 1980s, except for the so-called
chicken war in 1963 and a few skirrnishes over tax
legislation in the 1970s. Security imperatives
tamed U.S. complaints about the discriminatory
practices associated with the formation of the
Common Market, at a time when the EC was
building its trade negotiating strength in GATT.
Transatlantic trade conflicts sharp1y increased in
the ear1y 1980s, however, as the United States
moved away from liberal trading practices in response to its declining place in the world economy.
The foremost source of U.S.-EU trade frictions from the U.S. point of view has been the European practice of subsidizing production and exports, which has led to full-fledged bilateral
conflicts in agriculture, steel, and civil aircraft.
The Uni ted States has also often denounced the
EU nontariff barriers to trade that have harnpered
U.S. exports in sectors such as building, telecom-

479

munications, and broadcasting. The successive enlargements of the EU to new members have also
triggered U.S.-EU trade disputes, such as the conflict over feed grains after the Spanish and Portuguese accession in 1986. For the 1995 en1argement of the EU (when Austria, Finland, and
Swedenjoined), the United States demanded compensation in advance, since tariffs were expected
to increase on over $4 billion in trade with these
countries. Finally, the tariff preferences granted by
the EU to the African, Caribbean, and Pacific
(ACP) countries have also created trade frictions
with the United States, as in the still unresolved
and increasingly bitter dispute about bananas.
Until the 1980s the United States was always
the plaintiff in bilateral trade disputes, whereas the
EC fought to preserve the status quo. As the U.S.
government engaged in a more aggressive trade
policy based on unilateral retaliation, the EU
launched complaints of its own against U.S. trade
practices. The main source of U.S.-EU trade disputes from the European point of view has been
the U.S. efforts to open foreign markets through
unilateral measures, such as Section 301 of the
1974 U.S. Trade Act and the Super 301 provision
of the 1988 Omnibus Trade Act, which allow the
United States to impose unilateral punitive sanctions or retaliation on goods from another country
without prior consultation of GATI. The EU has
often countered U.S. attacks against its trade policy by in turn denouncing protectionist U.S. practices, such as the "Buy American" legislation in
the case of the govemment procurement dispute
and military research support in the case of the
civil aircraft conflict.
Negotiation, litigation, and retaliation are the
main dispute settlement procedures, but they can
be long and costly. When bilateral negotiations
failed, the United States and the EU could file a
lawsuit in the GATI; now they can use the dispute
resolution mechanism of the World Trade Organization (WTO). For two decades the United States
was the main user of GATI litigation, but in the
early 1980s the EC retaliated by taking legal action in the GATT against discriminatory U.S.
trade practices. Threatened or actual retaliation,
which targeted specific products and countries of
an arnount equivalent to the estimated trade loss as
a result of the practice under attack, were also
used extensively either before litigation or when
one party (most often the EC) refused to take the
results of GATI legal action into account, such as

480

U.S.-EU Relations: Trade and Investment

in the oilseeds case. Some disputes have gone on

for many years, such as the hormones case that
lingered for almost a decade until finally being resolved in July 1996. These U.S.-EU disputes are
costly because they damage the elimate of the relationship, they can have consequences on products that were not involved in the original dispute,
and they often prevent liberalization to the rest of
the world.
Predominance of Agricultural Trade Conflicts
Trade disputes between the United States and the
EU have always been particularly hostile in the
field of agriculture. Indeed, despite the overwhelming place of manufactured goods in
U.S.-EU trade, the bulk of transatlantic trade conflicts since 1963 has involved agriculture. In most
cases the Common Agricultural Policy (CAP) was
the target of the complaint. This imbalance between the intensity of the conflicts and the real
importance of the trade can be explained both by
the high political priority traditionally assigned to
farmers in Europe and the United States and by
the blatant agricultural trade distortions produced
by the CAP, whose elaborate scheme of variable
levies for import protection and export subsidies
artificially inflated European agricultural production and increased competition for U.S. products
not only in the European market but also in third
countries.
The so-called chicken war was the first trade
dispute between the United States and the EC. It
arose in 1963 because implementation ofthe CAP
had drastically increased tariffs on poultry in Germany, the biggest poultry market for the United
States. The United States refused to accept the
concessions offered by the EC and instead retaliated by withdrawing some of its own concessions,
which the Community contested. A GATT panel
determined that the United States could withdraw
concessions in the amount of $26 million, which it
did, but apparently to no effect, as the EC continued to implement a highly protectionist CAP.
The Kennedy Round of the GATT generated
the second transatlantic trade dispute. A central
U.S. goal in the multilateral negotiation was to get
fair access for U.S. agricultural exports in Europe,
which at the time represented 40 percent of U.S.
exports to the EC. In a fierce battle sustained in
part by French president Charles de Gaulle's
"empty chair" policy, the EC revealed its tough
bargaining capabilities by resisting U.S. attempts

to cancel the EC variable levy system and obtain a

reduction in agricultural trade barriers to preintegration levels (Preeg, 1970). The United States
sought again to limit an ever-expanding CAP in
the Tokyo Round (1975-1979) but once more
failed to reduce the EC's variable levies and export subsidies.
The U.S.-EU trade relationship in agriculture
deteriorated severely in the 1980s as a consequence
of a worldwide agricultural recession. The CAP
had turned the EC into a net exporter, which
dumped its surpluses on world markets through the
use of export restitutions, sending world prices
down and reducing U.S. export shares. The bilateral
conflict escalated in 1985 when the United States
retaliated against the CAP by implementing its own
farm support measures through the Export Enhancement Program. This U.S.-EU "subsidy war"
proved extremely costly, however. In 1986, U.S.
and EC domestic agricultural support programs
were estimated to cost about $25 billion each.
The Uruguay Round opened in 1986 after
long, conflictual prenegotiations over whether to
inelude agricultural liberalization on the agenda.
The United States went on the offensive in 1987
by calling for a complete elimination of all subsidies in agriculture by the year 2000. The EC, by
contrast, tried to defend the fundamental principIes of the CAP. The wide gap separating the U.S.
and EC positions on agriculture led to a long stalemate in the multilateral negotiations and almost
resulted in the failure of the Uruguay Round altogether at the Brussels ministerial meeting of December 1990, originally intended to elose the
round.
Negotiations between the United States and
the EC accelerated after the formal adoption by
the EC of the internal CAP reform in May 1992
but again broke down until the United States decided to superimpose the dispute over oilseeds, in
which two GATT panels had ruled against the EC.
It was in the context of intense bilateral hostility,
with a massive U.S. trade retaliation pending, that
the so-called Blair House agreement was signed
by the United States and EC on November 20,
1992, finally enabling multilateral negotiations to
resume in other sectors. The agreement provided
for a 20 percent reduction in interna! price support
over six years, areduction of export subsidies by
21 percent in volume and 36 percent in budget
over six years, and a "peace cIause." Aseparate
deal on oilseeds was also coneluded. After months

U.S.-EU Relations: Trade and Investment

of virulent opposition from the French govemment, on the grounds that EC negotiators had exceeded their mandate in concluding the Blair
House agreement, the United States and the EU
eventually renegotiated specific elements of the
deal in December 1993. The EU improved its offer on several important points, such as an extension of the peace clause, a longer timetable for
cutting subsidized farm exports, and changes in
the reference period used for the cuts.
U.S.-EU tension over farm policy has lessened considerably since the conclusion of the
Uruguay Round and the CAP reform, which reduced the amount of farm surplus the EU exports
onto the world market. However, new disputes are
arising over regulatory issues such as slow EU approval of genetically modified varieties of grains.
Other Subjects of V.S.-EU Trade Frictions

The U.S .-EU trade relationship has been more

arnicable in other sectors, though not totally free
from sometimes intense friction, such as during
the steel crisis in the early 1980s or the dispute
over reciprocity in banking in 1988 and 1989. Although the United States and the EU joined forces
against third countries to promote trade liberalization in many industrial and "new" sectors, several
disputes were also addressed during the Uruguay
Round.
Civil aircraft. The success of the European
Airbus consortium, fueled since its creation in
1967 by massive support from its partner govemments, provoked a major U.S.-EU trade dispute in
the mid-1980s. After years of mutual accusations,
negotiations, and litigation, the United States and
the EU finally concluded a bilateral agreement on
civil aircraft in July 1992 that prohibits production
subsidies, caps direct govemment support for development of a new aircraft, and increases transparency of govemment activity in civil aircraft.
Public procurement. A bilateral dispute on
public procurement started in 1990 after the EU
adopted the so-called Utilities Directive, which
gave a 3 percent price preference to European bidders. The U.S. govemment demanded that U.S.
companies be exempted from the preference, but
EU negotiators used it as a bargaining chip in order to obtain changes in the even more discriminatory U.S. procurement policy. During the signing
of the Uruguay Round in April 1994, the United
States and the EU finally concluded difficult negotiations with a partial agreement on procurement

481

(excluding telecommunications) that covers construction and services in five key utilities sectors
and applies to central govemments as well as to
regions and in certain cases large cities.
Broadcasting. In 1989 the EU adopted the
Broadcasting Directive, requiring that a majority
of entertainment transmission time be reserved for
prograrns of European origin "where practicable."
The United States placed the EU under Section
301's "priority watch list" because of the resulting
barriers to entry for U.S. television programs. After a much publicized U.S.-EU conflict in the last
months of the Uruguay Round, the broadcasting
dispute was left unresolved.
A New Transatlantic Partnership?
The signing of the Uruguay Round Final Act in
Marrakech on April 14, 1994, dampened trade
frictions between the United States and the EU.
Yet still unsettled are the issues of telecommunications, procurement, broadcasting, and a new
dispute on the EU import regime for bananas from
non-ACP countries, which has involved GATT litigation and Section 301 procedures. Nevertheless,
the bilateral environment seemed far better in
1996, following conclusion of the New Transatlantic Agenda on December 3, 1995, with its joint
action plan, and talk of a Transatlantic Free Trade
Area merging the world's two largest regional
trade pacts. The Commission prepared a "Blueprint for deeper transatlantic ties," and corporate
representatives from the United States and the EU
came together to launch the Transatlantic Business Dialogue.
Despite this strengthened bilateral cooperati on emphasizing shared economic goals, trade
frictions between the United States and the EU
again increased in 1996 and 1997. Particularl y
salient was the dispute about the extraterritorial
provisions of U.S. legislation. Recent U.S. laws,
notably the Libertad (Helms-Burton) Act and the
Iran-Libya Sanctions Act, penalize foreign companies doing business with countries considered
as sponsors of terrorism (Cuba, Iran, and Libya).
Although the EU made clear that it supports the
goal of fighting terrorism, it renewed its criticisms
that the United States was resorting to unilateral
actions to resolve foreign policy disputes and that
national security was being used as a disguised
form of protectionism. A WTO panel was formed
in early 1997 to exarnine the legality of the V .S.
action, but the Vnited States announced its deci-

482

U.S.-EU Relations: Trade and Investment

sion to boycott the panel proceedings on the

grounds of national security. Although the EU had
agreed that an arnicable settlement of the dispute
was preferable to WTO sanctions, it passed the retaliatory "antiblocking" legislation that forces EU
companies to disobey U.S. legislation and inform
the Commission if they lose business because of
the U.S.-imposed sanctions.
As in the beginning of their trade relationship,
the U.S. and the EU are still on an equal footing
when it comes to trade disputes and negotiations.
However, as the balance between trade and security interests shifts, and both the United States and
the EU increase their trade ties with other regions
of the world, the transatlantic trade relationship is
bound to evolve, possibly moving away from center stage but being even more acrimonious.

See also GENERAL AGREEMENT ON TARlFFS AND

U.S.EU RELATIONS: TIm POLmcs OF PARINERSHIP.
TRAnE; 'fRANSATLANTIC BUSINESS DIALOGUE;

Bibliography
Baldwin, Robert E., Carl B. Hamilton, and Andre Sapir,
eds. 1988. Issues in U.S.-EC Trade Relations.
Chicago: University of Chicago Press.
Comrnission. 1997. Annual Report on United States
Barriers to Trade and Investment. Luxembourg: Office for Official Publications of the European Communities.
Preeg, Ernest H. 1970. Traders and Diplomats: An
Analysis 01 the Kennedy Round 01 Negotiations Under the General Agreement on Tariffs and Trade.
Washington, DC: Brookings.

-Sophie Meunier

Variable Geometry

v
Val Duchesse Process
The so-called Val Duchesse process began in 1985
when the Commission convened a meeting at the
chateau Val Duchesse, on the outskirts of Brusse1s.
The meeting brought together the social partnersthe Union ofIndustrial and Employers' Confederations of Europe (UNICE), the European Trade
Union Confederation (ETUC), and the European
Center of Public Enterprises-to encourage them
to launch a "social dialogue" and thereby participate in EC social policy formulation. Thanks
largely to social policy provisions of the Single European Act and the Treaty on European Union, the
intensity of the social dialogue has greatly increased, as have the composition and the subject
matter of working parties, consisting of Commission, employer, and employee representatives, set
up as part of the Val Duchesse process.
See also SOCIAL POLICY.

Value-Added Tax (VAT)

The EC chose value-added tax (VAT) as the
model tumover tax for the common market because it does not artificially distort industrial
structures and facilitates the detection and prevention of illicit export subsidies. Cross-border
shopping gave rise to distortions, but ended when
VAT rates were harmonized as part of the single
market program. VAT is one of the EU's own resources, that is, a small percentage (reducing
from 1.4 to 1 percent in 1999) of VAT receipts
goes directly to the EU's coffers (although the
EU's percentage is not identified in the tax paid
by consumers).
See also BUDGET.

See DIFFERENTIATED INTEGRATION.

VAT
See VALUE-ADDED TAX.

Vedel Report
Following the Hague summit on December 1 and
2, 1969, the Commission asked Georges Vedel, a
French expert, to chair a committee and draft a report on the role of the European Parliament (EP)
in achanging EC. The ensuing Report 0/ the
Working Party Examining the Problem 0/ the Enlargement 0/ the Powers 0/ the European Parliament (the Vedel Report) recommended considerably more legislative power for the EP, greater
Commission accountability to Parliament, and
c10ser ties between the EP and national parliaments. Although the Vedel Report was prophetic
in the long term (at least with respect to the EP's
legislative power and scrutiny of the Commission), its recommendations were too radical for
the EC in the early 1970s and were not acted
upon.
See also EUROPEAN PARLIAMENT.

Venlce Declaratlon
The Venice Dec1aration of June 1980 supported
UN Security Council resolutions 242 and 338 on
the Palestinians' right to self-determination and
the right of the Palestine Liberation Organization
(PLO) to be associated in any negotiation to resolve the Middle East conflict. The dec1aration
was a milestone in the development of European
Political Cooperation (the member states' foreign
policy coordination mechanism) and in the history
of EC-Arab and EC-Israeli relations.
See also EUROPEAN POLmCAL COOPERATION;
MIDDLE EAST.

Vlsegrad Group
The Visegrad Group is an informal name for
Poland, Hungary, the Czech Republic, and Slovakia. With the exception of Slovakia, these countries are poised to join NATO and the EU in the
near future.
See also CENTRAL AND EASTERN EUROPEAN
STATES.

483

484

Vredeling Directive

Vredellng Dlrectlve
Popularly known by the name of Henk Vredeling,
the commissioner for social affairs, the infamous
draft Vredeling Directive of 1980 proposed expanding workers' information and consultation rights in
multinational companies. Whereas previous proposals re1ating to information and consultation in
the workplace had largely foHowed current member-state practices, the Vredeling Directive went
weH beyond existing provisions at the national level

by requiring multinationals to give employees details of the company's entire operations, including
those outside the EC. Lingering Eurosclerosis and
resurgent neoliberalism pushed social policy onto
the back bumer in the early 1980s, and the draft directive languished. Indeed, the proposal showed
how politically out of touch the Commission had
become not only on the issue of worker participation but also on social policy in general.
See also SOCIAL POLICY.

divergence made nonsense of the 1980 target date

and consigned the Werner Plan to history. It was
only in the late 1980s that EMU resurfaced, this
time under the radically different circumstances of
the successful single market program and a push
toward political union.

See also

ECONOMIC AND MONETARY UNION:

TOWARD A SINGLE CURRENCY; EUROPEAN MONETARY SYSTEM.

Western European Union (WEU)

Warsaw Pact
The Warsaw Pact was the Cold War alliance of Soviet-bloc countries, named after the Warsaw
Treaty of Friendship, Cooperation, and Mutual
Assistance, signed on May 14, 1955. The organization was dissolved in 1992.

Werner Plan
At their summit on December 1, 1969, as part of
an effort to deepen European integration at a time
of impending enlargement, the EC's heads of state
and government asked Pierre Werner, prime minister of Luxembourg, to prepare areport on Economic and Monetary Union (EMU). In October
1970, Werner presented an ambitious seven-stage
plan to achieve EMU within ten years by means of
institutional reform and eloser political cooperation. The plan glossed over contending French and
German emphases on monetary measures and
economic policy coordination by proposing parallel progress in both spheres. But differences between Paris and Bonn soon emerged over the
plan's scope and the pace at which it should be
implemented. Although a firm supporter of monetary policy coordination, French president
Georges Pompidou was loath to take any measure
likely to advance supranationalism in the Community. German chancellor Willy Brandt and the
other Community leaders, by contrast, saw the
Werner Plan as an ideal opportunity to accelerate
eloser integration. Accordingly, at the Paris summit on October 19 and 20, 1972, the heads of state
and government called for EMU by 1980. Despite
their seeming optimism, the Werner Plan soon became a victim of the selerosis that beset the EC in
the 1970s. High inflation and growing economic

The origins of the Western European Union

(WEU) go back to March 1948 when Britain,
France, and the three Benelux countries signed a
Treaty of Economic, Social, and Cultural Collaboration and Collective Self-Defense in Brussels.
This was the founding document of the Brussels
Treaty Organization, also known as the Western
Union. After the French parliament's rejection of
the proposed European Defense Community
(EDC) in August 1954, the Western Union organization became the new foundation for a framework
of European defense cooperation. In October 1954,
the Brussels treaty was modified and enlarged to
inelude the Federal Republic of Germany (FRG)
and Italy, and the organization was henceforth
known as the Western European Union.
WEU's Artiele V stipulates that all member
states will afford "all the military and other aid and
assistance in their power" in the event of an armed
attack in Europe against one of them. WEU's collective defense commitment is therefore, on paper,
more binding than that of the North Atlantic Treaty
(which, in its Artiele 5 calls for "such action as it
deerns necessary, ineluding the use of armed
force" in the event of an attack). However, as WEU
member states agreed from the outset to work
elosely with NATO and recognized "the undesirability of duplicating the military staffs of NATO"
(Artiele IV), the WEU has not established its own
integrated military command structure and headquarters, and hence its credibility as a collective
defense alliance has remained in doubt.
Until the WEU's reactivation in the 1980s, the
organization had led a dormant existence. During
the Cold War, NATO was the principal framework
used by West Europeans to organize their defense
efforts in elose cooperation with their transatlantic
allies. In 1960, the WEU's social and cultural responsibilities were transferred to the Council of Europe. The WEU-which until 1992 had its head-

485

486

Western European Union (WEU)

quarters in London, before moving it to Brusselswas given the limited task of verifying the nonproduction of certain categories of annaments in West
Germany. During its early phase, the WEU was
useful for promoting the integration of West Germany into the Atlantic Alliance and for restoring
confidence among the West European countries in
the aftermath of World War II; until 1973, when
Britain joined the EC, the WEU was also considered a usefulliaison between Britain and the EC on
matters conceming European integration.
In the 1980s, the development of European
Political Cooperation (the EC member states' foreign policy coordination mechanism) revived the
debate on Europe's security and defense identity
(ESDI). WEU foreign and defense ministers decided during a meeting in Rome in October 1985
to relaunch the WEU, declaring that "better use
should be made of WEU, not only to contribute to
the security of Western Europe, but also to improve the common defense of all countries of the
Atlantic Alliance." Following the Rome Declaration, the WEU Council was also reactivated and
thereafter held two meetings a year at the level of
foreign and defense ministers. This was followed
by the adoption of another declaration, the Platform on European Security Interests, in The
Hague in October 1987. The Hague Platform set
out general guidelines for the WEU's future program of work, basically to give a security dimension to the process of European integration and to
reinforce Europe's influence in the Alliance and in
the conduct of East-West relations.
In the late 1980s, the WEU continued its
modest revival as a relevant forum for European
defense cooperation. Portugal and Spain applied
to join the WEU in 1988, and the WEU's Secretariat-General was enlarged. In 1988, the first joint
military operation coordinated by the WEU (clearing the Gulf waters of mines) took place, and on
the basis of this experience the WEU became
more prominently involved in coordinating the operations of its member states during the Gulf War
of 1990 and 1991. At that time, the WEU also
played a part in the coordination of military and
logistic support operations in order to afford assistance to the Kurdish populations of Iraq.
If the WEU for decades resembled a "sleeping beauty," it was definitely "kissed awake" in
the early 1990s by two "princes": the EU and
NATO. The Treaty on European Union (TEU),
implemented in 1993, laid the foundation for a

Common Foreign and Security Policy (CFSP),

which also referred to the "eventual frarning of a
common defense policy, which might in time lead
to a common defense" (Article J.4.1). Thus, for
the first time, the WEU became an integral part of
the process of European integration embodied by
the EU. The Hague Platform had already stated
that "the construction of an integrated Europe will
remain incomplete as long as it does not include
security and defense," but until the TEU, security
and defense had been carefully excluded from the
formal mechanisms of European integration.
A declaration on WEU appended to the TEU
specified that "WEU member states agree on the
need to develop a genuine European security and
defense identity. . . . The WEU will be developed
as the defense component of the EC and as a
means to strengthen the European pillar of the Atlantic Alliance." The declaration also called for
the development of the operation al role of the
WEU and invited those EU member states that
had not already done so to accede to the WEU (or
else to become observers).
The WEU responded quite promptly to these
challenges, and in the Petersberg Declaration of
June 1992, WEU member states pledged their
support for conflict prevention and peacekeeping
missions under the aegis of the WEU. The organization's operational role was strengthened by the
creation of a Planning Cell (which, among other
things, prepares contingency plans for the employment of forces under WEU auspices and acts
as ade facto headquarters in an emerging crisis), a
Satellite Center (which has been set up at Torrejon
near Madrid), and an Institute for Security Studies
in Paris.
The WEU's enlargement also took shape
rapidly: Norway, Iceland, and Turkey (as European NATO members but EU nonmembers) became WEU associate members; Austria, Denmark, Ireland, Finland, and Sweden (as EU
members, but-with the exception of DenmarkNATO nonmembers) are now observers; and the
Central and Eastern European states and the three
Baltic states, which have signed Europe Agreements with the EU and therefore have a good
chance of joining the EU in due course, are now
associate partners. Finally, Greece (as an EU
member state and a NATO member) acceded to
the WEU as a full member in 1995.
All these different categories of membership
offer a variety of rights and obligations, but only

Western European Union (WEU)

full members of WEU are covered by the security

guarantee of Article V. The main advantage of the
WEU's enlargement has been that it now brings
together regularIyalI countries involved in the creation of an ESDI; a possible drawback is that it
has become even more difficult than before to
come to quick and deterrnined decisions.
The second "prince" kissing the WEU wide
awake has been achanging NATO. At the NATO
summit of January 1994, the Alliance gave its full
support for the development of an ESDI, with the
EU and WEU as the main tools. NATO proclaimed that the transatlantic link would be reinforced by the strengthening of the European pillar
of the Alliance and that it would enable the European allies to take more responsibility for managing their security and defense. President Clinton
clearly noted that although Europe remains the
core of U.S. security concerns, the "new security
must be found in Europe's integration," with an
important role for both the EU and the WEU.
NATO further endorsed the concept of Combined
Joint Task Forces (CJTF) that would, among other
things, make the collective assets of the Alliance
available for WEU-led operations in the context of
the CFSP. With the stroke of a pen, this would provide the WEU with the military capabilities to
conduct its Petersberg tasks in cases where the
United States would not be willing to become engaged. The trend toward the WEU's constituting a
strong European pillar within a reformed NATO
was further reinforced by the NATO foreign ministers at their June 1996 meeting in Berlin.
For the time being the WEU aims to be able
to plan and control a "Petersberg operation" at up
to the level of a military corps. To reach such a
level of capability, the WEU is developing an exercise program airned at the coordination of forces
and politicaVmilitary control of (limited) operations. The WEU gained useful experiences for
such missions during the Yugoslav war, where it
was involved in monitoring the compliance of
shipping (including search actions) in order to enforce UN sanctions against Serbia and Montenegro in the Adriatic (jointly with NATO in Operation Sharp Guard). A WEU police and customs
operation to support the implementation of UN
sanctions has been conducted jointly with Romania, Bulgaria, and Hungary, and the WEU also
sent a small group of police experts to Mostar in
support of an unsuccessful EU-Ied operation to establish local government in that Bosnian city.

487

The WEU has also stepped up its efforts to

coordinate defense and armaments co operation
among its members. Apart from the Planning Cell,
WEU chiefs of defense staff now meet at least
twice a year. A Western European Arrnaments
Group (WEAG) has been set up within the WEU
and is attempting to open up the European defense
equipment market, the aim being that European
armed forces should be equipped with identical or
interoperable equipment. An armaments secretariat has been established within the WEU's Secretariat-General, and the creation of a European
armaments agency is under study.
The end of the Cold War has provided the
WEU with the opportunity to become the focal
point of the emerging ESDI. The WEU's position
as the hinge between the EU and NATO stresses its
importance as a link between both organizations
but at the same time makes its situation particularly unpredictable. Intense negotiations to revise
the EU-WEU relationship took place during the
1996-1997 intergovernmental conference (IGC).
Two basic options were identified by WEU member states: first, a reinforced partnership between
an autonomous WEU and EU; second, a merger
(be it immediate or over time) of both organizations. For a variety of reasons, Britain, Denmark,
Ireland, Sweden, Finland, and Austria support the
former option; other EU-WEU member states are
predisposed (with varying degrees of enthusiasm)
toward the latter choice. A full EU-WEU merger
would certainly have resulted in institutional tidiness, strengthened the EU's diplomatic c1out, and
achieved greater coherence in Europe's action in
the foreign, security, and defense policy fields. In
the event, Britain, Denmark, and the neutrals
blocked French and German efforts at the decisive
Arnsterdam summit on June 16 and 17, 1997, to
merge the EU and WEU. Although the Arnsterdam
Treaty perrnits the EU to use the WEU to conduct
Petersberg tasks on its behalf, the treaty also contains a watered-down commitrnent to the eventual
development of a common EU defense policy.
As the natural link between the EU's CFSP
and NATO, the WEU will continue to play an important role in Europe's emerging security framework in the years ahead. Further cooperation in the
security and defense fields on a European level will
continue because of shared geopolitical reasons and
declining defense budgets. For the time being, however, NATO will remain the leading player, since it
draws in the Arnericans, has the required military

488

White Paper

assets and infrastructure, and has tried and tested

procedures for collective action. The unpredictability of the domestic and foreign policy course of
Russia only adds to the Europeans' need to ensure
the continued involvement of the United States in
guarding Europe's ultimate security.
With the creation of a CJTF arrangement between the WEU and NATO, and France's shift toward c10ser military cooperation with NATO, it
has become very unlikely that the WEU will become a nuc1eus for a European army, especially as
West Europeans lack the political will as weIl as
the financial resources to set up a parallel military
structure alongside NATO. Thus, the WEU will
remain the platform par excellence for the formation of an ESDI, preparing coordinated responses
(and, if needed, additional operational capabilities) to crises on the EU's periphery. By its very
nature this will take time, and it is certainly overly
optirnistic to assurne that this process will be completed within the next few years. The 1996-1997
IGC and the ensuing Amsterdam Treaty should
therefore not be seen as a "moment of truth" but
as, it is to be hoped, one further, very important,
step toward the deve10pment of a mature and powerful Europe in which the WEU's role will become further defined.
See also COMMON FOREIGN AND SECURITY
POLICY; FRANCE, GERMANY, AND POST-COLD WAR
EUROPE; NORTH ATLANTIC TREATY ORGANIZATION;
APPENDIX

3.

Bibliography
Bloed, Arie, and Ramses A. WesseI, eds. 1994. The
Changing Functions of the Western European
Union: lntroduction and Basic Documents. Dordrecht: Nijhoff.
Chaen, Alfred. 1990. The Western European Union and
NATO: Strengthening the Second Pillar of the Alliance. Washington, DC: Atlantic Council.
Cromwell, Williarn C. 1992. The United States and the
European PiZlar: The Strained Alliance. New York:
St. Martin's.
Gompert, David C., and Stephen Larrabee, eds. 1997.
America and Europe: A New Partnership for a New
Era. Carnbridge: Carnbridge University Press.
Gordon, Philip, ed. 1997. NATO's Transformation: The
Changing Shape of the Atlantic Alliance. Lanham,
MD: Rowman and Littlefield.
van Harn, Peter. 1995. ''The Development of a European
Security and Defense Identity." European Security 4,
no. 4 (Winter).

-Peter van Harn

Whlte Paper
A white paper is a Comrnission document setting
out proposed legislative initiatives. However, the
term is often used to refer to the Comrnission's famous June 1985 publication outlining the legislative steps necessary to achieve a single market in
the EC by the end of 1992. Officially entitled
Cornpleting the Internal Market, the white paper
caught the attention of businesspeople and politicians and generated enough momentum to get the
single market program off the ground. It was endorsed in the Single European Act of 1986 and
played a pivotal part in the EC's revival and transformation at the end of the 1980s.
See also SINGLE MARKET PROGRAM.

Wlison, Harold (1916-1995)

In 1967, as prime minister of Britain, Harold Wilson presented his country's second application for
EC membership. Wilson was equivocal about
joining the Comrnunity, but like Harold Macmillan in the early 1960s, Wilson saw no feasible alternative. In 1975, again as prime minister (after
an interlude during which Edward Heath, the Conservative Party leader, brought Britain into the
EC), Wilson fulfilled an election pledge and renegotiated the terms of Britain's accession. The
renegotiations las ted eleven months, dominated
two EC sumrnits, and were an early indicator of
what a difficult member state Britain would be.
Again in fulfillment of an election pledge, Wilson
called a referendum (held on June 5, 1975) on
whether or not Britain should stay in the EC,
based on the renegotiation terms. The result was a
vote in favor of continued membership (67.2 percent for, 32.8 percent against, and a 67 percent
turnout), but the conduct of the renegotiation, and
of the referendum itself, perpetuated ambivalence
in Britain about EC membership-an ambivalence
that Wilson personified.
See also UNITED KINGDOM.

Worklng Groups
Consisting of member-state and Comrnission officials, working groups scrutinize draft EU legislation on behalf of the Committee of Permanent
Representatives (COREPER). There are approximately two hundred working groups altogether:
some meet two or three times during any sixmonth Council presidency; others with less work

World Trade Organization (WTO)

to do or with less political momentum behind

them meet perhaps only once or twice a year. If
the working groups can agree or are near agreement so that COREPER can then adopt the proposal at its weekly meetings, the proposal becomes an "A" point and is adopted without
discussion by the Council. If the working group
cannot agree, COREPER will attempt to make a
decision. Failing that, the Council itse1f will discuss the proposal.
See also COMMITIEE OF PERMANENT REPRESENTATIVES; COUNCIL OF MINISTERS.

World Trade Organlzatlon

(WTO)

Trade is the lifeblood of the European economy.

Almost twe1ve million European jobs depend directly on exports, and as the world's largest trade
grouping, the EU on its own accounts for more
than one fifth of total global trade in goods. As it
has been from the earliest moments of European
integration, therefore, the promotion of free trade
is one of the main aims of the EU.
Trade liberalization took a major step forward with the conclusion of the Uruguay Round
of the GATT in April 1994, producing an agreement that substantially liberalizes trade in a number of areas. But perhaps the crowning achievement of the Uruguay Round was the creation of
the World Trade Organization (WTO), which
came into being on January 1, 1995.
The origins of the WTO go back as far as
1947, well before the EU existed. The Uni ted
States, very much the dominant player at that
time, proposed a GATT to encapsulate tariff negotiations held after the war. The United States also
proposed setting up an International Trade Organization. This was agreed to internationally but was
not subsequently approved by the U.S. Congress
in the 1950s. The GATT thereby became, by default, both an international trade agreement and a
temporary organization with rules governing international trade. This "temporary" arrangement,
however, was to last for almost fifty years.
The GATT oversaw successfully a great expansion of international trade in the postwar period. Moreover, a flexible approach to the rule by
which all decisions had to be reached by consensus helped to keep the organization together. But
the problems of using the GATT to govern the increasingly complex world trading system were be-

489

coming more and more obvious by the late 1980s.

The consensus approach often meant that problems had to be sidestepped. The internal workings
of the GATT were slow and provided many opportunities for delay. The GATT was difficult to
amend, which in turn led to the growth of side
agreements, binding only on those parties that
chose to accept their provisions. Use of the dispute settlement system, which had evolved in an
ad hoc way over the years into a generally effective multilateral sanctions regime, could be
blocked by the consensus principle.
Perhaps most important of all, the ruIes of the
world trading system were starting to outgrow the
institutional mechanisms of the GATT, which applied only to goods and not to services or intellectual property. From a European perspective, services and intellectual property formed a crucial
element of the single market, and it was time to
extend new disciplines in these areas at the multilateral level. In the meantime, such "new trade issues" as the environment, competition, labor standards, and investment were crowding onto the
world trade stage and also needed to be considered in their own right.
For all these reasons, when the issue came up
at an early stage of the Uruguay Round negotiations, the EU supported the concept of a new international trade organization to act as a successor
to the GATT. The idea surfaced for the first time
publicly at the December 1990 Brussels GATT
ministerial meeting, and a draft charter for a new
organization appeared in the so-called Dunkel
draft agreement of 1991. In the final hours of the
negotiations at the end of 1993, the fledgling organization was renamed the World Trade Organization (at the urging of the United States), and the
proposal was finally accepted at Marrakech in
April 1994 at the close ofthe Uruguay Round.
The WTO transforms the GATT organization
into a permanent, global-scale trade body. It consolidates a number of different trade accords,
some of which were reached in the Uruguay
Round, some before. The WTO therefore has a
much wider remit than its predecessor. This includes the old GATT (now called GATT 1994, to
take account of changes agreed to in the Uruguay
Round); the new General Agreement on Trade in
Services (GATS); the Trade-Related Aspects of
Intellectual Property Rights (TRIPs) and TradeRelated Investment Measures (TRIMs) agreements; the four plurilateral agreements in govern-

490

World Trade Organization (WTO)

ment procurement, civil aviation, meat, and dairy

products; and the Dispute Settlement Understanding (DSU).
As an organization, the WTO enjoys equal
status with other major international economic organizations, notably the International Monetary
Fund and the World Bank, and trade is thereby finally elevated to its true level in the international
economic pantheon. The WTO is a much more
important political forum than the GATT, with biennial ministerial meetings and plenty of scope
for greater political input more generally.
The operation of the multilateral trade system
meshes weIl with the EU's common commercial
policy. Trade policy is formed in what is best described as a constant exchange between the Commission and the Council of Ministers. For exampIe, the Commission made recommendations to
the Council on negotiating positions in the
Uruguay Round; the Council authorized these,
and the Commission negotiated in liaison with the
so-called 113 Committee, made up of representatives from the member states. This committee,
named after the relevant Treaty of Rome artic1e,
operates as an advisory "sounding board" for the
Commission and as a means of transmitting information to and from the member states. Final decisions ultimately rest with the Council, but because
the Council operates under qualified majority voting rules in this area, no one member state (at least
formally) can block a final deal. In the case of the
Uruguay Round, the Commission proposed (with
the agreement of the Council) that the necessary
legislation to ratify the final agreements should be
agreed by unanimity, which was duly achieved.
Overall, division of responsibilities (or "competence") between the member states and the EU
as a whole is a complex subject (for example, the
member states themselves are members of the
WTO). However, in the WTO, as in trade negotiations generally, the Commission acts on behalf of
the EU as a whole.
The key test of an international organization
such as the WTO is perhaps its effectiveness in
settling disputes. In the GATT, the operation of
the consensus principle was undermining the effectiveness of dispute settlement. Especially before 1986, a party that had infringed the rules
could both block the formation of a dispute settlement panel (to examine the case) and-in the
event that the panel did meet-<.:ould block adoption of the report by the GATT Council. Such

blocking maneuvers did not occur very often, because the countervailing political pressures were
often substantial. But the very possibility of
blockage damaged the credibility of the whole
procedure.
A number of GATT "contracting parties" (as
GATT members were known), inc1uding both the
Europeans and the Americans, feIt that the time
had come for fundamental reform, notwithstanding the fact that both had succumbed to the temptation to block the process from time to time (the
Europeans feIt particularly exposed in the agricultural area). From a European perspective, another
major problem was the intrinsic legal quality of
some of the panel reports. But perhaps the most
crucial factor was the development of the Section
301 farnily oflegislation in the United States (particularly in the 1988 Omnibus Trade Act), with its
potential for unilateral imposition of U.S. policy
against others. Without an effective dispute settlement procedure, the EU argued, the United States
would have greater incentive to employ Section
301, seeking to act unilaterally as both judge and
jury in settling its disputes. Moreover, it did not
escape European notice that a more effective dispute settlement procedure could itself be used to
tackle unilateral U.S. action of this kind.
The DSU of the WTO is a carefully crafted
compromise. It combines what is now a virtually
judicial procedure for settling disputes with an innovative safety valve. The procedures of the Dispute Settlement Body (DSB) are strearnlined and
expedited; for example, there is now a strict
timetable and automatic adoption of judgments by
WTO panels. The safety valve to which a losing
party can appeal is the new Appellate Body, made
up of leading figures from the world of international commerciallaw, with an independent secretariat, which should also go some way to rectifying EU concerns about the quality of past panel
reports. FinaIly, even the decision of the Appellate
Body can be overturned, but only by unanimity in
the General Affairs Council. The result is that
there is now a more solid, adequate, and enforceable set of rules that will help make international
trade both more transparent and more predictable.
By cutting tariffs by almost 40 percent and
tackling old sectors such as agriculture and textiles, as weIl as opening up new areas such as intellectual property and services, the Uruguay
Round showed that the multilateral route to trade
liberalization remains a successful one. Indeed, it

WTO

was agreed at Marrakech in 1994 to tadele a substantial package of further work in the future. In
the Commission's view, the world trade cornrnunity should now begin the preparatory work with a
view to launching a new phase of trade negotiations before the end of the century.
But what areas should the new negotiations
cover? The key approach is to find ways for improved market access. The international trade
cornrnunity is already tackling trade barriers, and
in some areas (such as industrial tariffs) the work
is proceeding faster than originally planned. Discussions have begun in other sectors, such as information technology products, to go beyond the
Uruguay Round. There is much more work to do
in the services sector. Although the door to further
liberalization was opened in the Uruguay Round,
contracting parties must now work to ensure that
the liberalizing cornrnitments match the importance of this sector. And work must continue on
the new trade issues.

491

Overall, the WTO has a critical role to playas

the motor of continued trade liberalization. In the
years to come, the new organization will be seen as
one of the most important results of the Uruguay
Round. Without doubt, the EU will continue to play
a major role in the conduct of its affairs.
See also GENERAL AGREEMENT ON TARIFFS
AND TRADE; U.S.-EU RELATIONS: TRADE AND INVESTMENT.

Bibliography

Paemen, H., andA. Bensch. 1995. From the GATTto the

WTO: The European Community in the Uruguay
Round. Leuven: Leuven University Press.
Van Dijck, Pitou, and Garrit Faber, eds. 1996. Challenges to the New WTO. The Hague: Kluwer.

-Hugo Paemen

WTO
See WORLD TRADE ORGANIZATION.

exchanges, training courses, and seminars for educators as weH as coHaboration between member
states on youth policy issues. The current program,
Youth for Europe m, runs from 1995 to 1999.
See also EOUCATION, VOCATIONAL TRAINING,
AND YOUTH POLICY.

Yugoslavia

Yaounde Convention
The Yaounde convention, a development assistance agreement between the EC and seventeen
African states and Madagascar (all former
colonies of EC member states), was signed in
1964. In 1975, it was incorporated into the Lome
convention, which extended the geographical
scope of the EC's development assistance program to include Caribbean and Pacific, as well as
African, ex-colonies.
See also LOME CONVENTION.

Year of Europe
In order to overcome recent strains in U.S.-EC rela-

tions and influence the development of European

Political Cooperation, Henry Kissinger, the U.S.
national security adviser, decided to designate 1973
the "Year of Europe." While unveiling his
grandiose scheme, which included a call for a New
Atlantic Charter, Kissinger appealed for doser cooperation on trade, defense, and foreign policy issues. Most Europeans responded unfavorably, seeing in Kissinger's initiative a bid to assert U.S.
hegemony under the cloak of a better transatlantic
bargain. Kissinger's distinction between a regional
role for Europe and global responsibilities for the
United States seemed especially condescending.
Far from reassuring European opinion, Kissinger
merely exacerbated relations with the EC, and the
much-vaunted Year of Europe came to nothing.
See also U.S.-EU RELATIONS: THE POLITICS
OF PARTNERSHIP.

Youth for Europe

Under the auspices of the EU's education policy,
Youth for Europe is a program to promote youth

How ironic that the twentieth century should end

almost as it began: with war in Sarajevo precipitated by Serb nationalism and threatening world
peace and stability. In 1914, Bosnian Serb Gavrilo
Princip's assassination of Austrian archduke Francis Ferdinand and his wife was the pretext for
World War I. At century's end, Serbian president
Slobodan Milosevic's pretensions to a Greater
Serbia resulted in "ethnic cleansing" and massive
population resettlements of Croats and Bosnian
Muslims from Serb-occupied territories, which
again led to war in the Balkans. The war in Bosnia
was not a civil war but a war of aggression by Serbia. It is a myth that "ancient ethnic hatreds" in
Bosnia were bound to flare up after the collapse of
communism. Milosevic, aided by Bosnian-Serb
leader Radovan Karadic, pursued a clear strategic
aim to create a new Yugoslavia in name but a
greater Serbia in reality. As the European Council
concluded: "Although all parties have contributed,
in their own way, to the present state of affairs, by
far the greatest share of the responsibility falls on
the Serbian leadership and the Yugoslav army controlled by it" (Commission, 1995, p. 20).
The EU has been closely involved in the latest
Balkan conflict, acting as mediator, broker, and putative peacekeeper. The conflict was an early test of
the EU's Common Foreign and Security Policy
(CFSP) and an opportunity for the fledgling EU to
assert itself internationally. However, the Balkan
conflict has been not only disastrous for the region
itself but also damaging for the EU. Far from curtailing or ending hostilities, the EU's actions may
even have escalated the war in the Balkans. Only
when the United States decided to become militarily involved did the fighting stop. In terms of
transatlantic relations and foreign policy generally,
as well as domestic self-confidence, the Yugoslav
war was a serious setback for the EU.
Chronology of the Conflict
While the EC was still in the process of negotiating economic "sticks" and "carrots" with Yu-

493

494

Yugoslavia

goslav prime minister Markovic in the spring and

summer of 1991, the consensus holding the country together collapsed on June 23 under Slovene
and Croat pressure for secession. As Yugoslavia
disintegrated into ethnic conflict, EU concern
about the situation was overshadowed by concern
about the disintegrating Soviet Union. No one was
willing to risk antagonizing Russia with the suggestion that military intervention in Yugoslavia
was a possibility.
As war grew more bitter through the summer
of 1991, the EC and the UN launched ajoint effort
to achieve a cease-fire and an agreement among
all Yugoslav republics. In August, after the failure
of a first EC peacekeeping mission, the EC gave
Serbia until November 5 either to agree to its plan
for an association of sovereign Yugoslav republics
or face economic sanctions and the possible
recognition of Croatia and Slovenia. Also, the European Council asked the Western European
Union (WEU) to draw up plans for a possible
peacekeeping operation.
During fall 1991, German foreign minister
Hans-Dietrich Genscher pressed his EC colleagues to recognize Slovenia and Croatia immediately and to consider recognizing Bosnia and
Macedonia. Historically Germany had been allied
with Croatia, and there was a sizable Croat minority in Germany itself. At a tense General Affairs
(foreign ministers) Council meeting on December
15, the other member states acquiesced in German
pressure and agreed to recognize Slovenia and
Croatia in mid-January 1992, despite French and
British objections (in the event Germany announced unilateral recognition of the two states on
December 18).
In early 1992 the member states remained divided over whether to recognize Bosnia and
Herzegovina but adopted the minimalist li ne of
undertaking to recognize any republic that sought
independence, provided it respected human rights,
minority rights, and existing borders and cooperated with the EC and UN. The EC did not recognize Macedonia, however, because of Greek objections to the name of the proposed new state,
which was also the name of a Greek province.
The UN Protection Force (UNPROFOR),
established in February 1992, was to be an interim arrangement to bring about the conditions
for peace and security within the framework of
the EC-sponsored Conference on Yugoslavia.
UNPROFOR quickly enlarged its mandate, how-

ever, to support humanitarian efforts by the UN

High Commissioner for Refugees (UNHCR) and
to provide security for humanitarian missions.
By 1994 European countries provided half of
UNPROFOR's forces, with almost 12,800 soldiers coming from the EC member states (6,200
French, 2,400 British, 1,306 Danish, 1,080
Dutch, 995 Spanish, and 808 Belgian).
On March 1, 1992, Bosnia-Herzegovina
voted for independence. It was ironic that the
Helsinki Accords of 1975 should have become the
incompatible basis for both the "self-determination" of the Bosnians, which drove them to fight
to get out of Serbia's control, and the "territorial
integrity" of the Serbs, which drove them to fight
to keep Yugoslavia together. Thus Bosnia's declaration of independence precipitated a retaliatory
declaration of independence the following day by
the self-styled Serbian Republic, with its own parliament and army (in reality a branch of the Yugoslav National Army). On April 7, the EC recognized Bosnia.
In the meantime, on January 11, 1992, a commission of inquiry under Robert Badinter, set up
by foreign ministers to consider the contentious
question of diplomatic recognition, recommended
recognition of Macedonia as soon as it satisfied
essential democratic and human rights preconditions and suspension of the recognition of Croatia.
At the European Council in Lisbon on June 26
and 27, 1992, the heads of state and govemment
stated their determination "to help the peoples of
the former Yugoslavia, and reiterated that the EC
Conference on Yugoslavia, chaired by former
British foreign secretary Lord Carrington, was the
only forum capable of ensuring a durable and equitable solution to the outstanding problems of the
formerYugoslavia" (Commission, 1995, p. 21). At
the London conference in August 1992, British
prime minister John Major called for "pressure"
against the Serbs, but French president Mitterrand
refused to permit military intervention, not wanting
"to add war to war" (Gnesoto, 1994, p. 5). At the
EC foreign ministers' meeting in Brussels on December 27, 1992, it was agreed to seek UN authority for new sanctions, including the physical sealing of Serbia's frontiers, cutting off all postal and
telecommunications contacts, and removing Serbia
and Montenegro from all international bodies.
In early 1993, the EC and UN envoys put
forth another plan negotiated with Bosnian Serbs,
Croats, and Muslims (but accepted only by the

Yugoslavia
Serbs) that would divide Bosnia into ten autonomous provinces under a weak: central government. Later, in April, EC foreign ministers agreed
to rely on tougher economic sanctions rather than
resorting to such military actions as air strikes that
would destroy Serb supply lines but could also destroy humanitarian aid routes to be1eaguered Muslims. Also, the EC proposed taking steps to exc1ude Yugoslavia from all international
organizations, and member states planned to
freeze Serbian accounts in their banks (accounts
that the Frankfurter Allgemeine Zeitung commented "have been empty for some time").
During the summer of 1993, "the unitary,
confederal solution contained in the [EC-UN]
peace plan was de facto abandoned . .. and replaced by the new [EC-UN partition] plan. Despite protestations to the contrary . . . all were
ready to recognize the fait accompli of territorial
gains made by the Serbs and Croats in Bosnia.
The method was mediation and impartiality in negotiations" (Gnesotto, 1994, p. 4). During the political and military stalemate that followed, senior
diplomats from the United States, Russia, France,
Germany, and Britain (the so-called Contact
Group) met in Geneva at a UN-EU-sponsored International Conference on the Former Yugoslavia
and sought to establish a single, coherent international policy on the Bosnian war. The new initiative that followed in spring 1994 provided for a
four-month cease-fire and a 51 percent:49 percent
partition favoring the Bosnian-Croat Federation.
The Bosnian Serbs' rejection of the plan prompted
Serbia's beleaguered Milosevic to cut ties with his
erstwhile Bosnian Serb allies.
On February 7 and 8, 1994, the Council of
Ministers published a dec1aration on Bosnia calling for a meeting of the NATO Council at the earliest possible stage. Artic1e J.4 (1) of the TEU,
which provides the EU with the authority to request WEU intervention on the EU's behalf, was
ignored because the WEU did not have the resources for such an undertaking. New cease-fIres
and successive attempts at negotiation failed during the following eighteen months. For reasons
not of its own creating, UNPROFOR continued to
lose effectiveness and credibility. In November
1995, in frustration, the United States convinced
all parties involved in the conflict to travel to Dayton, Ohio, far from the media and from domestic
political pressure. Eventually U.S. assistant secretary of state Richard Holbrook brokered a sett1e-

495

ment. On December 15, 1995, UNPROFOR was

replaced by the Implementation Force (IFOR),
and the UN's military command was replaced by
NATO. On December 16, NATO's supreme commander in Europe, George Joulwan, authorized
sixty thousand NATO troops to enter Bosnia.
IFOR kept the pe ace in Bosnia during the next
twelve months, then was replaced by the Stabilization Force (SFOR) when its mandate expired
in December 1996.
The IFOR and SFOR missions to monitor
and enforce compliance with the Dayton Accords
were divided into two parts: one military, under
NATO command; the other civil (dealing with issues such as reconstruction and governance), under EU and Organization for Security and Cooperation in Europe (OSCE) auspices. Among other
things, the EU was to provide major funding, the
OS CE to manage e1ections called for in the accords. Speaking in February 1996, NATO secretary-general Javier Solana stated that the NATOled operation in Bosnia demonstrated how the
alliance had adapted its forces and policies to the
requirements of the post-Cold War world while
continuing to provide collective security and defense for its members. Clearly, NATO's success
meant that, in practice, the EU's European Security and Defense Identity (ESDI) would not develop primarily around the WEU (as indicated in
Artic1e J.4 of the TEU) but around NATO.
Apart from country-wide peacekeeping efforts, the EU became directly involved in a highly
publicized reconstruction and reconciliation effort
in Mostar, acity in Bosnia bitterly divided between
Croats and Muslims, which came to symbolize the
failure of EU policy throughout the Balkans. Member states sanctioned the EU administration of
Mostar as a CFSP joint action (under Artic1e J.3 of
the TEU) and appointed Hans Koschnik, formerly
mayor of Bremen, as EU administrator there. As
part of a local peace agreement, Koschnik directed
a $200 million reconstruction program and began
the process of reunifIcation by establishing a joint
city police force and a joint government. But
Koschnik's efforts to reconcile both sides further
alienated local opinion, and EU money was poorly
spent. Koschnik resigned in July 1996, leaving
Mostar's future in doubt. Indeed, the city's unifIcation is overdue according to the Dayton timetable.
The EU's involvement in Mostar has been a costly
disappointrnent and an embarrassing symbol of the
failure of EU policy toward the former Yugoslavia.

496

Yugoslavia

U.S.-EU Relations
The United States and the EU have had many differences regarding ex -Yugoslavia: some tactical,
some strategic and fundamental. At the outset they
disagreed about what role, if any, the Uni ted
States should have. Initial European arrogance
was summed up in an oft-quoted statement made
in lune 1991 by lacques Poos, Luxembourg's foreign minister and president of the Council of Ministers, that "this is the hour of Europe." Later,
when the Europeans sought active U.S. involvement in the conflict, it seemed that the Uni ted
States did not see engagement in Europe as a vital
interest. On the other hand, it appeared that the
Europeans were incapable of handling a major
European crisis by themselves.
Among many differences was the European
contention that U.S. secretary of state Baker gave
the Serbs a "green light" to use force to keep Yugoslavia together when he traveled to Belgrade on
lune 21, 1991, warned Yugoslav leaders of the
"dangers of disintegration," and announced that the
United States would not recognize secessionist republics (Dinan, 1994, p. 485). Germany's insistence on recognizing Croatia and Slovenia was another bone of contention between the Americans
and Europeans and among the Europeans themselves. Karsten Voigt, foreign policy spokesman for
Germany's opposition Social Democratic Party, declared that the question was not what effect recognition had "but whether the status quo in Yugoslavia
could be maintained. . . . The main problem was
that Baker ... believed the status quo could be kept,
and the Americans stuck with that for far too long.
... The American mistake was one of analysis; the
German mistake was one of tactics" (Oberdorfer,
1993). EU negotiator David Owen commented that
the war in Bosnia would have been over in 1995 if
President George Bush had been reelected in 1992.
Instead, he claimed, newly elected President Clinton had opposed the EU-UN peace plan, with the
result that fighting had been prolonged.
Clearly, one of the major reasons why the international community was unable to halt the conflict in former Yugoslavia for several years was
that the Allies were divided across the Atlantic on
how best to bring it to an end. Meanwhile, the parties to the conflict were able to exploit Allied differences to suit their own purposes and thereby
continue the war. Even as IFOR's mandate came
to an end, the United States and EU disagreed on
how best to help Bosnia, with the United States

maintaining that the Bosnians should be given

arms to defend themselves against possible Serb
incursions and the Europeans maintaining, equally
stridently, that giving weapons to the Bosnians
would inflame the conflict and result in renewed
war, not peace.
Tentative Lessons
A number of tentative conclusions and lessons can
be reached based on EU policy toward Yugoslavia
and on international involvement in the Yugoslav
conflict generally.
The Yugoslav experience demonstrates the
difficulty of developing a common defense policy
for the EU. Yugoslavia has also shown that great
care must be taken in crafting CFSP, lest member
states find themselves comrnitted to policies and
objectives that they (or their constituents) cannot
support. CFSP will not develop automatically, the
consequence of simple spillover from the economic to the political spheres of integration, in the
way that functionalists once thought that it would.
Instead, CFSP's success will require explicit national commitment.
The Yugoslav experience shows that Britain,
France, and Spain probably will shoulder most of
Western Europe's military burden. Despite real
and perceived differences on defense policy and
on policy toward the WEU and NATO, military
action, once taken, will draw France and Britain
together, rather than drawing France and Germany
together, as might have been expected.
Active U.S. involvement in European security affairs continues to make the crucial difference between the success and failure of European
security initiatives. IFOR and SFOR are a resounding confirmation of the value of the transatlantic link and of NATO. At the same time, there
are markedly different perspectives on defense
and security on the two sides of the Atlantic.
NATO's role in European security has been
enhanced, the UN's role has been diminished, and
the WEU's role has been circumscribed within
NATO. Because of NATO's preeminence, and the
WEU's necessarily subordinate role, the role of
the Uni ted States in European defense policies
will increase, not decrease, raising challenging
questions about the future ofU.S.-EU relations.
Perhaps ex-Yugoslavia is not a good test case
for European defense; indeed, bad cases make bad
law. Perhaps the war came too soon, before it was
possible to develop a common European position,

Yugoslavia 497
let alone a CFSP. Arguably, individual memberstate problems 100m too large politically to develop a feasible CFSP or may be insurmountable.
Perhaps Yugoslavia really is not as strategically
important as some have claimed, and the EU
member states should accept that. However, one
lesson of the Yugoslav debacle is incontrovertible:
lack of resolve to use force against aggressors
merely encourages further aggression.
See also A PEACE AND SECURITY SYSTEM FOR
POST-COLD WAR EUROPE: PREVENTING FUTURE
"YUGOSLAVIAS."

Bibliography

Commission. 1995. The European Councils: Conclusions

of the Presidency, 1992-94. Luxembourg: Office for
Official Publications of the European Communities.

Dinan, Desmond. 1994. Ever Closer Union? An 1ntroduction to the European Community. Boulder: Lynne
Rienner.
Gnesotto, Nicole. 1994. Lessons of Yugoslavia. Paris:
Institute for Security Studies, Western European
Union.
Newhouse, John. 1993. "No Exit, No Entrance." New
Yorker (June 28).
Oberdorfer, Dan. 1993. "UN Halts Most Bosnian Relief." Washington Post (February 18), p. A29.
Santer, Jacques. 1996. ''The European Union's Security
and Defense Policy: How to Avoid Missing the Rendez-vous." NATO Review 43, no. 6 (November), pp.
12-16.
Zimmermann, Warren. 1995. ''The Last Arnbassador: A
Memoir of the Collapse of Yugoslavia." Foreign Affairs (March/April), pp. 1-20.

-1. Bryan Collester

ABBREVIATIONS AND
ACRONYMS

AC

Advisory Committee

BSE

ACEA

Association of European
Automobile Manufacturers

Bovine Spongifonn
Encephalopathy

BT

British Telecommunications

ACP

African, Caribbean, and Pacific

CACM

ACUSE

Action Committee for the

United States of Europe

Central American Common

Market

CAG

Competitiveness Advisory
Group

CAP

Common Agricultural Policy

CASA

AMCHAM-EU American Chamber of

Commerce in the European
Union

Construcciones Aeronauticas
S.A.

CCC

Consumer Consultative
Committee

AMTE

Allied Maritime Transport

Executive

CCP

Common Commercial Policy

APEC

Asia Pacific Econornic

Cooperation

CD-ROM

Compact Disk-Read Only

Memory

AR

Assembly of the Republic

CDU

Christian Democratic Union

ASEAN

Association of Southeast Asian

Nations

CEAC

Conference of European Affairs

Committees

AT&T

American Telephone and

Telegraph

CEDAG

European Council for Voluntary

Organizations

BCC

Business Cooperation Center

CEDEFOP

bcm

billion cubic meters

European Center for the

Development of Vocational
Training

BC-Net

Business Cooperation Network

CEEP

Benelux

Belgium, the Netherlands, and

Luxembourg

European Center of Public

Enterprise

CEES

European Bureau of Consumers'

Unions

Central and Eastem European

States

CEFlC

Belgian-Luxembourg Econornic
Union

European Council of Chernical

Manufacturers Federation

CEI

Central European Initiative

AER

Assembly of European Regions

AIDS

Acquired Immunodeficiency
Syndrome

BEUC
BLEU

499

500

Abbreviations and Acronyms

CEN

European Standards Committee

COSAC

Conference des organes

specialises dans les affaires
communautaires

CENELEC

European Electrotechnical
Standards Committee

CEO

Chief Executive Officer

COST

European Cooperation in the

Field of Scientific and
Technological Research

CET

Common Extemal Tariff

CFCs

Chlorofluorocarbons

CSCE

Conference on Security and

Cooperation in Europe

CFI

Court of First Instance

CFLN

French Committee of National

Liberation

CSCM

Conference on Security and

Cooperation in the
Mediterranean

CFP

Common Fisheries Policy

CSFs

Common Foreign and Security

Policy

Community Support
Frameworks

CFSP

CSU

Christian Social Union

CTMO

Community Trademark
Office

CTP

common transport policy

CTRs

Common Technical Regulations

DASA

Daimler-Benz Aerospace

DG

DirectorlDirectorateGeneral

DSB

Dispute Settlement Body

CIREA

Center for Information,

Discussion, and Exchange on
Asylum

CIREFI

Center for Information,

Discussion, and Exchange on
the Crossing of Borders and
Immigration

CIS

Commonwealth of Independent
States

CITF

Combined Joint Task Forces

DSU

CMEA

Council for Mutual Econornic

Assistance

Dispute Settlement
Understanding

EAD

Euro-Arab Dialogue

CO 2

Carbon Dioxide

EAGGF

COFACE

Committee of Farnily
Organizations in the Community

European Agricultural Guidance

and Guarantee Fund

EBRD

European Bank for

Reconstruction and
Development

EBS

Europe by Satellite

COM

Commission

COM

Common Organization of the

Market

COMECON

Council for Mutual Econornic

Assistance

EC

European Community

ECB

European Central Bank

COMETI

Community Action Program in

Education and Training for
Technology

ECE

European Commission for

Europe

ECHO

COR

Committee of the Regions

European Community
Humanitarian Office

COREPER

Committee of Permanent
Representatives

ECIR

European Center for Industrial

Relations

CORINE

Coordinating Information on the

Environment

ECIS

European Center for

Infrastructural Studies

Abbreviations and Acronyms

501

ECJ

European Court of Justice

EP

European Parliament

ECOFIN

Council of Economic and

Finance Ministers

EPC

European Political Cooperation

EPP

European People's Party

ECS

European Company Statute

EPU

European Payments Union

ECSAs

European Community Studies

Associations

EPU

European Political Union

ECSC

European Coal and Stee1

Community

ERASMUS

European Community Action

Scheme for the Mobility of
University Students

ECU

European currency unit

ERDF

EDC

European Defense Community

European Regional
Development Fund

EDF

European Development Fund

ERM

Exchange Rate Mechanism

EDIG

European Defense Industry

Group

ERT

European Round Table of

Industrialists

EDU

EUROPOL Drugs Unit

ESA

European Space Agency

EEA

European Economic Area

ESA

EEA

European Environment
Agency

European Surveillance
Authority

ESC

European Economic
Community

Economic and Social

Committee

ESCB

EEIG

European Economic Interest

Grouping

European System of Central

Banks

ESDI

EFTA

European Free Trade

ArealAssociation

European Security and Defense

Identity

ESF

European Social Fund

EIB

European Investment Bank

ESPRIT

EICs

European Information
Centers

European Strategie Program for

Research and Development in
Information Technology

ElF

European Investment Fund

ETC

European Topic Center

ELDO

European Launch Development

Organization

ETSI

European Telecommunications
Standards Institute

ELDR

European Liberal, Democratic,

and Reformist Party

ETUC

European Trade Union

Confederation

EMEA

European Agency for the

Evaluation of Medicinal
Products

EU

European Union

EUI

European University Institute

EURATOM

European Atomic Energy

Community

EUREKA

European Research
Coordination Agency

EURES

European Employment
Services

EEC

EMI

European Monetary Institute

EMS

European Monetary System

EMU

Economic and Monetary

Union

ENs

European Norms

502

Abbreviations and Acronyms

EUROCOOP

European Community of
Consumer Cooperatives

IBC

Integrated Broadband
Communication

EUROPOL

European Police Office

IEA

Institute for European Affairs

EUROSTAT

Statistical Office of the

European Communities

IEC

International Electrotechnical
Committee

EWCs

European Works Councils

IFOR

Implementation Force

EWL

European Women's Lobby

IGC

Intergovemmental Conference

FCMA

Friendship, Cooperation, and

Mutual Assistance Treaty

IMF

International Monetary Fund

IMPs

PDI

Foreign Direct Investment

Integrated Mediterranean
Programs

FEANTSA

European Federation of National

Organizations Working with the
Homeless

IRDAC

Industrial Research and

Development Advisory
Committee

FRG

Federal Republic of Germany

IRA

International Ruhr Authority

FPO

Liberal Party

IRELA

FTA

Free Trade Area

Institute of European-Latin
American Relations

FTAA

Free Trade Area of the Americas

ISO

International Standards
Organization

FYRoM

Former Yugoslav Republic of

Macedonia

ITA

Information Technology
Agreement

G7

Group of Seven Most

Industrialized Countries

ITO

International Trade Organization

G8

Group of Seven Most

Industrialized Countries plus
Russia

JHA

Justice and Horne Affairs

JRCs

Joint Research Centers

LAFTA

Group of Twenty-Four Most

Industrialized Countries

Latin American Free Trade

Association

LDR

General Agreement on Trade in

Services

Liberal, Democratic, and

Reformist Group

LI

Liberal Intergovemmentalism

LINGUA

Action Program to Promote

Foreign Language Competence
in the European Community

MAGP

Multi-Annual Guidance
Program

MCAs

Monetary Compensatory
Amounts

MED

Mediterranean

MEP

Member of the European

Parliament

MFN

Most-Favored Nation

G24
GATS
GATI

General Agreement on Tariffs

and Trade

GCC

Gulf Cooperation Council

GDP

Gross Domestic Product

GMP

Global Mediterranean Policy

GNP

Gross National Product

GSP

Generalized System of
Preferences

HDTV

High-Definition Television

HR

High Representative

Abbreviations and Acronyms

MPR

Movement Republicain Populair

MRAs

Mutual Recognition Agreements

MSAP

Multistate Drug Application

Procedure

NACC

North Atlantic Cooperation

Council

NAFfA

North American Free Trade

Agreement

NATO

North Atlantic Treaty

Organization

503

PCAs

Partnership and Cooperation

Agreements

PDS

Partito Democratico della

Sinistra

PES

Party of the European Socialists

PfP

Partnership for Peace

PHARE

Pologne et Hongrie: Actions

pour la Reconversion
Econornique

PLO

Palestine Liberation
Organization

NCI

New Community Instrument

NEPSS

New European Peace and

Security System

PP

People's Party

PS

Socialist Party

NF

Neofunctionalism

PSD

Social Democratic Party

NGO

Nongovernmental Organization

PSOE

Socialist Party of Spain

NlEO

New International Econornic

Order

PTAs

Preferential Trade Agreements

QMV

Qualified Majority Voting

NTA

New Transatlantic Agenda

RACE

NTB

Nontariff Barrier

Advanced Communication
Technologies for Europe

OAS

Organization of American
States

R&D

Research and Development

REDWG

Regional Econornic
Development Working Group

OCTs

Overseas Countries and

Territories

RPR

Rally for the Republic

OECD

Organization for Econornic

Cooperation and Development

RTD

Research and Technological

Development

OEEC

Organization for European

Econornic Cooperation

SAVE

Specifie Aetions for Vigorous

Energy Efficiency

OFTEL

British Office of
Telecommunication

sm

Strategie Defense Initiative

OJ

Official Journal 0/ the European

Communities

SEA

Single European Aet

SEDOC

ONP

Open Network Provisions

OPEC

Organization of Petroleum
Exporting Countries

European System for the

International Clearing of
Vacancies and Applications for
Employment

SELA

Organization foe Security and

Cooperation in Europe

Latin American Econornie

System

SEM 2000

Sound and Efficient

Management

SEPLLS

European Secretariat of the

Liberal, Independent, and Social
Professions

OSCE
OT

Occupied Territories

OVP

Conservative Party

PASOK

Socialist Party of Greece

504

Abbreviations and Acronyms

SFMG

Sound Financial Management

Group

TEU

Treaty on European Union

SFOR

Stabilization Force

TFHR

Task Force for Human

Resources

SIS

Schengen Information System

TRIMs

Small and Medium-Sized

Enterprises

Trade-Related Investment
Measures

SMEs

TRIPs

Trade-Related Aspects of
Intellectual Property Rights

TRNC

Turkish Republic of Northern

Cyprus

UFE

Union for Europe

UK

United Kingdom

UN

United Nations

UNCED

UN Conference on Environment
and Development

SNB

Special Negotiating Body

SPD

Social Democratic Party

SPO

Social Democrats

STABEX

System for the Stabilization of

Export Eamings from Products

STAR

Committee on Agricultural
Structures and Rural
Deve10pment

SYSMIN

System for the Stabilization of

Export Earnings from Minerals

UNCTAD

UN Conference on Trade and

Development

TABD

Transatlantic Business Dialogue

UNHCR

TACIS

Technical Assistance for the

Commonwealth of Independent
States

UN High Commissioner for

Refugees

UNICE

Union of Industrial and

Employers' Confederations of
Europe

UNPROFOR

UN Protection Force

UPE

Union for Europe

USSR

Union of Soviet Socialist

Republics

VAT

Value-Added Tax

VER

Voluntary Export Restraint

VRA

Voluntary Restraint Agreement

VSTF

Very Short Term Financing

Facilities

VVD

Freedom and Democracy Party

WEAG

Western European Armaments

Group

WEU

Western European Union

WTO

World Trade Organization

TACs

Total Allowable Catches

TACS

Transatlantic Advisory
Committee on Standards,
Certification, and Regulatory
Policy

TAD

Transatlantic Declaration

TAFTA

Transatlantic Free Trade

Area

TAM

Trade Assessment Mechanism

TAS

Technical Advisory Service

TCAs

Trade and Cooperation

Agreements

TEMPUS

Trans-European Mobility
Scheme for University
Students

TENs

Trans-European Networks

CHRONOLOGY

1950

1954

May 9 French foreign minister Robert Schuman, in a historic declaration at the Foreign
Ministry in Paris, calls for the pooling of
Franco-German coal and stee1 production in a
new supranational organization open to all European countries.

August 30

June 20 France convenes an intergovernmental

conference (lGC), held in Paris and chaired by
Jean Monnet, to implement the Schuman Plan
and organize the proposed European Coal and
Steel Community (ECSC).
Oetober 24

French prime minister Rene Pleven

announces a plan for German remilitarization
under the aegis of a European Defense Community.

1951
April 18

Treaty establishing the ECSC is signed

in Paris by representatives of France, Germany,
Italy, Belgium, the Netherlands, and Luxembourg (the Six).

1952
May 27 The Six sign the Paris treaty establishing the European Defense Community. The
treaty includes an article calling for a supranational political authority to direct the putative
defense organization.
August 10

The ECSC begins operating in Lux-

embourg.
The ECSC Common Assembly
holds its first sitting in Strasbourg.

September 10

The French National Assembly refuses to ratify the European Defense Community treaty.

Oetober 23

The 1948 Brusse1s treaty is amended

to establish the Western European Union and facilitate German membership in NATO.

1955
May 5

Germany joins NATO.

June 1-2 At the Messina conference, foreign

ministers of the Six ask Belgian foreign minister Paul-Henri Spaak to form a committee and
prepare areport on future options for European
integration.
June 26 The Six convene an IGC in Brussels to
discuss the Messina proposals.

1956
May 29 At a meeting offoreign ministers of the
Six in Venice, Paul-Henri Spaak presents a report proposing that the dual objectives of sectoral (atomic energy) integration and wider
economic integration (a common market) be
realized in separate organizations, with separate treaties.

1957
Mareh 25

Treaties establishing the European

Econonllc Community (EEC) and the European
Atomic Energy Community (EURATOM) are
signed at the capitol in Rome.

505

506

Chronology

1958
january 7 The EEC and EURAlDM are launched.
january 7 Walter Hallstein becomes the first
president of the EEC Commission.
july 3-7 7 A conference in Stresa lays the foundations for the Common Agricultural Policy
(CAP).

1959
january 7 First steps are taken in the progressive elimination of customs duties and quotas
in the EC.

1960
December 79-20 The Council of Ministers approves the basic principles governing the CAP.

1961
ju/y/August Ire1and (July 31), Britain (August
9), and Denmark (August 10) apply to join the
EC.
November 2 The French government submits a
draft treaty (known as the Fouchet Plan) establishing a political union of the Six.

1962
january 7 The Community begins the second
stage in the establishment of a common market.
April 77 The Fouchet Plan collapses at a meeting of foreign ministers, primarily over disagreement about Britain's role.
April30 Norway applies for membership in the
Community.
May 75 The Six decide a second time to speed
up establishment of the common market.

1963
january 74 At a press conference, French president Charles de Gaulle effectively vetoes
British membership by dec1aring that the UK is
not ready to join the EC.
january 22 France and Germany sign a Treaty
of Friendship and Reconciliation in Paris (the
Elysee Treaty).

january 29 Accession negotiations with Britain

end at the insistence of the French government;
negotiations with the other applicant countries
are also suspended.
july 20 Association convention between the EC
and seventeen African states and Madagascar
is signed in Yaounde, Cameroon.

1964
june 7 Yaounde convention enters into force.

1965
April 8 The Six sign the merger treaty, fusing
the executives of the EEC, the ECSC, and
EURATOM, thereby establishing a single
Council and a single Commission of the European Communities.
july 7 Beginning of the so-called Empty Chair
Crisis.

1966
january 7 The EEC enters the third and final
stage of the common market transitional period.
january 28-29 Resuming its special meeting
in Luxembourg, the Council agrees on the Luxembourg Compromise, ending the Empty
Chair Crisis.

1967
May The governments of Britain (May 10), Ireland (May 11), and Denmark (May 11) submit
new applications to join the Communities.
july 7 The merger treaty enters into force.
july 6 The new joint Commission of the European Communities takes office, with Jean Rey
as president.
july 25 Norway makes a second application to
join the EC.
November 27 French president Charles de
Gaulle again vetoes Britain's membership application by restating that the UK is not ready
to join the EC.

Chronology
Deeember 19 The Council fails to reach agreement on new negotiations with the applicant
countries.

1968

july 1 The customs union is completed eighteen

months ahead of the schedule prescribed by the
Treaty of Rome: customs duties between member states are removed, and the common customs tariff replaces national customs duties in
trade with the rest of the world.

1969
july 23 Following French president Charles de
Gaulle's resignation in April 1969, the Council
resumes exarnination of the membership applications from Britain, Ireland, Denmark, and
Norway.

Deeember 1-2 A summit of the heads of state

and government in The Hague agrees to relaunch the EC.
Deeember 31 The twelve-year transitional period provided for in the Rome treaty for the establishment of the common market ends.

507

1972

january 22 Treaty and re1ated documents concerning the accession to the EC of Britain,
Denmark, Ireland, and Norway are signed in
Brussels.

Mareh 21

Introduction of the currency "snake."

September 25 In a referendum in Norway on

EC membership, a majority votes against; the
Norwegian government asks the Community
for a free trade agreement instead of accession.
Getober 19-21 The heads of state and government of the enlarged EC hold a conference in
Paris (the Paris summit).

1973
january 1
the EC.

Britain, Denmark, and Ireland join

july 3-7 The Conference on Security and Cooperation in Europe (CSCE) opens in Helsinki.

june 30 Negotiations with the four applicant

countries formally open in Luxembourg.

Getober 6-21 Following the Yom Kippur War,

Arab oil-producing countries announce that oil
exports to certain Western countries will be cut
or stopped. The Grganization of Petroleum Exporting Countries (GPEC) decides to raise oil
prices substantially.

july 2 A new Commission, composed of nine

members and presided over by Franco Malfatti,
takes office.

Deeember 14-15 The heads of state and govemment of the member states confer in Copenhagen (the Copenhagen summit).

Getober 7-8 A committee chaired by Luxembourg prime minister Pierre Werner presents a
report (the Werner Plan) on Economic and
Monetary Union (EMU).

April 1 The new Labour government in Britain

asks for a renegotiation of Britain's membership terms.

1970

Getober 27 Foreign ministers ofthe Six, meeting in Luxembourg, adopt the Davignon Report on European Political Cooperation
(EPC).
November 19 First meeting of foreign ministers
in EPC.

1971
january 1 The second Yaounde convention and
Arusha agreement enter into force.

1974

july 31

The Euro-Arab Dialogue opens in Paris.

September 14 At the invitation of French president Valery Giscard d'Estaing, the heads of
state and govemment and the president of the
Commission meet for informal talks at the
Elysee and decide to launch the European
Council.
Deeember 9-10 The heads of state and government hold a summit in Paris.

508

Chronology

1975

1979

March 70-7 7

May 28

june 5

june 7-70

The European Council holds its

inaugural meeting in Dublin and conc1udes the
renegotiation of Britain's membership terms.
In a constitutionally unprecedented
British referendum, a large majority votes in
favor of remaining in the Community.

The treaty and related documents conceming Greece's accession to the EC are
signed in Athens.
First direct elections to the European
Parliament.

Gctober 37
june 72

Greece applies to join the EC.

july 22

A treaty strengthening the budgetary

powers of the European Parliament and setting
up a Court of Auditors is signed in Brussels.

August 7 In Helsinki, the Final Act of the CSCE

is signed by the thirty-five participating states.

December 29

Belgian prime minister Leo Tindemans submits his report on European Union.

November 29

At the Dublin European Couneil, the new British govemment asks for resolution of the British budgetary question, thus
provoking a five-year-Iong crisis in the Community.

1980
Getober 7

1976
April 7

A convention between the EC and fortysix African, Caribbean, and Pacific (ACP)
states, signed in Lome on February 28, 1975,
enters into force.

1977
March 28

Portugal applies for EC membership.

July 7

A customs union is achieved in the enlarged Community.

july 28

The second ACP-EC convention

goveming cooperation between the EC and
fifty-eight African, Caribbean, and Pacific
countries is signed in Lome.

Spain applies for EC membership.

1978

july 6-7

At the Bremen summit, the European

Council approves a Franco-German plan to
set up a European Monetary System (EMS).

December 4-5

The European Council, meeting

in Brussels, agrees to set up the EMS based on
a European currency unit (ECU). The EMS
comprises an exchange and intervention mechanism, credit mechanisms, and a mechanism
for the transfer of resources to less prosperous
Community countries. Eight member states deeide to participate fully in the EMS. Britain
opts to remain outside the exchange rate mechanism (ERM) of the EMS.

A cooperation agreement between

the EC and the Association of Southeast Asian
Nations (ASEAN) comes into operation.

1981
january 7 Greece becomes the tenth member of

the Community. The second ACP-EC convention, signed in Lome on October 31, 1979,
comes into operation.
On the initiative of Altiero Spinelli, the
European Parliament decides to set up an institutional affairs comrnittee to draft amendments
to the existing treaties.

July 7-9

November 6 and 72

The German and Italian

govemments submit to the other member
states, to the European Parliament, and to the
Comrnission a Draft European Act (the Genscher-Colombo proposals).

1982
The presidents ofParliament, the Couneil, and the Comrnission sign a joint dec1aration on improving the budgetary procedure.

june 30

1983
january 25

After six years of negotiations,

agreement is reached on a common fisheries
policy.

Chronology
June 17-19 At the European Council in
Stuttgart, the heads of state and government sign
the Solemn Declaration on European Union.
December 4-6 The European Council fails to
issue a communique at its meeting in Athens.

1984
February 14 By a large majority, the European
Parliament adopts the Draft Treaty Establishing the European Union, prepared by its Committee on Institutional Affairs.
February 28 The Council adopts adecision that
sets out a European Strategie Program for Research and Development in Infonnation Technology (ESPRIT).
June 14-17 Second direct elections to the European Parliament.
June 25-26 At the Fontainebleau summit, the
heads of state and government resolve the
British budgetary question and agree to refonn
the CAP. They also decide to set up an ad hoc
committee on institutional affairs, chaired by
former lrish foreign minister Jim Dooge, to
consider amending the Treaty of Rome (the
Dooge Committee).
December 8 The third ACP-EC Convention on
cooperation between the Community and
sixty-five African, Caribbean, and Pacific
countries is signed in Lome.

1985
February 1 Greenland leaves the Community
but remains associated with it as an overseas
territory.
March 9 The Dooge Committee recommends
that the member states convene an IGC to negotiate refonn of the Treaty of Rome.
June 12 Instruments of accession of Spain and
Portugal are signed.
June 14 The Commission publishes its white
paper on completing the internal market. The
document details the measures necessary to re-

509

move all physical, technical, and fiscal barriers

between the member states by the end of 1992.
June 28-29 The European Council, meeting in
Milan, decides to convene an IGC to draft revisions to the Treaty of Rome.
December 2-3 Based on the work of the IGC,
the European Council, meeting in Luxembourg, agrees on refonn of the Community's
institutions designed to improve their efficiency, extend the Community's competence,
and provide a legal framework for cooperation
on foreign policy.
December 16 EC foreign ministers encapsulate
the proposed refonns in the Single European
Act (SEA).

1986
January 1 Spain and Portugal join the Ee.
January 17-18 Foreign ministers sign the SEA.
May 1 The third ACP-EC convention comes
into operation.
September 15-20 In Punta de1 Este, Uruguay,
ministers of ninety-two countries agree to a
new round of multilateral trade negotiations
under the GATT.

1987
February 15 In a communication entitled The
Single Act: A New Frontier for Europe, the
Commission sets out the conditions for attaining the objectives of the SEA, including proposals to complete agricultural reform and
double the "structural funds" to promote cohesion in the EC (known as the Delors I budgetary package).
April 14

Turkey applies for EC membership.

May 26 A referendum in Ireland approves a

constitutional amendment that clears the way
for ratification of the SEA.
July 1 The SEA enters into force.

51 0

Chronology

September 12 At an informal meeting in Nyborg, Denmark, EC finance ministers adopt

measures to strengthen the EMS.

1988
February 11-13 The European Council, meeting in Brussels, ends nearly a year of budgetary wrangling and approves the Delors I
package.
June 27-28 The European Council, meeting in
Hanover, reappoints Jacques Delors as Commission president and appoints a committee, to
be chaired by Delors, to look into and propose
specific steps that would lead to EMU.
September 20 In a speech at the College of Europe in Bruges, British prime minister Margaret Thatcher sharply criticizes the accelerating pace of European integration, attacks the
Brussels bureaucracy, and condernns moves toward EMU.
December 8 Representatives of the governments of the member states appoint a new
Commission.

1989
April 12 The Delors Committee presents its report on EMU (the Delors Plan).
June 15-18 Third direct elections to the European Parliament.
June 26-27 The European Council, meeting in
Madrid, unanimously adopts the Delors Plan.
July 14-16 At the G7 summit in Paris, U.S.
president George Bush asks the Commission to
coordinate Western economic assistance for
Hungary and Poland.

ments to the Treaty of Rome for irnplementation

of EMU. The council also adopts the Charter of
Fundamental Social Rights for Workers (the Social Charter) and reaffirms the Community's international role, especially in relation to developments in Central and Eastem Europe.

December 15 The fourth ACP-EC convention is

signed in Lome by the Community, its member
states, and the African, Caribbean, and Pacific
countries.
December 1 9 Representatives of the Community and the European Free Trade Association
(EFfA) agree to start formal negotiations to
conclude a general agreement on closer cooperation between both organizations.

1990
February 8 The Commission sets up an emergency committee to deal with imminent German unification and the absorption of East
Germany into the EC.
February 27 The Uni ted States and the EC
agree to formalize relations by holding regular
meetings between both sides' presidents.
April 19 In a letter to Irish prime minister and European Council president Charles Haughey,
French president Franc;ois Mitterrand and German chancellor Helmut Kohllaunch an initiative
to achieve political union and EMU by 1993.
April 28 The European Council, meeting in a
special summit in Dublin, instructs EC foreign
ministers to produce proposals on European
Political Union (EPU) for the next European
Council in June.

July 17 Austria applies for EC membership.

May 29 The charter for the European Bank of

Reconstruction and Development is signed in
Paris.

November 1 9 An extraordinary European

Council in Paris discusses events in Central
and Eastern Europe, including prospects for
German unification.

June 19 The Schengen Agreement, which calls

for the eventual removal of border controls between the signatory states, is signed by the
Benelux countries, Germany, and France.

December 8-9 At a European Council meeting

in Strasbourg, the heads of state and government
call for an IGC to draw up the necessary amend-

June 25-26 The European Council, meeting in

Dublin, agrees to convene an IGC on EPU to
parallel the planned IGC on EMU.

Chronology
july 4
july 76

Cyprus applies for EC membership.

511

Oetober 27

The Council agrees on the establishment of a European Economic Area (EEA).

Malta applies for EC membership.

The European Council, meeting in Maastricht, settles on a draft Treaty on
European Union-TEU (the Maastricht
Treaty).

Deeember 9-70
Oetober 3

Germany unifies. Britain joins the

exchange rate mechanism of the EMS.

Oetober 27-28

At a special European Council

in Rome, member states (except Britain) commit themselves to launch the second stage of
EMU on January 1, 1994.

At a special summit in Paris,

the thirty-four members of the CSCE sign the
Charter of Paris for a New Europe.

November 79-27

The U.S.-EC Transatlantic Declaration is signed in Washington, D.C.

November 20

74-75 The European Council,

meeting in Rome, formally launches the IGCs
on EPU and EMU.

Deeember

Foreign ministers from the EC

and the Rio Group of Latin American countries
sign the Declaration of Rome to develop closer
economic and politicallinks.

Deeember 20

1991
Mareh 73

The Commission adopts a Community support framework for structural assistance to the five new German states and eastem
Berlin.

April 75

The European Bank for Reconstruction

and Development begins operating in London.

june 28-29

The European Council, meeting in

Luxembourg, approves the draft treaty prepared by the Luxembourg presidency.

july 7 Sweden applies for EC membership.

September 7

The EC-sponsored peace conference on Yugoslavia opens in The Hague.

Black Monday: at a decisive foreign ministers' meeting, ten ofthe EC's twelve
member states reject an ambitious draft treaty
on political union, prepared by the Dutch presidency.

September 30

Deeember 76

The EC signs Europe Agreements

with Poland, Hungary, and Czechoslovakia.

1992
january 75

The EC recognizes the independence of Slovenia and Croatia.

February 7

Representatives of the EC member

states sign the TEU in Maastricht.

In a communication entitled Frorn

the Single Act to Maastricht and Beyond: The
Means to Match Dur Arnbitions, the Commission introduces a new five-year budget package
(Delors Il).

February 72

Mareh 78

Finland applies for EU membership.

May 2

The EC and the EFTA member states

sign a treaty establishing the EEA.

May 27

Agriculture ministers agree to reform

the CAP by moving away from price supports
toward more direct farm subsidies; cereal
prices are cut immediately.

May 26

Switzerland applies for EU member-

ship
june 2

In a referendum, the Danish electorate

rejects the TEU by a margin of less than 2
percent, throwing the treaty's future into
doubt.

june 27-28

At the European Council meeting

in Lisbon, the heads of state and govemment
reappoint Commission president Jacques Delors to an unprecedented fifth two-year term
but fail to reach agreement on the Delors 11
budgetary package.

September 76

Black Wednesday: facing one of

its worst financial crises since World War 11,
Britain responds to sterling's plummeting

512

Chrono/ogy

mitted to the EU as soon as they satisfy the requisite political, economic, and administrative
criteria.

value on the world markets by suspending its

participation in the ERM of the EMS, a move
that precipitates a major currency crisis among
the EC member states. Italy withdraws the lira
from the ERM the same day.

August 2

In a national referendum, French

voters approve the TEU by a slim majority
(51.05 percent).

October 12

September 20

Oetober 16

An extraordinary meeting of the

European Council in Birmingham, England, to
discuss the TEU ratification crisis and the recent EMS crisis is overshadowed by domestic
political events in the UK.

November 25

Following a renewed currency crisis,

finance ministers agree to widen the ERM currency bands to 15 percent.
The German constitutional court
rules that the TEU is compatible with the German constitution, thereby paving the way for
the treaty's implementation.

November 1

The TEU enters into force, and the

EU comes into being.

Norway applies for EU member-

December 5

In a referendum, a maJonty in
Switzerland rejects ratification of the EEA
agreement, thereby effectively shelving Switzerland's EC membership application.

December 15

ship.
December 6

December 11-12

Hoping to sway public opinion in Denmark and facilitate a second referendum there on the TEU, the European Council,
meeting in Edinburgh, agrees to a number of
Danish opt outs from the treaty.

The Commission publishes its

white paper on growth, competitiveness, and
employment.
Agreement is reached in Geneva
to conc1ude the Uruguay Round of the GATT.

1994
january 1

Stage Two of EMU begins, and the

European Monetary Institute is established.
The agreement establishing the EEA enters
into force.
The Committee of the Regions
holds its inaugural session in Brussels.

March 9-10

1993

january 1

The single market program is (almost) completed.

February 1 Accession negotiations with Austria,

Finland, and Sweden open in Brussels. A Europe Agreement and interim agreement are
signed with Romania.

March 29

At an informal meeting on the Greek

island of Ioannina, foreign ministers reach a
compromise on rules for qualified majority
voting, thereby opening the way for enlargement.
Accession negotiations with Austria,
Finland, Sweden, and Norway end in Brussels.

March 8

March 30

April 5

March 31

A Europe Agreement and interim

agreement are signed with Bulgaria.
Accession negotiations with Norway
open in Luxembourg.

May 18

In a second referendum, Danish voters

approve the TEU.

june 21-22

Meeting in Copenhagen, the European Council announces that associated countries in Central and Eastem Europe will be ad-

April 5

Hungary applies for EU membership.

Poland applies for EU membership.

April 15

The final act of the Uruguay Round of

the GATT is signed in Marrakech, Morocco.

May 25

The European Investment Fund is established.

Chronology
May 26-27 The inaugural conference for the
European Stability Pact (Balladur Plan) takes
place in Paris.
June 9-12 Fourth direct elections to the European Parliarnent.
June 12 In a referendum, a majority of Austrians approves EU membership.
June 24-25 The European Council meets in
Corfu and signs accession agreements with
Austria, Finland, Sweden, and Norway.
July 15 At an extraordinary meeting of the European Council in Brussels, Luxembourg's prime
minister Jacques Santer is nominated to replace
Jacques De10rs as Commission president.
July 21 Using its newly acquired authority to approve the European Council's nominee for
Commission president, the European Parliament narrowly endorses Jacques Santer.
Oetober 16 In a referendum, a majority in Finland approves EU membership.
November 13 In a referendum, a majority in
Sweden approves EU membership.
November 28 In a referendum, a small majority
in Norway rejects EU membership.
Deeember 9-10 Meeting in Essen, the European Council agrees on a strategy to bring the
Central and Eastern European states closer to
the EU and reiterates its determination to conclude a Euro-Mediterranean partnership.

51 3

January 12-16 Exceeding its newly acquired

authority to approve the new Commission, the
European Parliarnent holds confinnation hearings for individual commissioners.
January 18 The European Parliarnent approves
the new Commission.
January 23 The Santer Commission begins its
five-year term.
February 1 The Europe Agreements with Romania, Bulgaria, the Czech Republic, and Slovakia enter into force.
February 25-26 The Commission hosts a G7
ministerial conference on the information society in Brussels.
March 21 The European Stability Pact (Balladur Plan) is adopted in Paris.
May 1 0 The Commission publishes a white paper
on integrating the associated countries of Central
and Bastern Europe into the internal market.
June 2-3 The reflection group of foreign ministers' personal representatives, established to
prepare for the 1996-1997 mc, holds its inaugural meeting on the fortieth anniversary of the
Messina conference.
June 12 Europe Agreements are signed with the
three Baltic states (Latvia, Lithuania, and Estonia).
June 15 A Europe Agreement is initialed with
Slovenia.

Deeember 1 7 The European Energy Charter is

signed in Lisbon.

June 22

Deeember 20 The Council concludes Europe

Agreements with Romania, Bulgaria, the
Czech Republic, and Slovakia.

June 26-27 The European Council meets in

Cannes, focusing its attention on EMU and the
fight against unemployment.

1995

Oetober 27 Latvia applies for EU membership.

January 1 Austria, Finland, and Sweden join the

EU. The World Trade Organization comes into
being.

November 28 Estonia applies for EU membership. The Barcelona Declaration is adopted by

Romania applies for EU membership.

514

Chrono/ogy

the EU Fifteen and the so-called Med 12 countries at the end of the Euro-Mediterranean conference.
December 3

U.S. president Clinton, European

Council president GonzaIez, and Commission
president Santer sign the New Transatlantic
Agenda and joint action plan at a summit in
Madrid.

December 5

The reflection group of foreign

ministers' personal representatives, established
to prepare for the 1996-1997 IGe, presents its
final report.

December 12

Lithuania applies for EU mem-

bership.

june 10

Slovenia applies for EU membership.

june 21-22

The European Council, meeting in

Florence, resolves the dispute with Britain over
BSE.

The EU and Andean Community sign a

joint declaration on political dialogue.

june 30

October 5

At a special European Council in

Dublin, the heads of state and govemment discuss the IGC and look forward to its conclusion in June 1997.

October 14

Finland joins the ERM of the EMS.

November 25

December 13

December 9-1 3

December 14

December 13-14

After a contentious debate, the

European Parliament gives its assent to the
EU-Turkey customs union.
The Dayton peace plan for the
former Yugoslavia is signed in Paris.

December 15-16

The European Council meets

in Madrid.
December 16

Italy rejoins the ERM of the

EMS.

Bulgaria applies for EU member-

ship.

1996
january 1 7

The Czech Republic applies for EU

membership.

March 1-2

The Euro-Asia summit takes place

in Bangkok.

March 27

In response to the British govemment's announcement earlier in the month of a

possible link between bovine spongiform encephalopathy (BSE), a disease affecting cattle,
and Creutzfeldt-Jakob disease, a human brain
condition, the EU bans exports of beef from
Britain to other EU member states or elsewhere
in the world.
The IGe opens at a special European
Council in Turin but is overshadowed by the
BSE crisis.

First World Trade Organization ministerial conference takes place in Singapore.

The European Council, meeting in Dublin, approves the Irish govemment's
outline draft treaty for the IGe, adopts a declaration on employment, and reaches agreement
on the post-EMU stability and growth pact.

1997

April 9 The office of the European Ombudsman

is officially inaugurated.
May 6

Britain's new Labour govemment announces its intention to sign the social chapter
at the Arnsterdam summit in June, thus signaling a positive approach toward the EU.

May 23

At an extraordinary summit in Noordwijk, the Netherlands, the heads of state and

govemment declare their determination to conc1ude the IGC at the Amsterdam summit in
June.

june 9

At a finance ministers' meeting in Luxembourg, the new French socialist govemment

signals its dissatisfaction with the proposed
Stability and Growth Pact, thereby throwing
the IGe and EMU timetables into doubt.

March 29

june 16-17 The European Council, meeting in

Amsterdam, adopts aresolution stressing the

Chronology

member states' commitment to implementation

of the Stability and Growth Pact and, at French
insistence, adopts a separate resolution on
growth and employment. The European Couneil also concludes the IGC and finalizes the
Amsterdam Treaty.

July 16 The Commission presents Agenda 2000,

a detailed strategy for reforming EU policies,
funding EU activities, and enlarging EU membership early in the twenty-first century.
Agenda 2000 includes the Commission's opinions on the ten Central and Eastern European
countries' membership applications.
Gctober 2 Foreign ministers of the EU's member states sign the Amsterdam Treaty.
November 20-21 The European Couneil holds
a special jobs summit in Luxembourg to help
tackle unemployment in the EU.
December 12-13 The European Council, meeting in Luxembourg, endorses the Commission's
recommendation to begin accession negotiations with Cyprus, the Czech Republic, Estonia,
Hungary, Poland, and Slovenia in March 1998.

51 5

1998
March 12 The inaugural meeting in London of
the European Conference of the heads of state
and government of EU member and applicant
states is marred by Turkey's refusal to participate.
March 16

Greece joins the ERM of the EMS.

March 25 In separate reports mandated by the

TEU, the Commission and the European Monetary Institute recommend eleven member
states for partieipation in stage 3 of EMU.
March 31 Accession negotiations begin in
Brussels with Cyprus, the Czech Republic, Estonia, Hungary, Poland, and Slovenia.
May 2 A special council at the level of the
heads of state and government decides which
member states will participate in stage 3 of
EMU.

June 15-16
Cardiff.

The European Council meets in

APPENDIXES

Appendix 1

Overvlew of Instltutlonal Change, 1958-1998

Number of member states

Number of officiallanguages
Number of commissioners
Number of European Parliamentarians
Number of votes in the Council of Ministers
Threshold for qualified majority voting
Number of judges in the European Court of Justice
Number of judges in the Court of Auditors
Number of representatives in the Economic and Social Committee
Number of representatives in the Committee of the Regions

1958

1973

1981

1986

1995"

6
4
9
142
17
12
6

9
6
13
198
58
41
9

102

144

10
7
14
434
63
45
11
10
156

12
9
17
518
76
54
13
12
189

15
11
20
626
87
62
15
15
222
222

a. Last changes were made in 1995.

517

518

Appendix 2

Appendix 2
Member
State
Austria
Belgium
Denmark
Finland
France
Germany
Greece
Ireland
Italy
Luxembourg
Netherlands
Portugal
Spain
Sweden

National Representatlon In EU Institutions as of 1998

Votes
Councilof
Ministers

5
3
3

Numberof
Commissioners
I

1
1
I

10
10

2
2
1

10

5
3
2
5
5
8

I
I

1
I

Seats in
European
Parliament

Judges in
Court of
Justice

21
25
16
16
87
99
25
15
87
6
31
25
64

UK

4
10

22
87

Total

87

20

626

15

Appendix 3
Appendix 3

519

Member States In International Securlty Organlzatlons

Member State

NATO

WEU

OSCE"

UN Security Council

Austrla
Belgium
Denmark
Finland
France
Germany
Greece
Ireland
Italy
Luxembourg
N etherlands
Portugal
Spain
Sweden
UK

No
Yes (1949)
Yes (1949)
No
Yes (1949)
Yes (1955)
Yes (1949)
No
Yes (1949)
Yes (1949)
Yes (1949)
Yes (1949)
Yes (1982)
No
Yes (1949)

Observer (1995)
Full (1954)
Observer (1995)
Observer (1995)
Full (1954)
Full (1954)
Full (1995)
Observer (1995)
Full (1954)
Full (1954)
Full (1954)
Full (1995)
Full (1986)
Observer (1995)
Full (1954)

Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes

No
No
No
No
Yes
Pending
No
No
No
No
No
No
No
No
Yes

a. The EU's member states were founding members (1975) of the Conference on Security and Cooperation in Europe
(CSCE), forerunner of the Organization for Security and Cooperation in Europe (OSCE).

520

Appendix 4

Appendix 4

Evolution of Commlsslon Dlrectorates-General, 1958-2000

1958

1960s-1970s

DG I External Relations
DG 11 Economic and Financial Affairs
DG III Internal Market
DG IV Competition
DG V Social Affairs
DG VI Agriculture
DG VII Transport
DG VIII Overseas Countries and Territories
DG IX Administration

DG III Industrial Affairs

DG VIII Development Aid

DG IX Personnel and Administration
DG X Information
DG XI External Trade
DG XII General Research and Technology
DG XIII Dissemination of Information
DG XIV Internal Market and Approximation of Legislation
DG XV Joint Research Centers
DG XVI Regional Policy
DG XVII Energy
DG XVIII Credits and Investment
DG XIX Budgets
DG XX Financial Control

Appendix 4

1980s

DG rn Internal Market and Industrial Affairs

521

1990s'
DG I External Econornic Relations
DG IA External Political Relations
DG II Econornic and Social Affairs
DG rn Industry

DG V Employment, Industrial Relations,

and Social Affairs
DG vm Development
DG X Infonnation, Communication, and Culture
DG Xl Environment, Nuclear Safety,
and Civil Protection
DG xn Science, Research, and Education
DG Xli Telecommunications, Infonnation
DG XIV Fisheries
DG XV Financial Institutions and Company Law
DG XVII Energy Policy
DG xvrn Credit and Investments
DG XXI Customs Union and Indirect Taxation
DG xxn Coordination of Structural Policy
DG xxrn Enterprise Policy, Distributive Trades,
Tourism, and Cooperatives
a. See also Table 4, p. 66.

DG X Infonnation, Communication, Culture, and Audiovisual

DG xn Science, Research and Development, Joint Research Centre
DG Xli Telecommunications, Infonnation Market and Exploitation
ofResearch
DG XV Internal Market and Financial Services
DG XVI Regional Policies and Cohesion
DG XVII Energy

DG xxn Education, Training, and Youth

DG xxm Enterprise Policy, Distributive Trades,
Tourism, and Cooperatives
DG XXIV Consumer Policy

522

Appendix 5

Appendix 5

Chronology of EP Party Groups' Development

1953

The original three groups inc1uded Christian Democrats (CD), European Socialists (ESP), and Liberals (L).

1965

The French Gaullists split from the Liberals to form the European Democratic Union (EDU).

1973

The British Conservatives form the basis of the European Conservative Group (ECG). Members of the Irish party,
Fianna F3.il, join the EDU, which changes its name to the European Progressive Democrats (EPD). The Comrnunist Group (C) is formed.

1976

Liberals change their name to the Liberal and Democratic Group (LOG).

1979

The first direct elections are held. CD changes its name to the European People's Party (EPP). ECG changes its
name to the European Democratic Group (EDG). The EDG later join the EPP. The Technical Coordination and
Defense of Independent Groups and Members (TCDIGM) is formed.

1984

The Technical Group of the European Right (ER) is formed by France's National Front and the Italian Socialist
Movement. TCDIGM combines with the Greens and the Leftists to form the Rainbow Group. LDG changes its
name to Liberal, Democratic, and Reformist Group (ELDR) after the Portuguese Social Democrats join the Group.
EPD changes its name to the Group of the European Democratic Alliance (EDA).

1989

Separate Green Group (G) is formed from the Rainbow Group. Left Unity Group (LUG) is formed; reunites communists and leftist allies.

1994

Forza Europa (FE) is formed (Italian-based group). ER changes its name to the European Radical Alliance (ERA).
LUG changes its name to the European United Left (EUL). Europe of Nations (EN) group is formed. Twentyseven nonattached members (NAM).

1995

Forza Europa and the European Democratic Alliance merge to form the Union for Europe Group (UFE).

1996

Europe of Nations group dissolves .

Appendix 6

European Parllament Dlrectorates-General

DGI

Directorate-General for Sessional Services

Directorate A: Parliamentary Acts
Directorate B: Sittings

DGll

Directorate-General for Committees and Delegations

Directorate A: Economic Affairs and Structure
Directorate B: Resources, Programming
Directorate C: Institutions

DGm

Directorate-General for Information and Public Relations

Directorate A: Comrnunication
Directorate B: Information
Directorate C: "Relations with the Citizens"

DGIV

Directorate-General for Research

Directorate A
Directorate B
Directorate C

DGV

Directorate-General for Personnel, the Budget, and Finance

DGVI

Directorate-General for Administration

Directorate A
Directorate B: Interpreting
Directorate C: General Administration (Brussels)

DG VII

Directorate-General for Translation and General Services

Appendix 7
Appendix 7

523

Rota of the Presldency of the Councll of the European Union (Councll of Ministers)

Member State

Semester

Member State

Semester

Belgium
Germany
France
ltaly
Luxembourg
Netherlands
Belgium
Germany
France
ltaly
Luxembourg
N etherlands
Belgium
Germany
France
ltaly
Luxembourg
Netherlands
Belgium
Germany
France
Italy
Luxembourg
Netherlands
Belgium
Germany
France
ltaly
Luxembourg
N etherlands
Belgium
Denmark
Germany
France
Ireland
ltaly
Luxembourg
N etherlands
United Kingdom
Belgium
Denmark
Germany
France

1st 1958
2nd 1958
1st 1959
2nd 1959
1st 1960
2nd 1960
Ist 1961
2nd 1961
1st 1962
2nd 1962
Ist 1963
2nd 1963
1st 1964
2nd 1964
1st 1965
2nd 1965
1st 1966
2nd 1966
1st 1967
2nd 1967
1st 1968
2nd 1968
1st 1969
2nd 1969
1st 1970
2nd 1970
1st 1971
2nd 1971
1st 1972
2nd 1972
1st 1973
2nd 1973
1st 1974
2nd 1974
1st 1975
2nd 1975
1st 1976
2nd 1976
1st 1977
2nd 1977
1st 1978
2nd 1978
1st 1979

Ireland
ltaly
Luxembourg
N etherlands
United Kingdom
Belgium
Denmark
Germany
Greece
France
Ireland
ltaly
Luxembourg
Netherlands
United Kingdom
Belgium
Denmark
Germany
Greece
Spain
France
Ireland
Italy
Luxembourg
Netherlands
Portugal
United Kingdom
Denmark
Belgium
Greece
Germany
France
Spain
ltaly
Ireland
Netherlands
Luxembourg
United Kingdom
Austria
Germany
Finland
Portugal
France
Sweden

2nd 1979
1st 1980
2nd 1980
1st 1981
2nd 1981
1st 1982
2nd 1982
Ist 1983
2nd 1983
1st 1984
2nd 1984
1st 1985
2nd 1985
1st 1986
2nd 1986
1st 1987
2nd 1987
Ist 1988
2nd 1988
1st 1989
2nd 1989
1st 1990
2nd 1990
1st 1991
2nd 1991
1st 1992
2nd 1992
1st 1993
2nd 1993
1st 1994
2nd 1994
1st 1995
2nd 1995
1st 1996
2nd 1996
1st 1997
2nd 1997
1st 1998
2nd 1998
1st 1999
2nd 1999
1st 2000
2nd 2000
1st 2001

524

Appendix 8

Appendix 8

Summlts of the Heads of State and Govemment, 1961-1998

Date

Council Presidency

Location

Prime MinisterfPresident

Feb. 10--11, 1961

July 18, 1961
May 29-30, 1967

France
Germany
Belgium

Paris
Bonn
Rome

Char1es De Gaulle
Konrad Adenauer
AldoMoro

Dec. 1-2, 1969

Oct. 19-20,1972
Dec. 14-15, 1973

Netherlands
Netherlands
Denmark

The Hague
Paris
Copenhagen

P.J.S. De Jong
Georges Pompidou
Anker Joergensen

Sep. 16, 1974

Dec. 9-10,1974
Mar. 10--11, 1975

France
France
Ireland

Paris
Paris
Dublin

Valery Giscard d'Estaing

Valery Giscard d'Estaing
Liam Cosgrave

July 16-17, 1975

Dec. 1-2, 1975
Apr. 1-2, 1976

Italy
Italy
Luxembourg

Brussels
Rome
Luxembourg

AldoMoro
AldoMoro
Gaston Thom

July 12-13, 1976

Nov. 29-30,1976
Mar. 25-26, 1977

Netherlands
Netherlands
UK

Brussels
TheHague
Rome

J. M. Den Uyl
J.M. Den Uyl
James Callaghan

June 29-30, 1977

Dec. 5--6, 1977
Apr. 7-8, 1978

UK
Belgium
Denmark

London
Brussels
Copenhagen

James Callaghan
Leo Tindemans
Anker Joergensen

July 6-8, 1978

Dec. 4-5,1978
Mar. 12-13, 1979

Germany
Germany
France

Bremen
Brussels
Paris

Helmut Schmidt
Helmut Schmidt
Valery Giscard d'Estaing

June 21-22,1979
Nov. 29-30, 1979
Apr. 27-28, 1980

France
Ireland
Italy

Strasbourg
Dublin
Luxembourg

Valery Giscard d'Estaing

JackLynch
Francesco Cossiga

June 12-13, 1980

Dec. 1-2, 1980
Mar. 23-24, 1981

Italy
Luxembourg
N etherlands

Venice
Luxembourg
Maastricht

Francesco Cossiga
Pierre Wemer
A.A.M. Van Agt

June 29-30,1981
Nov. 26-27, 1981
Mar. 29-30, 1982

N etherlands
UK
Belgium

Luxembourg
London
Brussels

A.A.M. Van Agt

Margaret Thatcher
Wilfried Martens

June 28-29, 1982

Dec. 3-4, 1982
Mar. 21-22, 1983

Belgium
Denmark
Germany

Brussels
Copenhagen
Brussels

Wilfried Martens
Poul Schluter
Helmut Kohl

June 17-19, 1983

Dec.4--6,1983
Mar. 19-20, 1984

Gerrnany
Greece
France

Stuttgart
Athens
Brussels

Helmut Kohl
Andreas Papandreou
Fran~ois Mitterrand

June 25-26,1984
Dec. 3-4, 1984
Mar. 29-30, 1985

France
Ireland
Italy

Fontainebleau
Dublin
Brussels

Fran~ois

June 28-29, 1985

Dec. 2-3, 1985
June 26-27, 1986

Italy
Luxembourg
Netherlands

Milan
Luxembourg
The Hague

Bettino Craxi
Jacques Santer
R.F.M. Lubbers

Dec. 5--6, 1986

June 29-30, 1987
Dec.4-5, 1987

UK
Belgium
Denmark

London
Brussels
Copenhagen

Margaret Thatcher
Wilfried Martens
Poul Schluter

Feb. 11-13, 1988

June 27-28, 1988
Dec. 2-3, 1988

Germany
Germany
Greece

Brussels
Hanover
Rhodes

Helmut Kohl
Helmut Kohl
Andreas Papandreou

Mitterrand
Garret FitzGerald
Bettino Craxi

Appendix 8

525

Accomplishment/Significance
Discuss de Gaulle's proposals for European political union
Discuss de Gaulle's proposals for European political union
Celebrate tentb anniversary of Rome Treaty
Agree to enlarge and relaunch EC
Agree to achieve European union by 1980
Fail to agree on response to oil crisis
Hold informal get-togetber
Reach breaktbrough on Britain's budgetary contribution; decide to launch tbe European Council
Hold first European Council; agree on new terms for Britain's EC membership
Discuss direct elections to tbe EP
Agree on direct elections to tbe EP
Discuss Tindemans Report
Agree on number and distribution of seats in tbe directly elected EP
Attack Japan's trade policy
Set up Trevi group for police cooperation
Restructure European Council meetings
DiscussEMU
Agree on new dates for direct elections to tbe EP
Approve Franco-German plan for EMS
Agree on operational details of EMS
Agree to launch EMS on March 13, 1979
Discuss energy policy and economic convergence
Begin British budget dispute; consider report of Three Wise Men
Continue British budget dispute
Discuss international tension (Middle East and Afghanistan)
Discuss international tension (Middle East and Poland)
Discuss economic and social situation
Discuss economic and social situation and U.S.-EC relations
Discuss Mediterranean enlargement
Celebrate twenty-fiftb anniversary of Rome treaty
Oppose U.S. embargo on Soviet gas pipeline equipment
Discuss development of internal market
Make progress on Mediterranean enlargement
Sign Solemn Declaration on European Union
Fail to issue communique
Fail to resolve British budget dispute
Resolve British budget dispute
Achieve breakthrough in Mediterranean enlargement
Agree on Integrated Mediterranean Programs
Decide to hold IGC
Conclude IGC
Agree to cooperate on illegal drug interdiction
Call for completion of tbe single market
Discuss Delors I budget package
Fail to approve tbe Delors I budget package
Approve tbe Delors I budget package
Appoint Jacques Delors to chair committee on EMU
Call for transport infrastructure
(continues)

526

Appendix 8

Appendix 8
Date

(contlnued)
Couneil Presideney

Location

Prime MinisterlPresident

June 26-27, 1989

Nov. 19, 1989
Dec. 8-9, 1989

Spain
Franee
Franee

Madrid
Paris
Strasbourg

Felipe Gonzalez
Franc;:ois Mitterrand
Franc;:ois Mitterrand

Apr. 28, 1990

June 25-26, 1990
Oe!. 27-28, 1990

Ireland
Ireland
Italy

Dublin
Dublin
Rome

Charles Haughey
Charles Haughey
Giulio Andreotti

Dec. 13-15, 1990

Apr. 8, 1991
June 28-29,1991

Italy
Luxembourg
Luxembourg

Rome
Luxembourg
Luxembourg

Giulio Andreotti
Jaeques Santer
Jaeques Santer

Dee. 9-10, 1991

June 26-27, 1992
Oet. 16, 1992

Netherlands
Portugal
UK

Maastrieht
Lisbon
Birmingham

R.F.M. Lubbers
Anibal Cavaco Silva
John Major

Dec. 11-12, 1992

June 21-22,1993
Oe!. 29,1993

UK
Denmark
Belgium

Edinburgh
Copenhagen
Brussels

John Major
Poul Nyrup Rasmussen
Jean-Lue Dehaene

Dec. 10--11, 1993

June 24-25, 1994
July 15, 1994

Belgium
Greeee
Germany

Brussels
Corfu
Brussels

Jean-Lue Dehaene
Theodoros Pangalos
Helmut Kohl

Dec. 9-10,1994
June 26-27, 1995
Dec. 15-16, 1995

Germany
Franee
Spain

Essen
Cannes
Madrid

Helmut Kohl
Jaeques Chirae
Felipe Gonzalez

Mar. 29,1996
June 21-22, 1996
Oe!. 5, 1996

Italy
ltaly
Ireland

Thrin
Florenee
Dublin

Romano Prodi
Romano Prodi
John Bruton

Dec. 13-14, 1996

May 23,1997
June 16-17, 1997

Ireland
Netherlands
Netherlands

Dublin
Noordwijk
Amsterdam

John Bruton
WimKok
W1ll1Kok

Nov. 20--21, 1997

Dec. 12-13, 1997

Luxembourg
Luxembourg

Luxembourg
Luxembourg

Jean-Claude Juneker
Jean-Claude Juneker

a. Summits generally take plaee in the eountry holding the Couneil presideney, although occasionally they are held in another member state. "Prime MinisterlPresident" refers to the head of state for the location of the summit, whieh is not always the same as the Couneil presideney.

Appendix 8

Accomplishment/Significance
Adopt Delors Report on EMU
Discuss implications of revolution in Central and Eastem Europe
Decide to hold an IGC on EMU
Discuss possibility of German unification
Decide to hold an IGC on EPD
Discuss forthcoming IGCs
LaunchIGCs
Discuss implications of Gulf War
Negotiate IGCs
ConcJude IGCs
Fail to agree on Delors n budget package
Discuss TED ratification crisis
Agree to Danish opt outs from TED
Agree in principle to eastem enlargement
Discuss implementation of TED
Discuss white paper on growth and employment
Sign accession agreements with Austria, Finland, Norway, Sweden
Nominate Jacques Santer as Comrnission president
Agree to strategy for eastem enlargement
Discuss criteria for eastem enlargement
Discuss New Transatlantic Agenda
Launch IGC
Resolve BSE crisis
Confirm IGC timetabJe
Discuss outline draft treaty; agree on EMU stability pact
Agree to concJude IGC at Amsterdam sumrnit
ConcJude IGC (finalize Amsterdam Treaty)
Special jobs sumrnit
Set enlargement schedule; discuss EMU

527

528

Appendix 9

Appendix 9

Dlrectorates-General of the Councll of the European Union (Councll of Ministers)

Directorate-General A
Directorate-General B
Directorate-General C
Directorate-General D
Directorate-General E
Directorate-General F
Directorate-General G

Appendix 10

Personnel and Administration; Protocol, Organization, Security, and Infrastructures; Translation

and Document Production
Agriculture-Fisheries
Internal Market: Customs Union; Industrial Policy, Approximation of Laws; Right of Establishment and Freedom to Provide Services; Company Law; Intellectual Property
Research; Energy; Transport; Environment; Consumer Protection
External Economic Relations; Common Foreign and Security Policy
Relations with the European Parliament and the ESC; Institutional Affairs; Budget and Staff
Regulations
Economic, Monetary, and Social Affairs

Special Commlttees of the Councll of the European Union (Councll of Ministers)

Comrnittee ofPermanent Representatives (COREPER)

Article 113 Comrnittee
Special Comrnittee on Agriculture
Standing Comrnittee on Employment
Budget Comrnittee
Scientific and Technical Research Comrnittee (CREST)
Education Comrnittee
Comrnittee on Cultural Affairs
Select Comrnittee on Cooperation Agreements Between Member States and Third Countries
Energy Comrnittee
Standing Comrnittee on Uranium Enrichment

Appendix 77
Appendix 11

529

Renumbered ArtleIes, ntles, .nd Sectlons 01 the Tre.ty on the Europe.n Union

Previous Numbering

New Numbering

Previous Numbering

New Numbering

Title I
Article A
ArticleB
Article C
Artic1eD
Artic1e E
Artic1e F
Artic1e F.I *

Title I
Article I
Artic1e 2
Artic1e 3
Artic1e 4
Artic1e 5
Article 6
Artic1e 7

Title II
Artic1e G

Title II
Artic1e 8

Title III
Article H

Title III
Artic1e 9

Title VIt
Article K.I
Artic1eK.2
Artic1eK.3
Artic1eK.4
Artic1eK.5
Artic1e K.6
Artic1e K.7
Artic1e K.8
Artic1e K.9
Artic1e K.1O
Article K.ll
Artic1e K.12
Artic1e K.13
Artic1e K.l4

Title VI
Article 29
Artic1e 30
Artic1e 31
Artic1e 32
Artic1e 33
Artic1e 34
Artic1e 35
Artic1e 36
Artic1e 37
Artic1e 38
Article 39
Artic1e 40
Artic1e 41
Artic1e 42

Title IV
Artic1e I

Title IV
Artic1elO

Title Vf
Artic1e J.l
Artic1e J.2
Artic1e 1.3
Artic1e J.4
Artic1e J.5
Artic1e J.6
Artic1e 1.7
Artic1e J.8
Artic1e J.9
Artic1e J.lO
Artic1e J.ll
Artic1e J.12
Artic1e J.13
Artic1e J.14
Artic1e J.15
Artic1e J.16
Artic1e J.l 7
Artic1e J .18

Title V
Artic1e II
Artic1e 12
Artic1e 13
Article 14
Artic1e 15
Artic1e 16
Artic1e17
Artic1e18
Artic1e19
Artic1e 20
Artic1e 21
Artic1e 22
Artic1e 23
Artic1e 24
Artic1e 25
Artic1e 26
Artic1e 27
Artic1e 28

Title VIa:/:
Article K.15*
Artic1e K.16*
Artic1e K.17*

Title VII
Article 43
Article 44
Artic1e 45

Title VII
Artic1e L
Artic1eM
Artic1eN
Artic1e 0
Artic1e P
Article Q
Artic1e R
Artic1e S

Title VIlI
Artic1e 46
Artic1e 47
Artic1e 48
Article 49
Artic1e 50
Artic1e 51
Artic1e 52
Article 53

Source: Conference of the Representatives of the Governments of the Member States, Treaty of Amsterdam.
*New Treaty of Amsterdam article
tTitle amended by the Treaty of Amsterdam
tNew Treaty of Amsterdam title

530

Appendix 12

Appendix 12

Renumbered ArtleIes, ntles, and Sedlons of the Treaty Establlshlng the

European Communlty

Previous
Numbering

New
Numbering

Previous
Numbering

New
Numbering

Previous
Numbering

New
Numbering

Part One
Article 1
Article 2
Article 3
Article 3a
Article 3b
Article 3c*
Article 4
Article 4a
Article 4b
Article 5
Article 5a*
Article 6
Article 6a*
Article 7 (repealed)
Article 7a
Article 7b (repealed)
Article 7c
Article 7d*

PartOne
Article 1
Article 2
Article 3
Article 4
Article 5
Article 6
Article 7
Article 8
Article 9
ArticlelO
Article 11
Article 12
Article13

Article 37

Article 31

Title II
Article 38
Article 39
Article 40
Article 41
Article 42
Article 43
Article 44 (repealed)
Article 45 (repealed)
Article 46
Article 47 (repealed)

Title II
Article 32
Article 33
Article 34
Article 35
Article 36
Article 37

Article 731*
Article 73m*
Article 73n*
Article 730*
Article 73p*
Article 73q*

Article 64
Article 65
Article 66
Article 67
Article 68
Article 69

Title l/I
Chapter 1
Article 48
Article 49
Article 50
Article 51

Title l/I
Chapter 1
Article 39
Article 40
Article 41
Article 42

Title N
Article 74
Article 75
Article 76
Article 77
Article 78
Article 79
Article 80
Article 81
Article 82
Article 83
Article 84

Title V
Article 70
Article 71
Article 72
Article 73
Article 74
Article 75
Article 76
Article 77
Article 78
Article 79
Article 80

PartTwo
Article 8
Article 8a
Article 8b
Article 8c
Article 8d
Article 8e

PartTwo
Article 17
Article 18
Article 19
Article 20
Article 21
Article 22

Chapter 2
Article 43

Part Three
Title 1
Article 9
Article 10
Article 11 (repealed)

Part Three
Title I
Article 23
Article 24

Chapter 2
Article 52
Article 53 (repealed)
Article 54
Article 55
Article 56
Article 57
Article 58

Title V
Chapter 1
Seetion 1
Article 85
Article 86
Article 87
Article 88
Article 89
Article 90

Title VI
Chapter 1
Section 1
Article 81
Article 82
Article 83
Article 84
Article 85
Article 86

Chapter 1
Section 1 (deleted)
Artic1e 12
Artic1e 13 (repealed)
Artic1e 14 (repealed)
Article 15 (repealed)
Artic1e 16 (repealed)
Article 17 (repealed)

Chapter 1

Section 2 (deleted)
Article 18 (repealed)
Article 19 (repealed)
Article 20 (repealed)
Artic1e 21 (repealed)
Article 22 (repealed)
Article 24 (repealed)
Article 25 (repealed)
Artic1e 26 (repealed)
Article 27 (repealed)
Artic\e 28
Article 29

Article 14
Article 15
Article 16

Artic1e 25

Article 26
Artic\e 27

Chapter 2
Chapter 2
Article 28
Article 30
Article 31-33 (repealed)Article 29
Artic\e 34
Article 35 (repealed)
Article 36
Article 30

Article 38

Article 44
Article 45
Article 46
Article 47
Article 48

Chapter3
Artic1e 59
Article 60
Article 61
Article 62 (repealed)
Article 63
Article 64
Article 65
Article 66

Chapter3
Article 49
Article 50
Article 51

Chapter4
Artic1e 67 (repealed)
Artic1e 68 (repealed)
Article 69 (repealed)
Article 70 (repealed)
Article 71 (repealed)
Article 72 (repealed)
Article 73 (repealed)
Artic1e 73a (repealed)
Article 73b
Article 73c
Article 73d
Artic\e 73e (repealed)
Artic\e 73f
Artic\e 73g
Artic\e 73h (repealed)

Chapter4

Title l/Iat
Artic\e 73i*
Artic\e 73j*
Artic\e 73k*

Article 52
Article 53
Artic1e 54
Artic1e 55

Article 56
Artic1e 57
Artic1e 58
Article 59
Artic\e 60

Title N
Artic\e 61
Artic\e 62
Artic\e 63

Section 2 (deleted)
Article 91 (repealed)
Section 3
Article 92
Artic1e 93
Artic1e 94

Seetion 2
Article 87
Article 88
Artic1e 89

Chapter2
Article 95
Artic1e 96
Artic1e 97 (repealed)
Article 98
Article 99

Chapter 2
Article 90
Artic1e 91

Chapter3
Article 100
Article l00a
Article l00b (repealed)
Article l00c (repealed)
Artic1e l00d (repealed)
Article 101
Article 102

Chapter3
Article 94
Article 95
Article 96
Artic\e 97

Title VI
Chapter 1
Article 102a
Artic\e 103
Artic\e 103a
Artic\e 104
Article l04a

Title VII
Chapter 1
Article 98
Article 99
Artic\e 100
Article 101
Article 102

Artic1e92
Article 93

Appendix 12

531

Previous
Numbering

New
Numbering

Previous
Numbering

New
Numbering

Previous
Numbering

New
Numbering

Article l04b
Article 104c

Article 103
Article 104

Chapter 2
Article 105
Article 105a
Article 106
Article 107
Article 108
Article 108a
Article 109

Chapter 2
Article 105
Article 106
Article 107
Article 108
Article 109
Article 110
Article 111

Chapter 2
Article 123
ArticJe 124
Article 125

Chapter2
ArticJe 146
Article 147
Article 148

Chapter3
Article 126
ArticJe 127

Chapter3
Article 149
Article 150

Article
ArticJe
ArticJe
Article
Article
Article

Article
ArticJe
Article
Article
Article
Article

Title IX
Article 128

Title XII
Article 151

Chapter3
Article 100a
Article 100b
Article 100c
Article 100d

Chapter3
Article 112
Article 113
Article 114
Article 115

Title X
ArticJe 129

Title XIII
Article 152

Title XI
Article 129a

Title XIV
Article 153

Chapter4
Article 100e
Article 100f
ArticJe 100g
Article 100h
Article 100i
Article 100j
Article 100k
Article 1091
Article 109m

Chapter4
Article 116
ArticJe 117
Article 118
Article 119
Article 120
Article 121
Article 122
Article 123
Article 124

Title XII
Article 129b
Article 129b
Article 129c

Title XV
Article 154
Article 155
Article 156

Title XIII
Article 130

Title XVI
Article 157

Title VIat
Article 100n*
Article 1090*
Article 109p*
ArticJe 100q*
Article 100r*
ArticJe 100s*

Title VIll
Article 125
Article 126
Article 127
Article 128
ArticJe 129
Article 130

Title XIV
ArticJe BOa
Article BOb
Article l30c
Article l30d
Article 130e

Title XVII
Article 158
Article 159
Article 160
Article 161
Article 162

Title XV
ArticJe l30f
Article BOg
ArticJe 130h
ArticJe BOi
Article 130j
ArticJe 130k
Article1301
Article 130m
Article 130n
Article 1300
Article 130p
Article 130q (repealed)

Title XVIll
Article 163
Article 164
Article 165
Article 166
Article 167
ArticJe 168
ArticJe 169
ArticJe 170
Article 171
Article 172
Article 173
-

Title XVI
Article130r
Article 130s
Article 130t

Title XIX
Article 174
Article 175
Article 176

Title XVII
Article 130u
Article 130v
Article 130w
Article BOx
Article 130y

Title XX
Article 177
Article 178
Article 179
Article 180
Article 181

Part Four
Article 131

Part Four
Article 182

Title VII
Title IX
Article 110
Article 131
Article 111 (repealed)
Artic1e 132
Article 112
ArticJe133
Article 113
Article 114 (repealed)
ArticJe 134
Article 115
Article 116 (repealed)
Title VIIat
Article 116*

Title X
Article 135

Title VIll
Chapter I
Article 117
Article 118
Article 118a
Article 118b
Article 1I8c
Article 119
Article 119a
Article 120
Article 121
Article 122

Title XI
Chapter I
Article 136
Article 137
Article 138
Article 139
Article 140
Article 141
Article 142
Article 143
Article 144
Article 145

132
133
134
135
136
136a

183
184
185
186
187
188

Part Five
Title I
Chapter I
Section I
Article 137
ArticJe 138
Article 138a
Article 138b
Article 138c
Article 138d
Article 138e
Article 139
Article 140
ArticJe 141
Article 142
Article 143
Article 144

Part Five
Title I
Chapter I
Seetion I
Article 189
Article 190
Article 191
ArticJe 192
Article 193
Article 194
Article 195
Article 196
ArticJe 197
Article 198
Article 199
Article 200
Article 201

Seetion 2
ArticJe 145
ArticJe 146
Article 147
Article 148
Article 149 (repealed)
Article 150
Article 151
Article 152
Article 153
Article 154

Section 2
Article 202
ArticJe 203
Article 204
Article 205

Section 3
Article 155
Article 156
Article 157
Article 158
Article 159
Article 160
Article 161
Article 162
Article 163

Seetion 3
Article 211
Article 212
ArticJe 213
Article 214
Article 215
Article 216
Article 217
Article 218
Article 219

Section 4
Article 164
Article 165
Article 166
Article 167
Article 168
Article 168a
Article 169
Article 170
Article 171
Article 172
Article 173
Article 174

Seetion 4
Article 220
Article 221
Article 222
Article 223
Article 224
Article 225
Article 226
Article 227
Article 228
Article 229
Article 230
Article 231
(continues)

ArticJe 206
Article 207
Article 208
ArticJe 209
Article 210

532

Appendix 72

Appendix 12

(contlnued)

Previous
Numbering

New
Numbering

Previous
Numbering

New
Numbering

Article
Article
Article
Article
Article
Article
Article
Article
Article
Article
Article
Article
Article
Article

Article 232
Article 233
Article 234
Article 235
Article 236
Article 237
Article 238
Article 239
Article 240
Article 241
Article 242
Article 243
Article 244
Article 245

Article 205a
Article 206
Article 206a (repealed)
Article 207
Article 208
Article 209
Article 209a

Article 275
Article 276

Part Six
Article 210
Article 211
Article 212
Article 213
Article 213a*
Article 213b*
Article 214
Article 215
Artieie 216
Article 217
Article 218
Article 219
Article 220
Article 221
Article 222
Article 223
Article 224
Article 225
Article 226 (repealed)
Article 227
Article 228
Article 228a
Article 229
Article 230
Article 231
Artiele 232
Article 233
Artiele 234
Article 235
Article 236
Article 237 (repealed)
Article 238
Article 239
Article 240
Article 241 (repealed)
Article 242 (repealed)
Article 243 (repealed)
Article 244 (repealed)
Article 245 (repealed)
Article 246 (repealed)

Part Six
Article 281
Article 282
Article 283
Article 284
Article 285
Article 286
Article 287
Article 288
Article 289
Article 290
Article 291
Article 292
Article 293
Article 294
Article 295
Article 296
Article 297
Article 298

175
176
177
178
179
180
181
182
183
184
185
186
187
188

Section 5
Article 188a
Article 188b
Article 188e

Seetion 5
Artiele 246
Article 247
Article 248

Chapter 2
Article 189
Article 189a
Article 189b
Article 18ge
Article 190
Article 191
Article 191a*
Article 192

Chapter 2
Article 249
Article 250
Article 251
Article 252
Article 253
Article 254
Article 255
Article 256

Chapter3
Article 193
Article 194
Article 195
Article 196
Article 197
Article 198

Chapter3
Article 257
Article 258
Article 259
Article 260
Artiele 261
Article 262

Chapter4
Article 198a
Article 198b
Article 198e

Chapter4
Article 263
Article 264
Article 265

Chapter5
Article 198d
Article 198e

Chapter5
Article 266
Article 267

Title 1I
Article 199
Article 200 (repealed)
Article 201
Article 201a
Article 202
Article 203
Article 204
Article 205

Title 1I
Article 268
Article 269
Article 270
Article 271
Article 272
Article 273
Article 274

Final Provisions
Article 247
Article 248

Article 277
Article 278
Article 279
Article 280

Article 299
Article 300
Article 301
Article 302
Article 303
Article 304
Article 305
Artiele 306
Article 307
Article 308
Article 309
Article 310
Article 311
Article 312

Final Provisions
Article 313
Article 314

Source: Conferenee of the Representatives of the Governments of the Member States, Treaty of Amsterdam.
*New Treaty of Amsterdam article
tTitle amended by the Treaty of Amsterdam
*New Treaty of Amsterdam title
Chapter amended by the Treaty of Amsterdam

TABLES INCLUDED
IN THE ENTRIES

Commission Presidents, 1958-2000

57

Commissioners per Member State, 1967-2000

60

Commissioners and Their Portfolios, 1958-2000

61

Commission Directorates-General and Services, 1995-2000

66

EC/EU Member States, 1957-2000

167

Chronology of Enlargement

168

Presidents of the European Parliarnent

214

European Parliarnent Committees and Subcommittees

215

Number ofEP Seats Held by Party Groups, 1979-1996

381

EU-Related Referenda

398

10

533

THE CONTRIBUTORS

Karen 1. Alter
Smith College

Deirdre Curtin
University of Utrecht

Fulvio Attina
University of Catania

Peter Curwen
Sheffield Hallam University

Martin Baldwin-Edwards
The Queen's University
Belfast

Claudio D' Aloya

Council Secretariat
Brussels

Christos Bourdouvalis
Augusta State University

Desmond Dinan
George Mason University and
Netherlands Institute of International Relations
Clingendael

Alan W Cafruny
Hamilton College
Michael Calingaert
Guest scholar, The Brookings Institution,
and the Institute of European Studies
Free University of Brussels
C.J. Carey
Court of Auditors (retired)
Luxembourg
Walter Carlsnaes
Uppsala University
Clive Church
University of Kent at Canterbury
J. Bryan Coltester
Principia College
Maria Green Cowles
Center for German and European Studies
Georgetown University
William Cromwell
American University

Duchene
Journalist and Monnet biographer

Fran~ois

AndrewDuff
The Federal Trust
London
Geoffrey Edwards
Pembroke College
Cambridge University
Gerda Falkner
University ofVienna
Jonathan Fault
European Commission
Brussels
Kevin Featherstone
University of Bradford
Alan Forrest
Council Secretariat
Brussels

535

536

The Contributors

Cleveland R. Fraser
Furman University

lan Klabbers
University of Amsterdam

Stephen George
University of Sheffield

Robert Ladrech
University of Keele

lohn Gillingharn
University of Missouri-St. Louis

Brigid Laffan
University College Dublin

Roy H. Ginsberg
Skidmore College

Carl Lankowski
American Institute for Contemporary German
Studies
Johns Ropkins University

Erik Goldstein
University of Birmingham
Peter Gowan
University of North London
lustin Greenwood
Robert Gordon University
Isebill V Gruhn
University of California at Santa Cruz
Clifford Hackett
Jean Monnet Council
Washington, D.C.
Nick Ha!kkerup
Faculty of Law
University of Copenhagen
Martin Holland
University of Canterbury
Leon Hurwitz
Cleveland State University
Selina lackson
Tenneco
Francis lacobs
European Parliament Secretariat
Brussels

Pierre-Henri Laurent
Tufts University
Finn Laursen
Thorkil Kristensen Institute
South Jutland University Center
Salvatore Lombardo
Siena College
lose M. Magone
University of Rull
Giandomenico Majone
European University Institute
Florence
Janne Haaland Matlary
University of Oslo
Andreas Maurer
Institute for European Politics
Bonn
Francis M cGowan
University of Sussex
Kathleen R. McNamara
Princeton University
Elizabeth Meehan
The Queen's University
Belfast

Olli-Pekka lalonen
Tampere Peace Research Institute
University ofTampere

Sophie Meunier
University of Chicago

Hugo M. Kaufmann
European Union Studies Center
City University of New York

Monica Mezzadri
Council Secretariat
Brussels

The Contributors

Alexander Moens
Simon Fraser University
Andrew Moravcsik
Center for European Studies
Harvard University
loaquim Muns
University of Barcelona
AnnaMurphy
University College Dublin

Franciska Pouw
Ministry of Iustice
The Netherlands
Hjalte Rasmussen
Faculty of Law
University of Copenhagen
lohn Redmond
University of Birmingham
Glenda G. RosenthaI
Institute on Western Europe
Columbia University

Philip Myers
College of Europe
Bruges

George Ross
Brandeis University and Harvard University

Brent F. Nelsen
Furman University

Edward M. Rowell
Former U.S. Ambassador to Luxembourg

Michael Nentwich
Austrian Academy of Sciences

Trevor Salmon
University of Aberdeen

Sir William Nicoll

Council Secretariat (retired)
Brussels

Dennis l.D. SandoIe

George Mason University

Neill Nugent
Manchester Metropolitan University
HugoPaemen
EU Ambassador to the United States
Peter Pa/inkas
European Parliament Secretariat
Luxembourg
Wilie Paterson
Institute for German Studies
University of Birmingham
Alan Butt Philip
University of Bath
Alfred Pijpers
Netherlands Institute of International Relations
Clingendael
lohn Pinder
The Federal Trust
London

Alberta Sbragia
University of Pittsburgh
Rene Schwok
European Institute
University of Geneva
Michael Shackleton
European Parliament Secretariat
Brussels
Michael Smith
Loughborough University
Maria-Francesca Spatolisano
European Commission
Brussels
Beverly Springer
American Graduate School of International
Management
Dennin Swann
Loughborough University
Ron Tiersky
Arnherst College

537

538

The Contributors

Alfred Tovias
The Hebrew University of Jerusalem

Helen Wallace
Sussex European Institute

DerekW Urwin
University of Aberdeen

lHH. Weiler
Harvard Law School

Peter van Harn

George C. Marshali European Center for
Security Studies
Garmisch Partenkirchen

Paul 1 J. Welfens
Potsdam University

Sophie Vanhoonacker
European Institute of Public Administration
Maastricht

Sherrill Brown Wells

George Washington University
Wolfgang Wesseis
University of Cologne

lohn Van Oudenaren

The Library of Congress
Washington, D.C.

Pia Christina Wood

Old Dominion University

Anthony Wallace
George Mason University

Birol A. Yesilada
University of Missouri-Columbia

INDEX

Accession, 1, 118, 166--169; of Austria,18-19,166,

202,206,298,411,479,512; ofCentral and
Eastern European States, 37-40,166--169; criteria
for, 1,38,167; ofDenmark, 80,166,184,194,
197,202,259,272,296,306,312,352,359,360,
364,366,389,506,507; ofFinland, 166,202,
206,234-235,298,411,437,460,479,511,513,
514; ofGreece, 46,166,185,204,256,309,333,
334,337,437,452,508; ofIreland, 80,166,184,
299, 389,506--507; of Portugal, 46, 54, 59, 80,
166, 185,204, 344,418,434,437,508-509; of
Spain, 46, 54, 59, 80, 166, 185,204,255,344,
418,430-431,434,437,441,508,509;of
Sweden,166,202,226,298,411,479,511,512;
Treaty, 1; ofUnited Kingdom, 4, 80,166,184,
197,263,299, 333, 366, 389,424, 506, 507. See
also Enlargement
Accountability, 1-2; ofCommission, 2, 59~; of
Council of Ministers, 1-2, 103-105; of European
Parliament, 2, 214
Acheson, Dean, 2,180,346,416
ACP. See African, Caribbean, and Pacific countries
Acquis communautaire, 1,2,10,38,147,167,197,
236,296,316,440,463,465
Acquis politique, 2
Action Committee for the United States of Europe
(ACUSE),3-4, 178,252,348-349,463
Action Group on Market Access, 4, 325
Act of Trujillo, 10
ACUSE. See Action Committee for the United
States of Europe
Additionality, 5, 48. See also Cohesion policy
Adenauer, Konrad, 5-6, 282, 318; and Elysee
Treaty, 162,238,252,348; and European
Defense Community, 196; and A1cide de
Gasperi, 121-123; and Charles de Gaulle, 162,
238, 252, 348; and Fouchet Plan, 237; and
launch of European integration, 180-181, 183,
210,261,331,375,416; and Jean Monnet,
180-181
Ad-hoc Committee on a People's Europe. See
Adonnino Committee
Ad-hoc Committee on Institutional Affairs. See
Dooge Committee
Ad-hoc Group on Immigration, 6, 69, 259

Ad Hoc Liaison Committee Coordinating

International Aid for the Occupied Territories,
342
Adonnino, Pietro, 7. See also Adonnino Committee
Adonnino Committee, 7,110,384
Advanced Communications Technologies for
Europe (RACE), 7
AER. See Assembly of European Regions
Aerospatiale, 7, 11, 223
African, Caribbean, and Pacific (ACP) countries, 7,
33,79,80,137,187,196,322,328-330,390,
479,481,508,509,510. See also Lome
Convention
Agencies. See Community agencies
Agenda 2000, 7, 23,40, 50, 68, 169,437,515
Airbus, 7-8, 91, 200, 275
A la carte integration, 8. See also Differentiated
integration
Albania, 166,372,388
Algeria,23,123,336,337
Allaire, Paul, 457
Allied Maritime Transport Executive (AMTE), 346
Alps, 87
Alsace Lorraine, 415
Amato, Giuliano, 144
American Chamber of Commerce in the EU
(AMCHAM-EU), 292, 456
Amnesty International, 292
Amsterdam Summit (June 1997),8,59,121, 142,
145,229,244,269,296,314,319,398,434,
514-515
Amsterdam Treaty, 7,8-10,226,464,465; and
budget, 30-31; and Commission, 56, 57, 58, 59,
67; and Common Foreign and Security Policy, 84,
107,387; and cultural policy, 113; and
decisionmaking, 2, 13,45, 100, 104, 118, 119,
120,211,212,213,395,471; and environmental
policy, 171; and European Parliament, 2, 211,
216; and flexibility, 139; and fraud, 245; and
health policy, 263; and Justice and Horne Affairs,
314,316; and national parliaments, 354;
negotiation of, 294, 296, 355, 398, 434, 514-515;
and protocols, 393; ratification of, 136; and
Schengen Agreement, 269-270, 413-414; and
social policy, 43, 225, 424, 425, 427; and

539

540

Index

subsidiarity, 440; and transparency, 460; and

Western European Union, 487, 488
AMTE. See Allied Maritime Transport Executive
Andean Community, 10,514
Andean Pact, 10,322
Andreotti, Giulio, 11,458
Angola, 83
Animal welfare, 9, 393
Ankara Agreement, 467
Anthem, 11
Antici Group, 11,70
APEC. See Asia Pacific Economic Cooperation
"A" Point, 11, 105
Arab-Israeli conflict, 342-343
Arab-Israeli War (1973), 218, 228, 341
Arab League, 175, 341
Argentina,321,322,405
ARIANE, 11, 111
Ariane rocket, 11,213
Arianspace, 11
ARION,l1
ARISTEION, 12, 111
Armenia,90
Article 113 Committee. See 113 Committee
Article 189b Procedure. See Co-Decision Procedure
Article 189c Procedure. See Cooperation Procedure
ASEAN. See Association of Southeast Asian
Nations
Asia, 12,41,405
Asia-Europe Meeting, 12,41,514
Asia Pacific Economic Cooperation (APEC), 12, 13
Assembly ofEuropean Regions (AER), 12
Assembly of the Republic (Portugal), 390
Assent procedure, 12, 13, 119
Assizes, 13, 354
Association agreements, 13, 21. See also Europe
agreements
Association of European Automobile Manufacturers,
293
Association of Southeast Asian Nations
(ASEAN),13-14, 41, 79,155,508
Asylum, 9,141,175,311,313,314,413
AT&T,451
Atatrk, Kemal, 467
Atlantic alliance. See North Atlantic Treaty
Organization
Atlas-Centuar rocket, 11
Attali, Jacques, 178
Audiovisual Guarantee Fund, 14, 17
Audiovisual policy, 14-18
Audit board, 18, 107
Auriol, Vincent, 415
Australia, 12, 13,369
Austria, 18-20; accession of, 38, 166,202,206,298,
404,411,479,512; and Centra1 European
Initiative, 40; and Common Foreign and Security
Po1icy, 84; and decisionmaking, 120,395; and
environmental policy, 171-172; and European
Economic Area, 197, 199; and European Free

Trade Association, 201; and federalism, 231; and

infringement, 278; and national parliament, 19,
353; neutrality of, 84, 357-358; and opposition to
EU, 367, 369; and presidency, 392; referendum
in, 9, 366, 513; and Schengen Agreement, 413;
and Siovenia, 423; and Western European Union,
486-487
Austria-Hungary, 121
Austrian Freedom Party, 366, 381
Azerbaijan, 90
Baby BeIls, 451
Badinter, Robert, 494
Bahrain, 259
Baker, James, 342, 372,476
Balkans, 493-497. See also Bosnia; Greece;
Yugoslavia
BaIladur,Edouard,21,31,144,222,240
Balladur Plan, 21, 39, 372, 385,406,513
Baltic Council, 21
Baltic Sea Region Initiative, 21
Baltic states, 21-23, 37, 38, 88, 136. See also
Estonia; Latvia; Lithuania
Bangemann, Martin, 367, 456
Bank for International Settlements, 68
Bank ofFrance, 45,125
Barcelona Declaration, 23-23, 115, 337-339, 343,
432,513
Barshefsky, Charlene, 457
Basic Law (Germany), 5,196,254,438-439
Basle-Nyborg Reform, 208
BCC. See Business Cooperation Center
BC-NET. See Business Cooperation Network
Beck, Joseph, 330
Belarus, 40, 89-90
Belize,411
Belgium, 24-25; and Benelux, 25, 78,113,137,269,
295,367,373,375,415,416,485; and Brussels
Treaty, 142; and Common Market, 85; and
decisionmaking, 120,395; and Economic and
Monetary Union, 147, 149; and environmental
policy, 171; and Eurocorps, 175; and European
Defense Community, 196; and European
Monetary System, 208; and European Political
Community, 217; and implementation, 272; and
infringement, 278; and Joint Research Centers,
404; and launch of European integration, 179,
183,373,429-430,462,505; and national
parliament 351-352; and North Atlantic Treaty
Organization, 360; and Organization for
Economic Cooperation and Development, 369;
and Schengen Agreement, 412; and Western
European Union, 485
Belgium-Luxembourg Economic Union (BLEU), 24
Bell Cablemedia, 451
Benelux,25, 78,113,137,269,295,367,373,375,
415,416,485
Berlaymont, 26
Berlin blockade, 373, 415-416
Berlin Wall, 6,36,166,319,344,476

Index

BEUC. See European Bureau of Consumers' Unions

Beveridge, William, 231
Beyen, Johan Willern, 26,182,341,348,355,462
Beyen Plan, 26,182,462
Bidault, Georges, 415, 416
Binningham Summit (October 1992),71,512
Black Monday, 26, 295,464, 511
Black Wednesday, 26, 511
Black Sea, 469
Blair, Tony, 296,424,425,426,473
Blair House Agreement, 250, 480-491
BLEU. See Belgium-Luxembourg Economic Union
Blum, Leon, 415
Boeing, 7
Bolivia, 10, 405
Bosch,220
Bosnia, 40, 56, 117, 241, 244, 257, 349, 385-386,
388,487,493,494-496. See also Yugoslavia
Bossi, Umberto, 367
Bovine Spongiform Encephalopathy (BSE), 26--26,
75,98,216,514
Brandt, Willy, 27, 252, 253, 263, 376, 389, 414, 485
Brazil, 321, 322, 405
Bremen Summit (July 1978), 185,207,414,508
Bretton Woods System, 146, 148, 149, 150, 157,
248,370,423,475
Breydel, 26, 27
Briand, Aristide, 231, 467
Britain. See United Kingdom
British Aerospace, 7
British Te1ecommunications (BT), 451
Brittan, Leon, 27-28, 411, 456
Brok, Elmar, 222, 296, 298
Brown, Ron, 456
Bruges Group, 28
Brunei, 12, 13
Brunner,Man1Ted,367,368
Brussels, 28, 65, 382
Brussels-Capital Region, 25
Brussels Summit (February 1988),48,73,74, 130,
379
Brussels Summit (October 1993),91
Brussels Treaty (March 1948),28, 142,360,373,
485,505
Brussels Treaty (July 1975), 107-109
BSE. See Bovine Spongiform Encephalopathy
BT. See British Telecommunications
Budget, 28-31, 359, 377, 400, 439; and Court of
Auditors, 2; and Common Agricultural Policy, 73,
75,237,250; and Common Foreign and Security
Policy, 84-85; and cultural policy, 110; and
decisionmaking, 120; and De10rs I, 129,437; and
Delors 11, 130,437; and Denmark 136; and
energy policy, 164; and European Parliament 131;
and fraud, 2, 30,113,194,245,411; and Justice
and Horne Affairs, 312; and Netherlands, 356;
and Sound and Efficient Management Initiative,
427; and Sound Financial Management Group,
428; and Trans-European Networks, 459; and

541

United Kingdom, 237, 294, 318, 344, 453, 472,

509
Buenos Aires Dec1aration, 322
Bulgaria, 22, 31,36--37,40, 166,385,388,487,413,
514. See also Central and Eastem European
States
Bundesbank,31-32, 126, 145, 150,207,253
Bundesrat, 132,233,234,352
Bundestag, 132
Bureau, 32, 382
Burgenland, 19
Burma, 12, 14
Burundi,89
Bush, George, 11,58,318,458,476,496
Bushevel, Barend, 455
Business Cooperation Center (BCC), 423
Business Cooperation Network (BC-NET), 423
Cabinet, 33, 58-59, 64--65
Cable and Wireless, 451
CACM. See Central American Common Market
CAG. See Competitiveness Advisory Group
Callaghan, James, 472
Camp DavidAccords, 175,341
Canada, 12,33-35,82, 155,257,264,360,372,
374,479
Canada-United States Free Trade Agreement, 34
Canary Islands, 376
CAP. See Common Agricultural Policy
Carbon Dioxide (C02) Tax, 35,166,259
Cartagena Agreement, 10
Carter, Jimmy, 207, 414
Cassis de Dijon Case, 35, 86, 193,400,435
Catalonia, 367, 369
Catholic Church, 367, 438
CCP. See Common Commercial Policy
CDU. See Christian Democratic Union
CEAC. See Conference of European Affairs
Committees
Ceausescu, Nicolai, 406
Cecchini, Paolo, 35. See also Cecchini Report
Cecchini Report, 18,35-36,47
CEDEFOP. See European Center for the
Development of Vocational Training
CEES. See Central and Eastem European States
CEFIC. See European Council of Chemical
Manufacturers Federation
CEI. See Central European Initiative
CE Mark, 36, 436
CEN. See European Standards Committee
CENELEC. See European Electrotechnical
Standards Committee
Center for Information, Discussion, and Exchange
on the Crossing of Borders and Immigration
(CIREFI), 311, 315
Center for Information, Discussion, and Exchange
on Asylum (CIREA), 311, 314
Center for Information Technologies and
Electronics, 310
Central America, 322, 411

542

Index

Central American Common Market (CACM), 322

Central and Eastern European States (CEES),
36-40; accession of, 37-40,166-169; and
Agenda 2000, 7, 23, 40, 50, 68, 169,437,515;
and Balladur Plan, 21; and Baltic States, 22-23;
and Bulgaria, 22, 31, 36-37, 40, 166,385,388,
487,413,514; and Central European Initiative,
40; and cohesion policy, 51; and Common
Agricultural Policy, 76; and Czech Republic,
37,40,59,115,166,169,360,362,369,385,
388,406,407,416,483,511,513,514,515;
and Europe Agreements, 13,22,23,31,37,38,
40,167,176,298,345,406,423,456,511,512;
and Hungary, 22, 36-37, 40, 58, 59, 126, 166,
169,268,360,362,369,385,388,406,407,
483,487,510,511,515; and Mediterranean
policy, 23; and Poland, 21, 22, 36-37, 40, 58,
59,126,166,169,360,362,369,385,387-388,
406-407,412,483,510,511,515;and
Romania, 22, 36-37,40, 166,385,388,405,
487,513; and Slovakia, 37, 40,115,385,407,
423,483,513; and Slovenia, 22, 40, 59, 166,
169,218,242,388,423,494,511,514,515
Central Bureau for Nuc1ear Measurements, 310
Central European Initiative (CEI), 40
CET. See Common External Tariff
CFP. See Common Fisheries Policy
CFSP. See Common Foreign and Security Policy
Chaban-Delmas, Jacques, 125
Charlemagne Prize, 121
Charter of Fundamental Social Rights for Workers.
See Social Charter
Charter of Paris for a New Europe, 22, 40, 511
Chechnya,102,409
Chernobyl, 83,165
Cheysson, Claude, 44
Chile, 12,321,323,405
China, 11, 12,40-42
Chirac,Jacques,145,239,240,243,362
Christian Democrat Group. See European People's
Party
Christian Democratic Party (ltaly), 121,303
Christian Democratic Union (CDU), 5, 27,162,252,
318,321,376
Christian Social Union (CSU), 318
Churchill, Winston, 42,101,210
Cinema. See Audiovisual Policy
CIREA. See Center for Information, Discussion, and
Exchange on Asylum
CIREFI. See Center for Information, Discussion,
and Exchange on the Crossing of Borders and
Immigration
CIS. See Commonwealth of Independent States
Citizenship, 8, 42-44, 132, 188,271,440
CITF. See Combined Joint Task Forces
Clappier, Bernard, 45
Clementel, Etienne, 346
Clinton, Bill, 17,358,457,477,487,496,514
Closeness, 45, 132

CMEA. See Council for Mutual Econornic

Assistance
Cockfie1d, Arthur, 185,419
Co-Decision Procedure, 45, 88, 96,102,111,119,
210- 213,216,233,237,245,351,465
COFACE. See Committee of Farnily Organizations
in the Community
Cohesion Fund, 45, 50, 204, 255
Cohesion Policy, 46-51, 129,387,437. See also
Regional Policy, Structural Policy
Cold War, 36, 51-55,102,122,125,126, 158, 176,
202,216,238,240,241,251,334,336,347,
357-358,360-363,372,373,376,384,442,444,
474-476,485
College of Europe, 510
Collegiality, 56, 56, 59
Colombia, 10,322,405,411
Colombo, Emilio, 251, 427
COM. See Common Organization of the Market
Combined Joint Task Forces (CITF), 10, 56, 84,
387,487-488
COMECON. See Council for Mutual Econornic
Assistance
COMETI. See Community Action Program in
Education and Training for Technology
Cornitology, 56-57, 120
Commission, 57-68,183,517,518,520-521;
accountability of, 2, 59-64; and Amsterdam
Treaty, 10,56,57,58,59,67; and audiovisual
policy,14-18; and Belgium, 24; and Berlaymont,
26; and Bovine Spongiform Encephalopathy
crisis, 26-27; and Breydel, 27; and Brussels, 28;
and budget, 30-31,129,245; and Cabinets, 33,
58-59, 64-65; and carbon dioxide tax, 35, 259;
and Central and Eastern European States, 36-39,
115, 176,247,391; and China, 40-41; and
cohesion policy, 47-51, 91; and collegiality, 56,
59; and cornitology, 56-57; and Committee of the
Regions, 70-71; and Common Agricultural
Policy, 72-76; and Common Commercial Policy,
76-80; and Common Foreign and Security Policy,
83-85; and Commonwealth of Independent
States, 89; and competition policy, 86-88, 92-95,
340; and consumer policy, 98-99; and Council of
Ministers, 102-106; and Court of Auditors,
107-109; and cultural policy, 110-113; and
decisionmaking, 11, 102, 117-121,325; and
J acques De1ors, 125-129; and democratic deficit,
131-134; and Econornic and Monetary Union,
143-152,157; and education policy, 159-160;
and empty chair crisis, 104, 123, 162-163,
261-262; and energy policy, 164; and
enlargement, 1, 166-169; and environmental
policy, 170-173; and European Community law,
191-194; and European Investment Bank,
203-204; and European Parliament, 57-59,
210-214,298; and Greece, 256; and immigration
policy, 269-270; and implementation, 271-273;
and industrial policy, 275-277; and investiture,

Index
298; and Italy, 301-302; and Japan, 305-308; and
Justice and Horne Affairs, 311-316; and lobbying,
291-293; and Emile Noel, 353-359; and
Organization for Economic Cooperation and
Development, 369-371; presidency of, 57-59,
125-129,309,334,375,405,411-412,454-455;
and regional policy, 12, 70-71; and regulatory
policy, 399-402; and research and technological
development policy, 224, 402-405; and Russia,
407-408; and single market program, 91, 221,
275,294-295,344,419-422,442;andsocial
policy, 425-427; and Spierenberg Report, 433;
and subsidiarity, 439-441; and
telecommunications, 449; and transparency, 105,
460; and transport policy, 460-462; and Treaty on
European Union, 463-466
Committee for Proprietary Medicinal Products,
176--177
Comrnittee for Veterinary Medicinal Products, 177
Comrnittee of Central Bank Governors, 68, 144,
146,208
Committee of Family Organizations in the
Community (COFACE), 98
Committee of Permanent Representatives
(COREPER), 11,68-70,71, 105, 162, 184,239,
352,353,388,465,488-489
Comrnittee ofthe Regions (COR), 70-71, 43,
70-71,133,153,440,465,512,517
Committee on Agricultural Structures and Rural
Development (STAR), 71, 436
Committee on Institutional Affairs, 110, 141, 508,
509
Comrnittee on a People's Europe. See Adonnino
Comrnittee
Common Agricultural Policy (CAP), 71-76, 88,284,
287,298; and budget, 67, 73, 75, 96,126,129,
177, 237, 250, 344, 400, 509; and Central and
Eastern European States, 38-39, 387; and
cohesion policy, 46, 219; and Common Fisheries
Policy, 81; and decisionmaking, 120,212,288,
436; and Denmark, 135; development of, 78, 72,
123,183,238,283,335,437,462,506;and
empty chair crisis, 162-163,261; and
environmental policy, 75-76; and European
Agricultural Guidance and Guarantee Fund, 177,
390; and European Free Trade Agreement, 201;
and European Monetary System, 255; and France,
238; and General Agreement on Tariffs and Trade,
77,128,249-250,480-481; and Ireland, 236,
299-300; and Italy, 302; and Latin America, 321,
322; and MacSharry reforms, 39, 128,333-334,
511; and Monetary Compensatory Amounts, 148,
258, 346; and Netherlands, 356; protests against,
366; and Spain, 430; and Standing Committee on
Agricultural Structures, 71, 436; and Switzerland,
445; and Turkey, 468; and United Kingdom, 263,
453,509
Common Commercial Policy (CCP), 76--80, 91,
119-120,127,212,305

543

Common Customs Tariff. See Common External

Tariff (CET)
Common External Tariff (CET), 77, 78, 85, 154,
183, 198
Common Fisheries Policy (CFP), 81-83, 269, 299,
455
Common Foreign and Security Policy (CFSP),
83-85, 167,454; and acquis politique, 2; and
Amsterdam Treaty, 9-10; and Austria, 19; and
Balladur Plan, 21, 23; and Belgium, 24; and
budget, 30-31; and Central and Eastern European
States, 39; and China, 41; and Commission, 57,
66,67; and contact group, 99; and COREU, 100;
and Council of Ministers, 102, 105; and Cyprus,
114; and decisionmaking, 69, 88, 97, 98, 102,
105,117,118,120,132,309-310,352,353,354,
471; and European Council, 188; and European
Court of Justice, 194; and European Economic
Area, 197; and European Parliament, 132,212,
216; and Finland, 235; and France, 240, 241, 345;
and Greece, 379; and Gulf War, 259; High
Representative for, 8, 107, 244, 466; and human
rights, 266; and Middle East, 343; and
Netherlands, 357; and neutrality, 358; and 1991
intergovemmental conference, 127, 186,218,
219,295,508; and 1996--1997 intergovemmental
conference, 264, 296; and North Atlantic Treaty
Organization, 361; and Petersberg DecIaration,
387; and presidency, 392; and South Africa, 428;
and Sweden, 443; and Treaty on European Union,
225,464,465, 508; and Troika, 467; and Western
European union, 486-487; and Yugoslavia, 349,
385-386,493-497
Common Market, 85-88, 479
Common Organization of the Market (COM), 88
Common position, 88
Common Technical Regulations (CTRs), 88, 225
Commonwealth, 202, 263, 333
Commonwealth of Independent States (CIS), 88-90,
137,187,407-408,410,447
Community Action Program in Education and
Training forTechnology (COMETT), 90,161
Community agencies, 90, 401-402, 459
Community Support Frameworks (CSFs), 48,91,
389-390
Community Trademark Office (CTMO), 91, 421
Company law, 91
Competence, 91-92, 380, 425
Competition policy, 68, 86,92-95, 340, 359, 402
Competitiveness Advisory Group (CAG), 95, 221,
276
Compulsory expenditure, 29-30, 95-96
Concentric circIes, 96
Conciliation Comrnittee, 96, 213
Concorde, 275
Confederation Generale du Travail (CGT), 415
Conference des organes specialises dans les affaires
communautaires (COSAC). See Conference of
European Affairs Comrnittees (CEAC)

544

Index

Conference of European Affairs Committees

(CEAC), 96, 97, 353, 354
Conference of Parliaments of the European
Community. See Assizes
Conference of Presidents and Speakers of the
Parliaments ofthe European Union, 95, 96-97,
353
Conference on Security and Cooperation in Europe
(CSCE), 41, 97, 219, 234, 384-385, 507, 508,
511. See also Organization for Security and
Cooperation in Europe
Conference on Security and Cooperation in the
Mediterranean (CSCM), 97
Conference on the Human Environment, 170
Confidence Pact on Employment, 97, 411, 459
Congo, 430
Congress ofEurope, 42, 97,101,210,355,374
Congress of Vienna, 442
Conseil d'Etat, 191,399
Consensus, 97. See also Decisionmaking
Conservative Party (UK), 228, 263, 367, 381,
453-454,472,473
Construcciones Aeronauticas S.A., 7
Constructive abstention, 84, 97-98
Consultation procedure, 98, 119,301
Consumer Committee, 98
Consumer Consultative Committee (CCC), 98
Consumer policy, 98-99
Consumer Policy Service, 98
Consumer protection, 10
Contact group, 99, 495
Contadora Group, 322
Convention for the Prevention of Marine Pollution
from Land-Based Sources, 173
Convention on Settlement, 270
Convention on the Proteetion of the Marine
Environment of the Baltic Area, 173
Convergence, 99. See also Economic and Monetary
Union
Convergence criteria, 99-100, 431, 464. See also
Economic and Monetary Union
Cooperation procedure, 88,100, 119,351
Coordinating Information on the Environment
(CORINE), 100
Copenhagen Action Plan, 342
Copenhagen Report, 100
Copenhagen Summit (April 1978), 207
Copenhagen Summit (December 1987), 130
Copenhagen Summit (June 1993), 1,22,38,167,
391,412
COR. See Committee of the Regions
Core group, 96, 262, 321. See also Differentiated
Integration
COREPER. See Committee of Permanent
Representatives
COREU, 100,217
Corfu Summit (June 1994),22,337,338,391,398
CORINE. See Coordinating Information on the
Environment

Correspondents. See Group of Correspondents

Corsica,46
COSAC. See Conference of European Affairs
Committees
COST. See European Cooperation in the Field of
Scientific and Technological Research
Costa Rica, 411
Costa v. Enal Case, 192
Coudenhove-Ka1ergi, Richard Nicolaus, 100--101,
209,231,278
Council for Mutual Economic Assistance (CMEA;
COMECON), 36, 37, 101,331,407
Council of Baltic Sea States, 21
Council of Economic and Finance Ministers
(ECOFIN), 143, 144, 146,204,208,229
Council ofEurope, 11, 18,97,101-102,188,210,
235,278,299,355,358,374,384,467,485
Council of Ministers, 102-106, 140,232-233,517,
518,523,528; accountability, 1; and Belgium, 25;
and Bovine Spongiform Encephalopathy crisis,
26-27; and budget, 28-31,67; and citizenship,
43; and Commission, 65, 68, 211-216; and
Committee of Permanent Representatives, 68-70;
and Committee ofthe Regions, 71; and Common
Agricultural Policy, 72-76; and Common
Commercial Policy, 76; and Common Foreign
and Security Policy, 83-85, 72-74; and Common
Market, 86; and competition policy, 86, 92-95;
and Council of Economic and Finance Ministers,
101, 143,144, 146,204,208,229; Council
Secretariat, 84,106-107,107-108; and
decisionmaking, 2,12-13,69-70,88,96,97,98,
100,117-121,138,301,325; and democratic
deficit, 133; and Economic and Social
Committee, 153; and education policy, 160; and
empty chair crisis, 104, 162-163,261-262,322;
and enlargement, 1-2,36-40,166-169; and
European Investment Bank, 203, 204; and
European Parliament, 382; and General Affairs
Council, 90, 217, 247, 490, 494; and Justice and
Horne Affairs, 311-316; origin of, 181, 183,355,
417; presidency of, 217, 259, 392; and research
and technological development policy, 7,
403-405; and single market program, 419-422;
and transparency, 105,459; and Treaty on
European Union, 463-466; and weighting of
votes, 10, 59
Council of the European Union. See Council of
Ministers
Council Secretariat, 84,106-107,107-108
Court of Auditors, 2,18,30, 107-109,213-214,
245,272,508,517
Court of First Instance, 109, 193-194,272
Craxi, Bettino, 343
Creutzfeldt-Jakob disease, 26, 98, 514
Crimean War, 467
Croatia, 40, 117,218,242,251,349,493-484,
493-494,511
Crocodile Club, 109-110, 141,433

Index

CSCE. See Conference on Security and Cooperation

in Europe
CSCM. See Conference on Security and
Cooperation in the Mediterranean
CSFs. See Community Support Frameworks
CSU. See Christian Soeial Union
CTMO. See Community Trademark Office
CTRs. See Common Technical Regulations
Cuba, 481
Cuban missile crisis, 241
Cultural policy, 14-18, 110-113,452,397
Customs Information System, 194
Customs 2000 Program, 113
Customs Union, 76, 77-78, 79,113,147,154,183,
198,274,507,508
Cyprus, 23,38, 113-115, 166, 167, 175,296,336,
337,338,339,468-469,511,515
Czechoslovakia, 22, 36-37, 52, 115,360
Czech Republic, 37,40,59,115,166, 169,360,362,
369,385,388,406,407,416,483,511,513,514,
515. See also Central and Eastem European
States
Dail,300
Damlier-Benz Aerospace, 7
Danish People 's Movement Against the EC, 366,
367
Dassonville Case, 172
Davignon, Etienne, 117, 185,217,220,224,275,
376, 454. See also Davignon Report
Davignon Report, 117,376,507
DaytonAccords, 84, 99,117,257,372,385,406,
477,495,514
De Bondini, Alexandre, 3
Deeision, 117
Deeisionmaking, 117-121; andAmsterdam Treaty,
8, 10; and Commission, 57-68; and Council of
Ministers, 102-106; and empty chair crisis,
162-163; and European Econornic Area,
198-199; and European Parliament, 12, 15, 16,
210-216; and integration theory, 284-285, 327;
and Ioannina Comprornise, 298-299; and national
parliaments, 352; and qualified majority voting,
24,104-105,119,120,124,126,131,239,253,
318,325,395,418; and Single European Act, 2,
97,104,131,211,213,272,275,325,351,354,
382, 395; and soeial policy, 424-425; and Treaty
ofRome, 45,123-124; and Treaty on European
Union, 2, 97,118,471
Declaration of Human Rights, 266
Declaration of Rome, 511
Declaration on Fundamental Rights and Freedoms,
188
Declaration on the Hierarchy of Community Acts,
264
De Clercq, Willy, 101
De Deus Pinheiro, Joiio, 390
Deepening, 121
Defense policy, 10
De Gasperi, Aleide, 5, 121-122,303,331

545

De Gaulle, Charles, 123-124,438; and Konrad

Adenauer, 6,162,238,252,348; and empty chair
crisis, 54, 69, 104, 123, 162-163, 184,261-262,
279,332, 334,335,395,405,430,480,506; and
Fouchet Plan, 237; and Walter Hallstein, 69, 123,
183,261-262,340,453; and Jean Monnet, 251,
347, 349; and North Atlantic Treaty Organization,
360-361; and Georges Pompidou, 388; and
Quebec, 33; and Soames Affair, 424; and
Margaret Thatcher, 453; and United Kingdom,
45,201,263,333,424,471
Dehane, Jean-Luc, 298
Dekker, Wisse, 220
De Larosiere, Jacques, 178
Dell, Edmund, 455
Delors, Jacques, 57-60, 125-129,368; and
audiovisual policy, 17; and Leon Brittan, 28; and
cohesion policy, 46-48; and cultural policy, 112;
and Delors I, 47, 49, 58, 67, 73,126, 129-130,
219,379,437,510; and Delors 11, 49-50, 74,128,
129, 130,437; and Delors Committee, 126, 144,
145,510; and Delors Report, 49, 126, 127, 130,
144,150, 151,157,185,186,463-464;and
Economic and Monetary Union, 144-145, 150;
and European Econornic Area, 197; and
federalism, 231, 239; and management of
Commission, 65, 68; and Russia, 407; and
Jacques Santer, 57-60, 411; and single market
program, 125-126,221,232,349,419-420,424,
438,439,510; and social policy, 9, 206, 227, 325,
326,424,425,427,473; and Margaret Thatcher,
453-454; and Transatlantic Declaration, 11,458
Delors 1,47,49, 58,67, 73,126,129-130,219,379,
437,510
Delors 11, 49-50, 74, 128, 129, 130,437
Delors Committee, 126, 144, 145,510
Delors-Oslo Process, 197
Delors Plan. See Delors Report
Delors Report, 49,126,127,130, 144, 150, 151,
157,185,186,463-464
Democratic deficit, 104, 128, 130-134,266
Democratic Unitary Coalition (Portugal), 390
Denmark, 134-137; accession of, 166, 184, 194,
197,202,259,272,296,306,312,352,360,364,
366,389,506,507; and Baltic Council, 21; and
Common Fisheries Policy, 81; and
decisionmaking, 120,395; and differentiated
integration, 138; and Economic and Monetary
Union, 127,465; and environmental policy, 35,
171; and European Monetary System, 208; and
intergovemmental conferences, 343; and
neutrality, 442; and Nordic Council, 359; and
North Atlantic Treaty Organization, 442;
opposition to European Union, 366-369, 380; and
Organization for Economic Cooperation and
Development, 369; referenda in, 128, 186,226,
324,366,368, 397-398,418,466,511; and
SchengenAgreement, 413; and Single European
Act, 190,418; and telecommunications policy,
451-452; and transparency, 105; and Treaty on

546

Index

European Union, 233; and Western European

Union, 486-487
Derogation, 1, 137
Deutsch, Karl, 278, 279
Deutsche Telekom, 451, 452
Development policy, 137, 264
De Villiers, Bernard, 367
DeVilliers List, 227
Dien Bien Phu, 195
Differentiated integration, 2, 95, 137-140,236; and
flexibility, 10, 139, 236
Dillon Round, 81, 85, 248
Dini, Lamberto, 115
Direct effect, 140, 192. See also European Court of
Justice
Direct elections to the European Parliarnent, 2, 4, 19,
140,184,210-211,309,325,356,367,438,443,
509,510,513
Directive, 140
Directorate-General, 140
Dispute Settlement Body, 490
Dispute Settlement Understanding, 490
Dominican Republic, 323
Dooge, Jarnes, 140,509. See also Dooge Committee
Dooge Committee, 7,140-141,237,294,343,344,
418,509
Dooge Report, 295
Double-Price System, 141
Draft Declaration of the European Resistance, 210,
433
Draft European Act. See Genscher-Colombo
Proposals
Draft Treaty Establishing the European Union, 110,
140,141,184,185,211,225,232,295,418,
433-434,439,509
Drugs,314, 316,467
Dual Mandate, 141,351
DublinConvention,141-142,269,314
Dublin Summit (June 1990), 173, 189, 342, 407
Dublin Summit (December 1996),40,76,216,229,
296,315,434
Dulles, John Foster, 6, 346
Dunkirk Treaty, 142,373
EAD. See Euro-Arab Dialogue
EAGGF. See European Agricultural Guidance and
Guarantee Fund
East Germany, 6, 27,37,50, 126, 152,251,252,
376,405,412, 510
East Timor, 12, 14
EBRD. See European Bank for Reconstruction and
Development
EBS. See Europe by Satellite
EC. See European Community
ECB. See European Central Bank
ECE. See Econornic Comrnission for Europe
ECHO. See European Community Humanitarian
Office
ECIR. See European Center for Industrial Relations

ECIS. See European Center for Infrastructure

Studies
ECJ. See European Court of Justice
ECOFIN. See Council ofEconornic and Finance
Ministers
Econornic and Financial Committee, 143
Econornic and Monetary Union (EMU), 143--152;
and Austria, 19; and Edouard Balladur, 31; and
Belgium, 25; and Cohesion Fund, 45, 46, 49; and
Common Agricultural Policy, 254-255; and
Common Commercial Policy, 76; and
convergence criteria, 99-100,133,431,459,464;
and Council of Economic and Finance Ministers,
101; and Cyprus, 114; and decisionmaking, 118;
and Jacques Delors, 58,125-127,129; and Delors
Report, 49, 126-127, 130, 144, 150, 151, 157,
185,186,463-464,510; and Denmark, 127,
135-136, 456; and differentiated integration, 139;
and European Central Bank, 13, 68, 143, 144,
147,157,179,185,224,228,240,294,326,465;
and European Council, 188--189; and European
Monetary Institute, 32, 68, 127, 145, 151, 179,
206,214,515; and European Monetary System,
206-209; and European Parliarnent, 212, 216; and
European System ofCentral Banks, 145,224,
229,465; and enlargement, 167; and Exchange
Rate Mechanism 11, 229; and Finland, 235; and
France, 144-145, 149, 151,207-209,434;and
German~ 143-146, 149, 151,207-209,252,434;
and Greece, 258; and integration theory, 156-157,
283,288, 349; and Ireland, 300; and ltaly, 302,
303; and Helmut Kohl, 319; and national
parliarnents, 352; and Netherlands, 356; and 1991
intergovernmental conference, 295-296,
344-345,511; and Jacques Santer, 411; and
Single European Act, 418; and single market
prograrn, 153, 154,419,454; Stability and
Growth Pact, 434,514-515; and subsidiarity, 438,
439; and Sweden, 443; and Margaret Thatcher,
453; and Treaty on European Union, 32, 99,127,
130,132, 138,144-152, 157,207,463-466;and
unemployment, 9, 205; and United Kingdom, 26,
138,185,262,367,465; and Werner Plan, 144,
148,149,151,157,184,330,331,423,485,507
Economic and Social Cohesion. See Cohesion
Policy
Econornic and Social Committee (ESC), 28, 70, 71,
153,424,517
Econornic Commission for Europe (ECE), 153, 373
Econornic convergence. See Convergence
Economic integration theory, 153-158
ECS. See European Company Statute
ECSAs. See European Community Studies
Associations
ECSC. See European Coal and Steel Community
ECSC Consultative Committee. See European Coal
and Steel Community
Ecu, 159. See also European Currency Unit
ECU. See European Currency Unit

Index
Ecuador, 10, 405
EDC. See European Defense Community
EDF. See European Development Fund
Edinburgh Summit (December 1992),45,50,73,
130,136,186,206,221,226,440,466,512
EDIG. See European Defense Industry Group
Education policy, 159-161
EEA. See European Economie Area; European
Environment Agency
EEC. See European Economic Community
EEIG. See European Economic Interest Grouping
EFfA. See European Free Trade Association
Egypt,23,79,175,336,337,341,342
EI. See European Investment Bank
EICs. See European Information Centers
ElF. See European Investment Fund
Eisenhower, Dwight, 177
Eizenstat, Stuart, 458
ELDR. See European Liberal, Democratic, and
Reformist Party
Ei Salvador, 322, 411
Elysee Treaty, 6, 123, 162, 162,238,252,254,348,
414,506
Emblem. See Flag
EMEA. See European Agency for the Evaluation of
Medicinal Products
EMI. See European Monetary Institute
Employment, 9, 97, 200--201, 411, 459
Employment Pact. See Confidence Pact on
Employment
Empty chair crisis, 69, 73, 123, 162-163, 184,
261-262,332,334,335,395,405,430,480,506
EMS. See European Monetary System
EMU. See Economic and Monetary Union
Energy Charter, 163, 166,407,409,513
Energy policy, 163-166,310,433,454
England, 46, 71. See also United Kingdom
Engrenage, 166
Enlargement,80, 166-169. See also Accession
ENs. See European Norms
Enterprise policy. See Small and Medium-Sized
Enterprises
Environmental Action Prograrn, 205
Environmental policy, 19, 163-166, 170--174,201,
327,399,439-440,462;andCommon
Agricultural Policy, 75-76; and Environmental
Action Prograrn, 205; and European Environment
Agenc~ 100, 170, 171,201,272,273;and
European Environment Information and
Observation Network, 170; and European
Investment Bank, 204-205; and Single European
Act, 170, 419
Environment Institute, 310
EP. See European Parliament
EPC. See European Political Community; European
Politieal Cooperation
EPP. See European People's Party
EPU. See European Payments Union; European
Politieal Union

547

Equal Opportunities Council, 193

ERASMUS. See European Community Action
Scheme for the Mobility of University Students
ERDF. See European Regional Development Fund
Erhard, Ludwig, 5
ERM. See Exchange Rate Mechanism
ERM 11. See Exchange Rate Mechanism 11
ERT. See European Round Table of Industrialists
ERTA Case, 173
ESA. See European Space Agency; European
Surveillance Authority
ESC. See Economic and Social Committee
ESCB. See European System of Central Banks
ESDI. See European Security and Defense Identity
ESPRIT. See European Strategie Program for
Research and Development in Information
Technology
Essen Summit (December 1994),23,38,169,221,
391,438,459,513
Estonia, 21-23, 59,166,169,515. See also Baltic
States
ETSI. See European Telecommunications Standards
Institute
ETUC. See European Trade Union Confederation
EU. See European Union
EUI. See European University Institute
EURATOM. See European Atomic Energy
Community
EUREKA. See European Research Coordination
Agency
EURES. See European Employment Service
Euro, 141, 175, 156. See also Economic and
Monetary Union
Euro-Arab Dialogue (EAD), 175,341
Euro-Arab General Commission, 341
Eurobarometer, 366
Eurochambers. See European Association of
Chambers of Commerce and Industry
EURO-COOP. See European Community of
Consumer Cooperatives
Eurocorps,84,361-362
Eurocracy, 57, 64-65, 68, 106
EURODAC, 141, 175,314
Eurogroups, 291-293, 301
Euro-Mediterranean Partnership, 24, 97, 175-176,
336,343,411,432,513
EUROPA, 176
Europe Agreements, 22, 23, 31, 37, 38,40, 167, 176,
298,345,406,423,456,511,512. See also
Association Agreements; Central and Eastem
European States
European Agency for the Evaluation of Medicinal
Products (EMEA), 176--177,271-272
European Agricultural Guidance and Guarantee
Fund (EAGGF), 48, 67,73, 75, 88, 177,437
European Anti-Poverty Network, 292
European Association of Chambers of Commerce
and Industry (Eurochambers), 177
European Atomie Energy Community (EURATOM),

548

Index

177-178; and Action Committee for the United

States of Europe, 4; and Brussels, 28; and Council
of Ministers, 102; and energy policy, 163-164;
establishment of, 505-506; and European
Investment Bank, 204; and Robert Marjolin, 335;
and Merger Treaty, 179, 340; and Messina
Conference, 340-341; and Jean Monnet,
346-348; and research and technological
development policy, 403-404; and Paul-Henri
Spaak, 24, 429-430; and Treaty of Rome,
462-463
European Audiovisual Conference, 15
European Bank for Reconstruction and
Development (EBRD), 37,126,178,510,511
European Bureau of Consumers' Unions (BEUC),
98
European Center for Industrial Relations (ECIR),
178
European Center for Infrastructure Studies (ECIS),
179,221
European Center for Public Enterprises (CEEP),
425,426,471,472,483
European Center for the Development of Vocational
Training (CEDEFOP), 179
European Central Bank (ECB), 13,68, 143, 144,
147,179,157,185,224,228,240,294,326,465
European City ofCulture, 179,317
European Coal and Steel Community (ECSC),
179-182; and Action Comrnittee for the United
States of Europe, 3; and Konrad Adenauer, 6; and
Austria, 18; and Brussels, 28; and Cold War, 53;
and Common Market, 77, 86; and Council of
Ministers, 103; and Etienne Davignon, 117; and
Alcide de Gasperi, 121-122; development of,
182-183; and energy policy, 163-164;
establishment of, 505; and European Court of
Justice, 191, 193; and federalism, 232; and Walter
Hallstein, 261; and High Authority, 264; and
Luxembourg, 330; and Marshall Plan, 336; and
Merger Treaty, 340; and Jean Monnet, 346-347;
and research and technological development
policy, 403; and Schuman Plan, 252, 375,
416-417; and Treaty ofParis, 462; and United
States, 336, 474
European Coal and Steel Community (ECSC), 28,
121,182,331
European Commission. See Commission
European Committee for Standardization. See
European Standards Committee
European Communities. See European Community
European Community (EC), 153, 162, 182-186. See
also European Economic Community
European Community Action Scheme for the
Mobility of University Students (ERASMUS),
160,187,427,447
European Community Humanitarian Office
(ECHO), 41,137,187
European Community of Consumer Cooperatives
(EURO-COOP), 98

European Community Studies Associations

(ECSAs), 187
European Company, 187,227
European Company Statute (ECS), 187
European Conference, 515
European Confidence Pact on Employment. See
Confidence Pact on Employment
European Convention for the Protection of Human
Rights and Fundamental Freedoms, 188,
265-268,278
European Convention on Human Rights, 43,191,
192
European Cooperation in the Field of Scientific and
Technological Research (COST), 188
European Council, 184, 188-191,254; and
Comrnission, 58--60; and Common Foreign and
Security Policy, 83-84; and enlargement,
166-169; and environmental policy, 170-173;
and European Parliament, 211; and European
Political Cooperation, 217; launch of, 4, 254, 414,
441
European Council of Chemical Manufacturers
Federation (CEFIC), 292
European Court of Human Rights, 102, 191
European Court of Justice (ECJ), 191-194,517,
518; and audiovisual policy, 14; and budget, 30;
and Cassis de Dijon case, 35, 86, 193,400,435;
and Commission, 59, 60, 65, 68; and Common
Commercial Policy, 250; and Common Foreign
and Security Policy, 83, 465; and Common
Market, 86; and Competition Policy, 94; and
Council of Ministers, 106; and Court of First
Instance, 109; and Dassonville case, 172; and
differentiation, 137; and direct effect, 140, 192;
and environmental policy, 172-173; and ERTA
Case, 173; and European Council, 190; and
European Economic Area, 197, 199,202,224;
and European Parliament, 417; and European
Police Agency, 216; and EUROPOL Drugs
Unit, 228; and Franeovieh v. Italy case, 194,
273; and human rights, 265-267; and
immigration policy, 269, 270; and
implementation, 271-273; and infringement
procedures, 277; and integration theory, 283,
284,285,287,288; and Isoglucose case, 98,
119,212,301; and Justice and Horne Affairs,
313; origins of, 232; and preliminary ruling,
191, 192, 193,272,301; and reasoned opinion,
397; and single market prograrn, 422; and
subsidiarity, 440; and supremacy of European
Community law; 441-442; and transport policy,
460-461; Van Gend en Loos case, 42, 140
European Cultural Month, 317
European Currency Unit (ECU), 150, 175, 208, 508.
See also Hard ECU
European Defense Community (EDC), 195-196;
and Alcide de Gasperi, 121-122; and European
Defense Community Assembly, 195; failure of, 3,
6,26,28,181-182,217,232,340,417,463,505;

Index

and Pleven Plan, 417; and Western European

Union, 485
European Defense Community Assembly, 195
European Defense Industry Grouping (EDIG), 196
European Democratic Alliance, 471
European Development Fund (EDF), 30,196
European District, 28
European Econornic Area (EEA), 18,79,126, 167,
197-200,202,224,269,327,358,364,423,443,
444,445,511
European Economic Community (EEC), 200,
182-186; and Action Committee for the United
States ofEurope, 4; and Beyen Plan, 26, 355; and
Brussels, 28; and Cold War, 53-54; and Common
Agricultural Policy, 71; and Common Market, 85;
and Council of Ministers, 102, 104; development
of, 182-186; and energy policy, 163;
establishment of, 505-506; and European Atomic
Energy Community, 177-178; and European Coal
and Steel Community, 179-181; and European
Court of Justice, 191; and European Free Trade
Association, 201; and federalism, 232; and
General Agreement on Tariffs and Trade, 248; and
Robert Marjolin, 335; and Merger Treaty, 179,
340; and Messina Conference, 340--341; and Jean
Monnet, 346--348; and research and technological
development policy, 403; and Paul-Henri Spaak,
24, 178,429--430; and Treaty of Rome, 462--463;
and United States, 474
European Economic Interest Grouping (EEIG), 91,
200
European Econornic Space (EES), 197,202
European Economic Stability Pact. See Stability and
Growth Pact
European Electrotechnical Standards Comrnittee
(CENELEC), 200, 223, 434--435
European Employment Service (EURES), 200--201
European Energy Charter. See Energy Charter
European Environment Agency (EEA), 100, 170,
171,201,272,273
European Environment Information and Observation
Network,
170
European Federalist Movement, 433
European Federation of National Organizations
Working with the Homeless, 292
European Free Trade Area. See European Free Trade
Association
European Free Trade Association (EFTA), 18,79,
126,197,201-202,224,263,269,327,333,363,
442,443,510,511
European Information Centers (EICs), 202,423
European Investment Bank (EI), 14,37,46,47,
178,202-206,294,331,342,358,367,437,459
European Investment Fund (ElF), 204, 206, 459,
512
European Launch Development Organization, 223
European Liberal, Democratic, and Reformist Party
(ELDR), 206, 303

549

European MarketAccess Strategy. See Market

Access Strategy
European Model of Society, 206, 325
European Monetary Cooperation Fund, 148
European Monetary Fund, 207, 208, 262
European Monetary Institute (EMI), 32, 68, 127,
145,151,179,206,214,515
European Monetary System (EMS), 206--209; and
Common Agricultural Policy, 254-255; and
Jacques Delors, 125, 128; and Economic and
Monetary Union, 146--152; and Exchange Rate
Mechanism,26,31,99, 138, 150, 152, 156, 157,
159,207-209,228-229,454,466,512; and
Finland, 235; and France, 344; and Germany, 31;
and Valery Giscard d'Estaing, 254-255; and
Greece 515; and integration theory, 287; and
Ireland, 299; and Roy Jenkins, 309; launch of,
309,254-255,414,508; and 1992-1993 crises,
145, 146, 152, 157, 185,466; and Helmut
Schmidt, 414; and Single EuropeanAct, 418; and
United Kingdom, 26, 138, 185,472; and United
States,476
European Movement, 209-210, 282, 430
European Network of Forensic Science Institutes,
311
European Norms (ENs), 200, 223
European Parliament (EP), 210--216, 517, 518, 522;
and Bovine Spongiform Encephalopathy, 27; and
budget, 28, 29-31, 67, 131,210,211,212,213,
245; and bureau, 32; and Central and Eastern
European States, 37, 39; and cohesion, 47, 48;
comitology, 56--57; and Comrnission, 57-59,
65-68,210--214,298,411,417; and Committee
ofthe Regions (COR), 71; and Committee on
Institutional Affairs, 110, 141,508,509; and
Common Foreign and Security Policy, 83, 212,
216; and Council of Ministers, 102-104,
210--214; and Court of Auditors, 107-109; and
decisionmaking, 12-13, 16,45,49,96,100,117,
210,211,212,213,216,301,351; and
Declaration of Human Rights, 266; and
democratic deficit, 131-134; and direct elections,
2,4,19,135,140,184,210--211,309,325,356,
367,438,443,509,510,513; and Draft Treaty
Establishing the European Union, 110, 140, 141,
184,185,211,225,232,295,418,433--434,439,
509; and dual mandate, 141; and environmental
policy, 170; establishment of, 183; and Europe
Agreements, 176; and European Community law,
191-194; and European Council, 190,211; and
federalism, 232-233, 278; and Justice and Horne
Affairs, 212, 216, 311-313; and intergroups, 297;
and Ireland, 300; and Israel, 342; and national
parliaments, 13,96,99,351-355,483; and
ombudsman, 214, 365,465,514; and party
groups, 216, 471, 522; and rapporteur, 397; and
research and technological development policy,
403; and Russia, 408--409; and Sakharov Prize,
411; and social policy, 426; and Strasbourg,

550

Index

436--437; and transparency, 460; and Treaty on

European Union, 464-466; and Turkey, 468-469
European Parliamentary Union, 101
European Payments Union, 216
European People's Party (EPP), 216, 426
European Police Office (EUROPOL), 9, 194,
216-217,272,312-314,315,319,349
European Political Community (EPC), 182,
195-196,217,232,358
European Political Cooperation (EPC), 217-219;
and acquis politique, 2; and Cold War, 55; and
Committee of Permanent Representatives, 69; and
Common Foreign and Security Policy, 83; and
Conference on Security and Cooperation in
Europe, 264, 372; and Copenhagen Report, 100;
development of, 184-185,252; and Davignon
Report, 117; and Euro-Arab Dialogue, 175;
European Political Union, 465; and GenscherColombo proposals, 251,318; and Group of
Correspondents, 259; and human rights, 266; and
Ireland, 236, 300; and Latin America, 323; and
London Report, 330; and Middle East, 175,
341-343; and neutrality, 357; and Norway, 364;
and Ostpolitik, 376; and Russia, 407; and Single
European Act, 418; and Solemn Declaration on
European Union, 427; and South Africa, 428; and
Troika, 467; and United States, 476, 483; and
Venice Declaration, 341-342,483; and Western
European Union, 486; and Year ofEurope, 493
European Political Union (EPU), 219, 463, 465, 510
European Recovery Program (ERP). See Marshall
Plan
European Regional Development Fund (ERDF), 27,
46,48,67,82,219,398,437
European Research Coordination Agency
(EtntE~),219-220,403-404

European Rights Foundation, 266

European Round Table of Industrialists (ERT), 95,
179,220-222,226,275,291,292
European Secretariat of the Liberal, Independent,
and Social Professions (SEPLIS), 292
European Security and Defense Identity (ESDI), 56,
83,84,85,175,222-223,251,486--488,495
European Social Fund (ESF), 46, 67, 82, 223, 425,
437
European Space Agency (ESA), 11,223,
European Space Center, 11, 223
European Stability Pact. See Balladur Plan
European Standards Committee (CEN), 200,
223-224,434-435
European Strategie Program for Research and
Development in Information Technology
(ESPRIT), 117,224,344
European Surveillance Authority (ESA), 199,224
European System for the International Clearing of
Vacancies and Applications for Employment
(SEDOC), 201
European System ofCentral Banks (ESCB), 145,
224,229,465

European Telecommunications Standards Institute

(ETSI), 88, 225, 435
European Topic Centers, 201
European Trade Union Confederation (ETUC), 98,
225,292,425,426,471,483
European Trade Union Institute, 225
European Union (EU), 225-226
European United Left, 380
European University-Industry Forum, 221
European University Institute (EUI), 178, 226, 359
European Women's Lobby (EWL), 26-227, 292
European Works Councils (EWCs), 126, 127, 187,
227,425,433
European Youth Orchestra, 317
Europe by Satellite (EBS), 227
Europe Day, 227, 302, 417
Europe of Nations Group, 380
Europe of the Regions, 228
EUROPOL. See European Police Office
EUROPOLDrugs Unit, 228, 315
Eurosclerosis, 78,148,228,227,275,484
Euroskeptic,227,228,367-368,454,463,466,471
EUROSTAT. See Statistical Office of the European
Communities
Euro-X, 228. See also Economic and Monetary
Union
Euro Zone, 228. See also Economic and Monetary
Union
EWCs. See European Works Councils
EWL. See European Women's Lobby
Exchange Rate Mechanism (ERM), 26, 31, 99,138,
150,152,156,157,159,207-209,228-229,454,
466,512
Exchange Rate Mechanism ll, (ERM ll), 229
Export Enhancement Prograrn, 480
External Frontiers Convention, 229, 269
Falklands War, 322
Fascism,210
Federalism, 231-234, 278, 433-434, 438-441, 443
Federal Republic of Germany. See Germany
Fianna FM1, 299, 380
Fiat,220
Financial control, 2
Financial services, 420
Financial Times, 178
Fine Gael, 299
Finland, 234-236; accession of, 166,202,206,
234-235,298,411,437,460,479,511,512,513,
514; and Baltic Council, 21; and Central and
Eastern European States, 38; and cohesion policy,
50; and Common Foreign and Security Policy, 84;
and decisionmaking, 120, 395; and environmental
policy, 171-172; and European Economic Area,
197,199; and European Monetary System, 514;
neutrality of, 235, 357-358, 364; and Nordic
Council, 359; and Organization for Economic
Cooperation and Development, 369; and
presidency, 392; referendum in, 234,366,513;

Index

and Schengen Agreement, 413; and transpareney,

133, 460; and Western European Union, 486, 487
Fishler, Franz, 75
FitzGerald, Garret, 236
Flag, 236, 301
Flanders, 25, 367, 369
Flanking Measures, 236
Flexibility, 10, 139,236
Florenee Summit (June 1996),26,185,236-237,
257,459
Fontainebleau Declaration, 160
Fontainebleau Summit (June 1984),7, 140,141,
294,344,453,472,509
FORCE, 161
Ford Motor Company, 457
Forestry, 75, 237
Former Yugoslav Republie of Maeedonia. See
Maeedonia
Fortress Europe, 237, 249, 307
Forza Europa, 471
ForzaItalia,302-303,380
Fouehet, Christian, 237. See also Fouehet Plan
FouehetPlan, 24, 237, 217, 239, 349, 361, 506
Founding Aet on Mutual Relations, Cooperation,
and Seeurity, 262
Four Freedoms, 237. See also Single Market
Program
Framework Program for Research and Teehnologieal
Development, 160,213,237-238,275,403-405.
See also Research and Teehnologieal
Development Poliey
Franee, 238-244; and Bank of Franee, 45, 125; and
Canada, 33; and eohesion poliey, 46; and Cold
War, 52-54; and Common Commereial Poliey,
76, 78, 80; and Common Foreign and Security
Poliey, 84; and Common Market, 85-86; and
eontaet group, 99; and eore group, 96, 321; and
Couneil of Ministers, 104; decisionmaking, 120,
121,395; and Charles de Gaulle, 123-124; and
democratie defieit, 131-132; and Dunkirk Treaty,
142; and Economic and Monetary Union, 9,
144-145,149,151,207-209,434; and empty
ehair erisis, 69, 73, 123, 162-163, 184,261-262,
332,334,335, 395,405,430,480,506; and
Eurocorps, 175; and European Bank for
Reeonstruetion and Development, 178; and
European Coal and Steel Community, 179; and
European Court of Justiee, 194; and European
Defense Community, 3, 6,195-196,217,417,
463,505; and federalism, 231-232; and Fouehet
Plan, 237; and Gaullism, 3, 4, 54, 241,462; and
German~3-4,5-6,240-244,344-345;and

human rights, 265; and industrial poliey,

274-275; and infringement, 278; and
intergovernmental eonferences, 239, 241, 244,
249,352; and Japan, 306-307; and Lome
Convention, 328-330; and Fran,<ois Mitterrand,
343-345; MonnetPlan, 179, 180, 181,251,335,
347,349,415; and national parliament, 195, 196,
217,351,352,354,463; and NorthAtIantic

551

Treaty Organization, 360-362; and opposition to

EU, 367; and Organization for Econornie
Cooperation and Development, 369; and origins
ofEuropean integration, 81,183, 238, 375,
415-416,462-463,505; and presideney, 392;
referenda in, 240, 398, 512; and Schengen
Agreement, 412-413; and subsidiarity, 441; and
Western European Union, 485, 487; and World
War 11, 346-347
Franeovieh v. ltalyease, 194,273
Frankfurter Allgemeine Zeitung, 495
Fraud, 2, 30, 113, 194,245,411
Free Democrats, 318
Freedom and Demoeratie Party (Netherlands), 356
Free Freneh, 180, 347
Free Trade Area (FTA), 154, 197, 198
Free Trade Area of the Amerieas (FTAA), 323
Freiheit Partei sterreich. See Austrian Freedom
Party
Freneh Committee of National Liberation (CFLN),
347
Freneh Modernization Plan. See Monnet Plan
Friendship, Cooperation, and Mutual Assistanee
Treaty,234
Friends of the Earth, 292
FTAA. See Free Trade Area of the Americas
Funetionalism,245,278
G5,306
G7, 36,221,247,254,277,370, 387,388,406,409,
510,513
G8, 247, 409
G24,36,247,388,477
G77,328
Garrett, Geoffrey, 280
GATT. See General Agreement on Tariffs and Trade
Gaullism, 3,4,54,241,462. See also De Gaulle,
Charles
Gaullists, 380
Gazprom, 409
General Affairs Council, 90, 217, 247, 490, 494
General Agreement on Tariffs and Trade (GATT),
76-80,247-250,489-491; and China, 41; and
Common Agrieultural Poliey, 74, 128,480-481;
and Common Commercial Poliey, 77-78; and
eompetition poliey, 94; DiIlon Round of, 81, 85,
248; and Elysee Treaty, 162; and European
Parliament, 213; and European Round Table of
Industrialists, 222; and Generalized System of
Preferenees, 79; and Japan, 305; Kennedy Round
of, 8, 78, 81, 85,248,306,480; and Partnership
and Cooperation Agreements, 89; and Preferential
Trade Agreements, 430; and Russia, 407; Tokyo
Round of, 81, 85, 248, 306, 480; and United
States, 477-480; Uruguay Round of, 14, 17,74,
80,81,85,222,239,248,334,365,371,451,
478,480-481,489-491,509,512; and World
Trade Organization, 489-491
General Agreement on Trade in Services (GATS),
17,489

552

Index

Generalized System of Preferenees (GSP), 22, 79,

80,322,429
Genscher, Hans-Dietrich, 144, 145,218,250--251,
376,414,427,494
Genscher-Colombo Proposals, 140, 141, 185,218,
251,294,418,427,434,508
Georgia,90
German Central Bank. See Bundesbank
German Constitutional Court, 43, 254, 326,466
German Democratic Republie. See East Germany
Germany, 251-254; and Konrad Adenauer, 5-6;
and Willy Brandt, 27; and budget, 130; and
Bundesbank, 31-32; and Central and Eastern
European States, 37; and eohesion policy,
46--50; and Cold War, 52-53; and Common
Foreign and Security Policy, 84; and
Commonwealth of Independent States, 90; and
contact group, 99; and core group, 96, 262, 321;
and Council of Ministers, 104; and
decisionmaking, 120, 121, 138,395; and
Charles de GauBe, 123-124; and democratic
deficit, 132; and Economic and Monetary
Union, 143-146, 149, 151, 156,207-209,287,
434; and environmental policy, 171-172; and
Eurocorps, 175; and European Coal and Steel
Community, 179; and European Court of
Justice, 35, 194; and European Defense
Community, 195-196; and European
Parliament, 211; and European Police Agency,
216,217; and federalism, 231, 232, 295, 438;
and finaneial services, 88; and Fouchet Plan,
237; and France, 3-4, 5-6, 240--244, 344-345;
founding of Federal Republie, 5, 375; and G7,
247; and General Agreement on Tariffs and
Trade, 249, 250; and Walter Hallstein, 261-262;
and human rights, 265, 266; and immigration,
269; and implementation, 272; and
infringement, 278; and intergovernmental
conferenees, 343; and Israel, 5; and Japan, 306;
and Joint Research Centers, 404; and Helmut
Kohl, 317-319; and Latin America, 323; and
Lome Convention, 328-330; and MarshaB Plan,
336; and national parliament, 351, 352; and
North Atlantie Treaty Organization, 360; and
Organization for Eeonomie Co operation and
Development, 369; and origins of integration,
183,238,251-252,462,505; and Ostpolitik,
27,54,250,252,261,375,389; rearmament of,
6,28, 195-196; and Russia, 407-409; and
Schengen Agreement, 412-413; and Helmut
Sehrnidt, 414; and Slovenia, 423; and South
Afriea, 428; and Switzerland, 444; and
telecommunieations policy, 447-452; and
Trans-European Networks, 97; and Treaty on
European Union, 253-254, 297; unifieation of,
54-55,126,186,209,219,241,253,282,295,
297,318-319,344-345,368, 463,510,511; and
United States, 479-480; and Yugoslavia, 494
Gibraltar, 229, 269, 314

Giraud, Henri, 347

Giseard d'Estaing, Valery, 150, 184,207,243,253,
254-255,256,318,335,414,440,455
Global Approach, 435
Global Mediterranean Poliey, 337, 341-342
Goldman Sacks International, 457
Goldsmith, James, 367, 463
Gonzalez, Felipe, 17,45,49,50,130,255,358,457,
514
Gorbaehev, Mikhail, 101,251,387,407
Gradin, Anita, 245
Greece, 256--258; aeeession of, 166, 185,204,256,
309,333,334,337,437,452,508; and eohesion
poliey, 45-50; and Cyprus, 113; and
decisionmaking, 120,395; and energy poliey,
169; and environmental poliey, 171-172,273;
and European Center for the Development of
Vocational Training, 179; and European Couneil,
190; and European Monetary System, 515; and
infringement, 278; and Integrated Mediterranean
Programs, 278; and North Atlantic Treaty
Organization, 360; and Organization for
Economic Cooperation and Development, 369;
and Andreas Papandreou, 379; and Schengen
Agreement, 413; and Single EuropeanAct, 418;
and telecommunications poliey, 447; and tourism
poliey, 456; and Western European Union, 486;
and Yugoslavia, 494
Green Alternative Link, 366
Green currencies, 258
Greenland,258-259,397,509
Green paper, 259, 449
Green Party (Germany), 172
Greenpeace, 292
Greens, 302, 366,367, 368
Group of coordinators, 259
Group of correspondents, 259
Guardian, 133,460
Guatemala, 411
Guigou, Elisabeth, 296, 398
Guigou Report, 144
Gulf Cooperation Council, 259
GulfWar, 175,218,259,342,464,476-477,486
Guyana, 223
Gyllenhammar, Pehr, 220
Gymnich Meeting, 217, 259,
Haas, Ernest, 279, 280, 283, 355
Hague Congress. See Congress of Europe
Hague Platform, 261, 486
Hague Summit (Deeember 1969), 27, 148, 184,217,
263,376,
507
Haiti, 83, 88, 323
Halifax, Lord, 347
Hallstein, Walter, 69, 123, 183,253,261-262,340,
358,416,506
Hallstein Doctrine, 376
Hanover Summit (June 1988), 130, 424
Hard eore, 262. See also Differentiated integration

Index

Hard ECU, 262

Hannel Report, 360
Hannonization, 177, 193, 198,420-421,435
Haughey, Charles, 510
Havana Charter, 248
HDTV. See High-defInition television
Health policy, 9, 262-263
Heath, Edward, 263-265, 472, 488
Helms-Burton Act. See Libertad Act
Helsinki Accords. See Helsinki Final Act
Helsinki Final Act, 22, 40, 54, 264, 372, 494
Helsinki 11. See Charter of Paris for a New Europe
Hierarchy of Norms, 264
High Authority, 3,103,178,179,180,181,183,
191,232,264,331,340,348,369,416,417,433,
462
High-defInition television (HDTV), 220
High Level Group of Experts on the Common
Foreign and Security Policy, 264
High Representative (for the Common Foreign and
Security Policy), 84, 107,244,466
Historical institutionalism, 283-284
Hoffmann, Stanley, 280, 282
Holbrook, Richard, 257, 495
Honduras, 411
Hong Kong, 12,41
Hopkins, Harry, 347
Horizon 2000,137,264
House of Commons, 453
House of Lords, 109,454
Howe, Geoffrey, 472
Human rights, 8, 22, 40, 41, 43,133,167,188,
265-268,411,465
Hungary, 22, 36-37, 40, 58, 59, 126, 166, 169,268,
360,362,369,385,388,406,407,483,487,510,
511,515. See also Central and Eastern European
States
IBe. See Integrated Broadband Communication
Iceland, 21,197,198,200,201,269,359,360,413,
421,486
IFOR. See Implementation Force
IGe. See Intergovemmental Conference
IMF. See International Monetary Fund
Immigration policy, 9,141,229,269-271,313,314,
315
Implementation, 68, 271-273, 422
Implementation Force (IFOR), 84, 385-386,
495-496
IMPs. See Integrated Mediterranean Prograrns
Indonesia, 12, 13
Industrial policy, 274--277
Industrial Research and Development Advisory
Committee (IRDAC), 277
Information society, 277
Infringementprocedures,272-273,277-278
Institute for Advanced Materials, 310
Institute for European Affairs, 300
Institute for International Affairs, 433
Institute for Prospective Technological Studies, 310

553

Institute for Remote Sensing Applications, 310

Institute for Transuranium Elements, 310
Institute of European-Latin American Relations
(IRELA), 323
Institute of Safety Technology, 310
Integrated Broadband Communication (IBC), 7
Integrated Mediterranean Prograrns (IMPs), 46
Integration Theory, 278-291
Interest Groups, 291-294
Intergovemmental Conference (IOC), 118, 167,
294--297; 1950 IOC, 505; 1955-1956 IOC, 28,
178,429,462,505; 1985 IOC, 47,141,185,
294--295,343,379,418,509; 1991IGC, 12, 13,
31-32,58,70,71,125,126,127,144,145,146,
151,186,216,218,221,225,251,259,262,
295-296,319,331,352,354,355,356,359,432,
463-464,466,510--511; 1996-1997 IOC, 8, 13,
25,30,38,58,84,104--105,113,115,121, 131,
137,139,167,168,169,216,221,226,235,236,
241,244,253,264,270,296-297,300,301,313,
314,324,334,353,354,355,387,398,411,433,
443,477-488,513,514
Intergovemmentalism, 105, 118, 139,297,280
Intergroups, 297
Interim agreement, 297-298
Interinstitutional agreements, 298
International Committee of the Movements for
European Unity, 374
International Electrotechnical Committee, 200, 224
International Energy Agency, 370
International Monetary Fund (IMF), 90, 149, 178,
328,389,406,430,490
International Ruhr Authority (IRA), 298, 347, 375,
415
International Standards Organization (ISO), 224
International Telecommunications Union, 451
International Trade Organization (ITO), 248, 489
Internet, 176, 277
Intervention, 298
Intifada, 342
Investiture, 298
Ioannina Compromise, 121,296,298-300,395,512
IRA. See International Ruhr Authority
Iran, 341, 457, 481
Iran-Libya Sanctions Act, 481
Iraq,341
IRDAe. See Industrial Research and Development
Advisory Committee
IRELA. See Institute ofEuropean-Latin American
Relations
Ireland, 299-301; accession of, 197, 166, 184,299,
389,506-507; and cohesion policy, 45, 46, 49,
130; and Common Agricultural Policy, 299-300;
and Common Fisheries Policy, 81; and Common
Foreign and Security Policy, 84; and
decisionmaking, 120,395; and environmental
policy, 171,273; and European Court of Justice,
193; and European Monetary System, 208; and
Garret FitzGerald, 236; and immigration policy,
269; and infringement, 278; and national

554

Index

parliament, 351; and neutrality, 218, 236, 300,

357,367; and Organization for Economic
Cooperation and Development, 369; and
presidency, 140,392; and referenda, 300, 366,
367, 397-398,418,509; andSchengen
Agreement, 412, 414; and telecommunications
policy, 447; and tourism policy, 456; and United
Kingdom, 299-301; and Western European
Union, 486, 487
Islarnic Welfare Party (Turkey), 468-469
ISO. See International Standards Organization
Isoglucose Case, 98, 119,212,301
Israel, 5, 23,175,213,336,337,341
Italy, 301-304; and Giulio Andreotti, 11; and Central
European Initiative, 40; and cohesion policy, 46;
and Common Market, 85-86; and Conference on
Security and Cooperation in the Mediterranean,
97; and core group, 262, 321; and
deeisionmaking, 120, 395; and Aleide de Gasperi,
121-122; and Economic and Monetary Union,
147, 151, 152,287; and environmental policy,
171-172; and European Defense Community,
195-196; and European Monetary System,
207-208; and federalism, 231, 295; and G7, 247;
and General Agreement on Tariffs and Trade, 249;
and human rights, 265; and infringement, 278;
and Japan, 80, 306, 307; and Joint Research
Centers, 404; and North Atlantic Treaty
Organization, 360; and Organization for
Economic Cooperation and Development, 369;
and origins of European integration, 416; and
presidency, 144,392; and SchengenAgreement,
413; and tourism policy, 456; and Western
European Union, 485
ITO. See International Trade Organization
Japan, 12,33,35,41,80, 185,220,224,274,276,
293,294,305-309,369,395,403,404,407,476,
478
Jenkins,Roy, 149, 184, 185,207,309,358,375,
405,433,454,473
JHA. See Justice and Horne Affairs
Joint Action, 309-310, 314, 428
Joint EU-U.S. (Transatlantic) Action Plan, 17,358,
457,477,514
Joint Research Centers (JRCs), 64,310,404
Jordan, 23, 79,342,343
Jospin, Lionel, 240
JOULE, 310
JRCs. See Joint Research Centers
Justice and Horne Affairs (JHA), 310-316; and
Amsterdam Treaty, 8, 316; and Commission, 57;
and Committee of Permanent Representatives, 67;
and Council of Ministers, 102, 105;
deeisionmaking, 117, 118, 120,311-316,357,
471; and Dublin Convention, 141-142,269,314;
and European Council, 188, 189; and European
Court of Justice, 194; and European Economic
Area, 197; and European Parliament, 132,212;
and European Police Office, 216--217; and

External Frontiers Convention, 229, 269; and

Group of Coordinators, 259; and human rights,
266; and immigration policy, 6, 269-271; and K.4
Committee, 69, 259, 311, 313, 317; and national
parliaments, 352-354; and passerelle, 383; and
presidency, 392; and Treaty on European Union,
186,219,225,295,387,464-465; and Trevi
Group, 69, 259, 310, 467; and United Kingdom,
216,314,472
Jumbo Council, 250
Juncker,Jean-Claude,331
June 2 Movement, 368
K.4 Committee, 69, 259, 311, 313, 317
KALEIDOSCOPE, 111, 179,317
Kangaroo Group, 317
Kantor, Mickey, 457
Karadic, Radovan, 493
Karamanlis, Konstantinos, 256
KAROLUS, 317
Kazakstan, 89,90
Kennedy administration, 475
KennedyRound, 78, 81, 85, 248, 306
Keohane, Robert, 280
Keynesianism, 125,208,344
Kiesinger, Kurt, 262
KinkeI, Klaus, 478
Kinnock, Neil, 473
Kirchberg Declaration, 317
Kissinger, Henry, 493
Klaus, Vaclav, 115
Kohl, Helmut, 317-319, 251-253; and budget, 130;
and cohesion policy, 48,50; and Jacques Delors,
58, 127; and Economic and Monetary Union, 144,
145,185, 186,240; and enlargement, 166; and
European Political Union, 219; and federalism,
232; and German unification, 55, 186; and
Fran~ois Mitterrand, 253; and Treaty on European
Union, 127,427,463,464
Kohnstamm, Max, 3, 4
Korea, 12, 13,41, 195,276,369
Korean War, 6,195,348,360
Koschnik, Hans, 349-350, 493
Krag, Jens Otto, 135
Kuchma, Leonid, 90
Kuwait, 259, 341
Kyrgyzstan,90
Labour Party (Ireland), 299
Labour Party (Malta), 334
Labour Party (UK), 118,228,303,309,367,453,
472,473
Lafarge Coppe, 220
Lamers, Karl, 321
Lamers Paper, 321
Languages, 211
LatinAmerica,79, 187,321-324,432,511
Latin American Economic System (SELA), 322
Latin American Free Trade Association (LAFTA),
322

Index
Latvia, 21-23, 385, 388. See also Baltic States
League of Nations, 209, 278, 346
Lebanon,23,79,336,337,342
Legal instrument, 324
Lega Nord, 380
Legitimacy, 2, 134, 226, 324-327
Lend Lease, 347
Leo XIll, 438
LEONARDO DA VINCI, 85, 161,327,387
Liberal, Democratic, and Reformist Party. See
European Liberal, Democratic, and Reformist
Party
Liberal intergovernrnentalism, 280--281, 282-288
327
'
Liberal Party (Austria), 18
Libertad Act, 457, 481
Libya,457,481
Liechtenstein, 197,202,327
LIFE,327
Liikanen, Erkki, 245
Lindberg, Leon, 283, 386
LINGUA, 160,327,427,447
Lisbon Summit (June 1992),50,130,494,511
Lithuania, 21-23, 166,385,388,514. See also
Baltic States
Lobbying, 291-294. See also Interest Groups
Lockheed Martin, 11
Lome Convention, 7, 30, 79, 137, 187,322,323,
328-330,376-377,429,462,493,508
London Report, 218, 330
Long March rocket, 11
Lothian, Lord, 231
Lubbers, Ruud, 163, 298,464
Luns, Joseph, 237, 355
Luxembourg, 330--332; and Belgium-Luxembourg
Economic Union, 24; and Benelux, 25, 78, 113,
137,269,295,367,373,375,415,416,485;and
Brussels Treaty, 28, 142; and citizenship, 43; and
Common Market, 85; and decisionmaking, 120,
395; and Economic and Monetary Union, 149;
and empty chair crisis, 262; and establishment of
European Community, 183,373,505; and
Eurocorps, 175; and European Coal and Steel
Community, 179; and European Defense
Community, 195; and European Monetary
System, 208; and European Parliament, 211; and
European Political Community, 217; and
infringement, 278; and 1991 intergovernrnental
conference, 464; and Organization for Econornic
Cooperation and Development, 369; and
presidency, 392; and Jacques Santer, 411-412;
and Schengen Agreement, 412-413; and Robert
Schuman, 414-415; and telecommunications
policy, 447; and Gaston Thorn, 454-455; and
tourism policy, 456; and Western European
Union, 485
Luxembourg Compromise, 69, 104, 124, 162-163,
184,239,262,332,506
Luxembourg Declaration, 202, 411
Luxembourg Process, 197

555

Luxembourg Summit (December 1997), 228, 434, 469

Lyonnaise des Eaux, 221
Maastricht 11, 8
Maastricht Summit (December 1991),45,49, 127,
130,145,186,187,218,295-296,333,392,424,
425,427,454,463,472,511
Maastricht Treaty, 333. See also Treaty on European
Union
Macedonia,40, 257, 333,379,388,494
Macmillan, Harold, 201, 263, 282, 333,471,488
MacSharry,Ray,333-334
MacSharry Plan, 333-334
MacSharryReforms,39,73-74,333-334
Madagascar, 506
Mad cow disease. See Bovine Spongiform
Encephalopathy
Madeira, 376
Madrid Peace Conference, 342
Madrid Summit (December 1995), 21, 31,167,169,
175,205,428,514
Madrid Summit (June 1989), 130, 144, 151, 185
Maghreb, 79
MAGP. See Multi-Annual Guidance Program
MAI. See Multilateral Agreement on Investment
Majone, Giandomenico, 288, 425
M~o~John,26, 186, 187,227,264,424,425,427,
454,463,464,472,494
Majority voting. See Decisionmaking; Qualified
majority voting; Unanimity
Malaysia, 12, 13
Malfatti, Franco, 334, 358, 507
Malta, 24, 38,166,167,175,296,334,336,337,
338,339,511
Mandela, Nelson, 428
Mansholt, Sicco, 183,334-335,358
Mansholt Plan, 335
Marie, Andre, 415
Marjolin,Robert,45,76,183,261,335,455
Market access strategy, 335
Marshall, George, 336
Marshali Plan, 48, 52, 53,121,130,216,336,347,
363,369,371,374,475
Martino, Gaetano, 303
Mauritius, 328
MCAs. See Monetary Compensatory Amounts
McCloy, John, 180, 181,346
McDonnell Douglas, 8
McDougall Report, 439
MCI,451
Meade, James, 77
MED 12,24,97,175,336-339
MEDA,336
MEDIA, 14-18
MEDIA 11, 111
Mediterranean Free Trade Area, 24, 175
Mediterranean policy, 203-205, 336-340
Member states, 340. See also Austria; Belgium;
Denmark; Finland; France; Germany; Greece;

556

Index

Ireland; Italy; Luxembourg; Netherlands;

Portugal; Spain; Sweden; United Kingdom
Mendes-France, Pierre, 347
MERCOSUR, 323, 340, 432
Merger Control, 340
Merger policy, 68, 87, 93
Merger Task Force, 68, 340
Merger Treaty, 69, 340, 506
Messina Conference, 4,182,201,330,331,340,
429,505
Mexico, 12, 155,322,323,405,411
MFN. See Most-favored nation
Middle East, 83, 184, 189,217-219,228,258,
341-343,337,469,475,476,483
Middle East War. See Arab-Israeli War
Milan Summit (June 1985), 11, 141, 185, 189, 190,
294,343,509
Mill, John Stuart, 438
Milosevic, Slobodan, 494, 495
Mitrany, David, 245, 278-279
Mitsotakis, Konstantinos, 256
Mitterrand, Fran~ois, 343-345; and Charles de
Gaulle, 124, 162; and Jacques Delors, 125, 127;
and Draft Treaty Establishing the European
Union, 232; and federalism, 232; and Economic
and Monetary Union, 144, 145, 185; and
European Bank for Reconstruction and
Development, 178; and European Monetary
System, 150; and European Parliament, 239;
and European Political Union, 219; and
European Round Table of Industrialists, 220;
and Fontainebleau Summit, 7, 236; and
Germany, 240-243; and Felipe Gonza1ez, 253;
and history of European integration, 238; and
Helmut Kohl, 253, 318; and North Atlantic
Treaty Organization, 362; and Single European
Act, 239; and single market program, 239; and
Treaty on European Union, 127,239,463; and
Yugoslavia, 494
Mixed agreements, 345
Moldova, 89, 90
Molitor Group, 345
Mollet, Guy, 348, 359
Monetary Committee, 69, 464
Monetary Compensatory Amounts (MCAs), 258,
346
Mongolia,89,447
Monnet, Jean, 238, 346--349; and Dean Acheson 2;
and Action Committee for the United States of
Europe, 3-4; and Konrad Adenauer, 6; and
EuropeanAtornic Energy Community, 177, 182,
341; and European District, 28; and federalism,
231-232; and High Authority, 264, 340; launch of
European Coal and Steel Community, 179-181,
374-375; and Monnet Method, 24, 129, 279; and
MonnetPlan, 125, 179, 180, 181,251,335,347,
349,415; and Schuman Plan, 2,179,180,195,
252,261,298,331,347-348,375,416,429;and
Paul-Henri Spaak, 3; and United States, 346

Monnet method, 166, 349

MonnetPlan, 179, 180, 181,251,335,347,349,415
Monod, Jerme, 221
Monteiro, Manuel, 390
Montenegro, 487
Montreal Protocol, 170, 173
Moravcsik, Andrew, 280
Morocco,24,82,213,249,271,336,337
Moscow Memorandum, 18
Mostar, 83, 349-350,495. See also Yugoslavia
Most-favored nation (MFN), 22, 41, 77, 248
Movement Republicain Populaire (MRP), 196,303,
415
MRAs. See Mutual Recognition Agreements
MRP. See Movement Republicain Populaire
Multi-Annual Guidance Program (MAGP), 82
Multi-Fibre Agreement, 85
Multilateral Agreement on Investment (MAI), 371
Multi-speed Europe, 138. See also Differentiated
integration
Multistate drug application procedure, 401
Mussolini, Benito, 121,231
Mutual recognition, 35, 39, 401, 422, 435
Mutual Recognition Agreements (MRAs), 436
NACC. See North Atlantic Cooperation Council
NAFTA. See North American Free Trade Agreement
National Alliance (Italy), 302, 380
National Assembly, 195, 196, 217, 463
National Economic Development Organization, 275
National Front (Belgium), 380
National Front (France), 380
Nationalist Party (Malta), 334
National parliaments, 13, 19,96, 132,214-215,
351-355,393,483
Nationalrat, 19,353
NATO. See North Atlantic Treaty Organization
Nazi Germany, 5
NCI. See New Community Instrument
Nenni Socialists, 3
Neofunctionalism, 279, 282, 355
Netherlands, 355-357; and Benelux, 24, 25, 78, 113,
137,269,295,367, 373,375,415,416,485; and
Beyen Plan, 26, 182,462; and Black Monday, 26,
511; and Brussels Treaty, 142; and budget, 356;
and citizenship, 43; and cohesion policy, 50-51;
and Common Market, 85; and decisionmaking,
120,395; and democratic deficit, 131-132; and
Econornic and Monetary Union, 149; and empty
chair crisis, 262; and Energy Charter, 163,409,
513; and environmental policy, 35,171; and
establishment of the European Community, 183;
and European Coal and Steel Community, 179;
and European Defense Community, 195; and
European Political Community, 317; and
European Monetary System, 208; and federalism,
231; and Fouchet Plan, 24; and Germany, 357;
and implementation, 272; and infringement, 278;
and intergovemmental conferences, 26, 355,464,
511; and Joint Research Centers, 404; and Justice

Index
and Horne Affairs, 312; and national parliament,
351-352; Organization for Economic
Cooperation and Development, 369; and origins
of European integration, 393, 505; and
presidency, 26,186,296,511; and Schengen
Agreement, 412-413; and telecommunications
policy, 451; and Western European Union,
485
Netherlands AntilIes, 294
Neutrality, 357-358; Austrian, 18-19,357-358; and
Common Foreign and Security Policy, 84; lrish,
218,236,300,357,367; Finnish, 235, 357-358;
Swiss, 18,357-358,444; Swedish, 357-358
New approach, 435
New Atlantic Charter, 493
New Commercial Policy Instrument, 358
New Community Instrument (NCI), 358
New Deal, 181,245,279
New Democracy Party (Greece), 256
New European Peace and Security System (NPSS),
384--386
New Transatlantic Agenda (NTA), 17,85,223,358,
457,458,477,478,514
New York University, 101
New Zealand, 12, 13,263,369
Nicaragua, 411
Nigeria, 83, 88
Nine,358
1992 Program. See Single Market Program
Nixon Shock, 34,149,305,476
Noel, Emile, 358-359
Nomination procedure, 359
Noncompulsory expenditure, 29-30, 95
Non-govemmental organizations (NGOs), 214, 341,
367,368
Nonpaper, 359
Non-Tariff Barriers (NTBs), 78, 79, 86, 87,
305-306. See also Single Market Program
Noordwijk Declaration, 359
Nordic Council, 21,138,359
North American Free Trade Agreement (NAFfA),
34,155,323
North Atlantic Cooperation Council (NACC), 359,
384
North Atlantic Treaty, 142
North Atlantic Treaty Organization (NATO),
360-362,384,430; and Austria, 19; and Baltic
States, 23; and Bosnia, 385-386; and Canada, 33;
and Central and Eastern European States, 483;
and Combined Joint Task Forces, 56; and
Common Foreign and Security Policy, 84;
enlargement of, 55, 167; establishment of, 2, 6;
and European Defense Community, 195-196; and
European Security and Defense Identity, 223; and
France, 124,241,242,244,453;andGermany,6,
27,252,318,376,414,505; andGreece, 257; and
Italy, 121-122; and North Atlantic Cooperation
Council, 359; and neutrals, 357; and Norway,
363; origins of, 373; and Partnership for Peace,
380; and Poland, 388; and Russia, 406; and

557

Spain, 355,431; and Sweden, 442-443; and

Turkey, 467, 469; and Western European Union,
261,317,386,485-488; and United States, 475,
477; and Yugoslavia, 385-386,495-496
Northern Ireland, 71
Northern Italy, 367, 369
North Sea, 81, 82
Norway, 362-364; and Baltic Council, 21; and
Common Fisheries Policy, 81; and Econornic and
Monetary Union, 149; and environment policy,
201; and European Econornic Area, 197-198;
membership application of, 184,506,507,512;
and Nordic Council, 359; and North Atlantic
Treaty Organization, 360, 442; and Organization
for Economic Cooperation and Development,
369; referenda in, 363-364; and Schengen
Agreement, 421; and Western European Union,
486
NPSS. See New European Peace and Security
System
NTA. See New Transatlantic Agenda
NTBs. See Non-tariff barriers
Nuclear Nonproliferation Treaty, 83
NYNEX,451
OAS. See Organization of American States
Occupied Territories, 341. See also Palestine
OCTs. See Overseas Countries and Territories
"Ode to Joy," 11
OECD. See Organization for Econornic Cooperation
and Development
OEEC. See Organization for European Economic
Cooperation
Office for Harmonization in the Internal Market:
Trademarks, Designs, and Models. See
Community Trademark Office
Office for Official Publications of the European
Communities, 365
Office ofTelecommunications (OFfEL), 450-451
Official Journal ofthe European Communities (OJ),
108,200,313,316,365
OFTEL. See Office of Telecommunications
Olivetti, 220
Oman,259
Ombudsman,214,365,465,514
Omnibus Trade Act, 490
113 Committee, 67, 69, 78, 365, 490
Open Network Provisions (ONP), 366,450
Open Network Provisions Comrnittee, 450
Openness. See Transparency
Opinion, 366
Opposition movements, 136, 366-369
Opt out, 138, 369
Oreja, Marcelino, 296, 398
Organization for Economic Cooperation and
Development (OECD), 247, 299, 369-371, 372,
430,443,450,467
Organization for European Economic Cooperation
(OEEC), 18,52,53,76,335,336,369,371-372,
374,429,430

558

Index

Organization for Security and Cooperation in

Europe (OSCE), 39,167,234,235,264,359,372,
384-385,406,409,477,495,519
Organization of American States (OAS), 323
Organization of Petroleum Exporting Countries
(OPEC), 507
Organized European Space. See European Model of
Society
Ortoli, Fran~ois-Xavier, 179, 309, 358, 375
OSCE. See Organization for Security and
Cooperation in Europe
Oslo Peace Process, 342
Ostpolitik, 27, 54, 250, 252, 261, 375, 389
Outermost regions, 376
Overseas countries and territories (OCTs), 376-377
Owen, David, 496
Own resources, 29, 131,377
Pact on Stability in Europe. See Balladur Plan
Padania, 367
Padoa-Schioppa, Tommaso, 379, 439. See also
Padoa-Schioppa Report
Padoa-Schioppa Report, 47-48,379
Palestine, 24,175,341-342
Palestine Liberation Organization (PLO), 341-342,
483
Palma Doctrine, 310
Palme, Olaf, 442
Panama, 322,405,411
Pan Europa, 100,209,210
Papandreou, Andreas, 256-257, 343, 379
Papandreou, Vaso,256
Papua New Guinea, 12
Paraguay, 405
Paris Peace Conference, 121
Paris Sumrnit (October 1972), 219, 225, 379, 485,
507
Paris Summit (December 1974), 188,217,507
Paris Treaty. See Treaty of Paris
Parliamentary assizes. See Assizes
Partnership and Cooperation Agreements (PCAs),
88-90,380,408-409
Partnership for Peace (PfP), 235, 362, 380, 384, 443
Party groups in the European Parliament, 206, 227,
380-383,522
Party of the European Socialists (PES), 303,
380-382,383,390,426
Pasqua, Charles, 243
Passerelle, 270, 351, 383
Passport, 383-384
PCAs. See Partnership and Cooperation Agreements
Peacekeeping, 56, 384-386
People's Party (Portugal), 390
Permissive consensus, 386
Pershing missiles, 318
Peru, 10, 405
PES. See Party of the European Socialists
Petain,Philippe,415
Petersberg Declaration, 386-387, 486
Petersberg tasks, 10

PETRA, 161,387
Peugeot, 293
PfP. See Partnership for Peace
PHARE (Pologne et Hungrie: Actions pour la
Reconversion Economique), 21, 36-37, 168, 177,
257,336,387,388,406,458
Philippines, 12, 13
Philips,220,355
PHILOXENIA, 456
Pillars, 387. See also Treaty on European Union
Pius Xl, 438
Platform on European Security Interests. See Hague
Platform
Pleven, Rene, 195,217,348,505. See also Pleven
Plan
Pleven Plan, 417
Phl, Hans-Otto, 126
Poland,21, 22, 36-37,40, 58, 59, 126, 166, 169,
360,362,369,385,387-388,406-407,412,483,
510,511,515 . See also Central and Eastern
European States
Polaris missiles, 333
Political committee, 217, 218, 388
Political spring (Greece), 380
Political Union. See European Political Union
Pologne et Hungrie: Actions pour la Reconversion
Economique (PHARE), 21, 36-37, 168, 177,257,
336,387,388,406,458
Pompidou, Georges, 124, 184,239,253,261,263,
331,376,379,388-389,485
Poos,Jacques,331,496
Popular Republican Movement. See Movement
Republicain Populaire
Portugal, 389-391; accession of, 79, 80,166, 185,
204,344,418,434,437,508-509; cohesion policy,
45-50,79,130; and Common Fisheries Policy, 82;
and decisionmaking, 120,395; and Economic and
Monetary Union, 152; and environmental policy,
171-172, 272; and European Free Trade
Agreement, 201; and European Monetary System,
208; and European Parliament, 380; and
infringement, 278; and Mediterranean policy, 337;
and national parliament, 351; and North Atlantic
Treaty Organization, 360; and Organization for
Economic Cooperation and Development, 369; and
presidency, 14,392; and relations with Latin
America, 321-323; and SchengenAgreement, 413;
and single market program, 307; and SouthAfrica,
428; and telecommunications policy, 447, 449; and
Western European Union, 486
Preaccession strategy, 391. See also Central and
Eastern European States
Preferential trade agreements (PTAs), 391, 430-431
Preliminary ruling, 191, 192, 193,272. See also
European Court of Justice
Presidency, 392. See also Council of Ministers;
European Council
Proportionality, 392, 440
Protocol, 392-393

Index
Proton rocket, 11
Proximity. See Closeness
PTAs. See Preferential trade agreements
Qatar,259
QMV. See Qualified majority voting
QRs. See Quantitative restriction
Quaestor, 382, 395
Qualified majority voting (QMV), 24, 104-105, 119,
120,124,126,131,239,253,318,325,395,418;
and empty chair crisis, 162-163; and loannina
Compromise, 298-299; and Amsterdarn Treaty, 8,
10
Quantitative restriction (QRs), 77, 78, 80
Quebec,33
RACE. See Advanced Communications
Technologies for Europe
Rally for the Republic (RPR), 243
Ramadier, Paul, 415
RAP~L, 111,397
RAPID, 397
Rapporteur, 382, 397
Ratification, 397
Ratification crisis, 28, 38, 50, 57, 98,125,128, 186,
209,226,258,264,324,325,327,386,397-398,
411,453,511,512
Reagan, Ronald, 414, 453
Reagan administration, 476
Reasoned opinion, 397
Recommendation,397
REDWG. See Regional Economic Development
Working Group
Referenda, 45, 397-398, 472; in Austria, 9, 366,
513; in Denmark, 128, 134-136, 186,226,324,
366,368,397-398,418,466,511; in Finland,
234,240,398,512; in France, 240, 398, 512; in
Greenland, 259; in Ireland, 300, 366, 367,
397-398,418,509; in Norway, 363-364; in
Sweden, 364, 366, 442-443; in UK, 397, 508
Reflection group, 139,270,296,398,466,514
Refugee policy, 141-142,269,314. See also Justice
and Horne Affairs
Regional Economic Development Working Group
(REDWG), 342-343
Regional policy, 46, 398,425. See also Cohesion
policy
Regulation, 398
Regulatory policy, 399--402
Report on European Institutions. See Three Wise
Men
Republikaner Party, 366
Research and Technological Development (RTD)
policy,156,224,237-238,275-276,285,
403--405,437
Research Framework Prograrn. See Framework
Program for Research and Technological
Development
Resistance movement, 210, 231
Rey,Jean, 305, 334, 340, 357,405, 506

559

Reynaud, Paul, 415

Richardson, Keith, 222
Right of establishment, 405
Rio Earth Summit, 172
Rio Group, 323,405, 511
Robbins, Lionel, 231, 245, 298
Romania, 22, 36-37,40, 166,385,388,405,487,
513. See also Central and Eastem European
States
Rome Declaration, 486
Rome Summit (December 1990),144,295,407
Rome Treaty. See Treaty ofRome
Roosevelt, Franklin, 347
Royal Commission on Environmental Policy, 171
Royaumont Process, 406
RPR. See Rally for the Republic
Ruhr, 180, 181, 182,298,348,415,417
Russia, 21,83,89,99, 102,233,242,247,362,369,
388,406-410
Rwanda, 83, 88
Saar,416
Saint-Gobain,220
Sakharov Prize for Freedom of Thought, 411
Sanctions, 428
San Jose Declaration, 323
San Jose Dialogue, 411
San Jose Group, 411
Santer, Jacques, 411--412; and allocation of
portfolios, 28, 60; appointrnent of, 57, 58, 298,
330, 332, 513; and Leon Brittan, 28; and budget,
245; and Confidence Pact on Employment, 97;
and European Parliament, 213; and New
Transatlantic Agenda, 358, 514; and Transatlantic
Business Dialogue, 457; and Trans-European
Networks, 97, 459
SAR. See Special Administrative Region of Hong
Kong
Saudi Arabia, 259
SAVE. See Specific Actions for Vigorous Energy
Efficiency
Scheingold, Stuart, 386
SchengenAgreement, 8,138,269,296,316,
412--414,421,510
Schengen n Agreement, 413
Schengen Information System (SIS), 414
Scheuble, Wolfgang, 321
Schlter, Poul, 343
Schmidt, Helmut, 150, 185,207,254,318,414
Schumacher, Kurt, 252
Schuman, Robert, 2, 6,45, 77,121,179,180,227,
238,331,374,375,414--417,505. See also
Schuman Day; Schuman Declaration; Schuman
Plan
Schuman Day, 417
Schuman Declaration, 45, 227, 232, 336, 416
Schuman Plan, 179, 180, 195,252,261,347-348,
375,429
Scotland, 46, 71,367,380. See also United
Kingdom

560

Index

Scrutiny, 214, 417

SDI. See Strategic Defense Initiative
SEA. See Single European Act
Seanad,300
SEDOC. See European System for the International
Clearing of Vacancies and Applications for
Employment
Seguin, Philippe, 243
SEM 2000. See Sound and Efficient Management
Initiative
Serbia, 83,88,117,423,487,493-496
Seville Conference, 456-457
SFOR. See Stabilization Force
Simitis, Kostas, 256, 257
Simplification, 133
Singapore, 12, 13
Single currency. See Economic and Monetary Union
Single European Act (SEA), 418, 436; and cohesion
policy, 47, 437, 439; comparison with Amsterdam
Treaty, 10; and decisionmaking, 2, 97,104, 131,
211,213,272,275,325,351,354,382,395; and
Economic and Monetary Union, 144, 148; and
education policy, 160; and environmental policy,
75,170,205,399; and European Parliament, 1,
211,213; and European Political Cooperation,
218,464; and France, 239, 344; and Germany,
253,318; and integration theory, 280-281, 327;
and Justice and Horne Affairs, 310; negotiation
of, 11,294-295,419,509; origin of, 141, 185,
188, 189,221,222,237,434,488; ratification of,
135,366,367, 398,418; and research and
technological development policy, 403; and
Schengen Agreement, 269; and social policy, 43,
425,483
Single Market Program (SMP): and Cecchini
Report, 35-36, and cohesion policy 47; and
Common Market, 85; and company law, 91; and
Jacques Delors, 125-126,232; and Economic and
Monetary Union, 146, 147, 152, 153, 154,454;
and energy policy, 165; and European Free Trade
Association, 79; and European Political Union,
219; and European Round Table, 221; and
Fortress Europe, 237; and France, 344-345; and
Monnet method, 349; negotiation of, 185, 186,
225,294-295,512; and Padoa-Schioppa report,
379; and Jacques Santer, 411-412; and Single
European Act, 98, 418; and Sutherland Report,
447; and Switzerland, 444; and
telecommunications, 450; and Treaty on
European Union, 463; and United Kingdom, 453
SIS. See Schengen Information System
Six,423
Slovruaa,37,40,115,385,407,423,483,513.See
also Central and Eastern European States
Slovenia, 22,40, 59, 166, 169,218,242,388,423,
494,511,514,515 . See also Central and Eastern
European States
Small and medium-sized enterprises (SMEs), 177,
202,423,457

SMEs. See Small and medium-sized enterprises

Smith, JOhn' 473
SmithsonianAgreement, 149,423
SMP. See Single Market Program
Snake, 149, 150,206,423
SNB. See Special Negotiating Body
Soames, Christopher, 424. See also Soames Affair
SoamesAffair,424
Soares,Mano,210,389
Social chapter, 187,344,369
Social Charter, 126, 186,225,227,344,424,426,
454--455,473,510
Social Democratic Party (Austria), 18
Social Democratic Party (Denmark), 136, 368
Social Democratic Party (Germany), 3,196,252,
254,303,318,496
Social Democratic Party (Portugal), 390
Social Democratic Party (Sweden), 443
Social Democratic Party (UK), 473
Social dialogue, 424--425
Social dimension. See Social Policy
Socialist Party (France), 344
Socialist Party of Greece (PASOK), 256
Socialist Party (Portugal), 390
Socialist Party of Spain (PSOE), 255
Socialist People's Party (Denmark), 368
Social partners, 414, 425
Social policy, 43, 46,395,420,425-427,465,483;
and Amsterdam Treaty, 9; and social dialogue,
424--425; and social partners, 414, 425; and social
protocol, 43,118,127, 297,392,395,426, 427,
465; and Treaty on European Union, 43, 118,225,
424,426-427
Social protocol, 43, 118, 127,297,392,395,426,
427,465
SOCRATES, 12, 160-161, 187,327,427
Soederman, Jacob, 365
So1emn Dec1aration on European Union, 110, 141,
160,218,225, 251,294,318,330,427,418,509
Sound and Efficient Management Initiative (SEM
2(00),245,427
Sound Financial Management Group, 245, 428
South Africa, 83, 189, 390, 428-429
Southern African Development and Cooperation
Conference, 428
Soviet Union, 415-416; andAustria, 18; and Baltic
States, 21; and Central and Eastern European
States, 36; and Cold War, 51-55, 122, 158, 195,
209,241,251,336,357,373,415-416,476;
collapse of, 54, 331, 476; and Common Foreign
and Security Policy, 189; and Commonwealth of
Independent States, 88-89; and Council for Mutual
Economic Assistance, 101; and Energy Charter,
163; and environmental policy, 173; and Finland,
234; and Greece, 257; and Middle East, 342-343;
and North Atlantic Treaty Organization, 360-361;
and Organization for Security and Cooperation in
Europe, 372; and Trade and Cooperation
Agreement, 447, 456; and Yugoslavia, 494

Index

Spaak:, Paul-Henri, 3, 24,182,210,331,340,341,

348,429-430, 505. See also Spaak: Report
Spaak: Report, 429
Spain, 430-433; accession of, 166, 185,204,255,
344,418,430-431,434,437,441,508,509;
and cohesion poliey, 45-49, 79, 130; and
Commission, 59; and Common External Tariff,
80; and Common Fisheries Policy, 81-82; and
Community Trademark Office, 91; and
decisionmaking, 120,395; and Economic and
Monetary Union, 145, 152; and environmental
policy, 171-172,273; and European Monetary
System, 208; and Ioannina Compromise,
298-299; and infringement, 278; and Latin
America, 321-323; and Mediterranean Policy,
337; and national parliament, 351; and North
Atlantic Treaty Organization, 360; and
presidency, 392; and Schengen Agreement, 413;
and single market prograrn, 307; and South
Africa, 428; and telecommunieations policy,
447,451; and Western European Union,
486
Special Administrative Region (SAR) of Hong
Kong,41
Special Committee for Agriculture, 69
Special Negotiating Body (SNB), 433
Special Prograrns for the Victims of Apartheid,
428-429
Specific Actions for Vigorous Energy Efficiency
(SAVE),433
Spierenburg, Dirk, 433. See also Spierenburg Report
Spierenburg Report, 65, 66, 433
Spillover, 279-280, 355
Spinelli, Altiero, 101, 109, 125, 141, 184,210,231,
232,278,433-434,439,508
Sport, 9
SPRINT. See Strategie Program for Innovation and
Technology Transfer
STAB EX. See System for the Stabilization of Export
Eamings from Products
Stability and Growth Pact, 434, 514-515
Stability Pact (for Central and Eastern Europe). See
Bal1adur Plan
Stabilization Force (SFOR), 385, 495-496
Standards and Conformity Assessment, 434-436
Standing Committee on Agricultural Structures, 74,
436
STAR. See Committee on Agricultural Structures
and Rural Development
State aids, 436. See also Competition policy
Statement of Assurance, 108
Statistieal Office of the European Communities
(EUROSTAT), 402, 436
Stockholm Conference. See Conference on the
Human Environment
Stoltenberg, Gerhard, 144
Strasbourg, 102, 109, 141,211,239,382,414,
436-437
Strasbourg Summit (December 1989),130,144,
178,186,189,295,510

561

Strategic Defense Initiative (SDI), 219-220

Strategic Program for Innovation and Technology
Transfer (SPRINT), 437
Stresa Conference, 72, 335, 437, 506
Striibe, Jurgen, 457
Structural funds, 5,19,39,47-50,74,177,219,223,
300,390
Structural policy, 437. See also Cohesion policy
Structured dialogue, 437-438. See also Central and
Eastern European States
Stuttgart Declaration. See Solemn Declaration on
European Union
Suarez, Adolfo, 255
Subsidiarity, 66, 82, 127, 132, 133,233,356,392,
402,422,438-441
Sudan, 83, 328
Suez Crisis, 333, 359
Summit, 4, 441. See also European Council
Supranationalism, 118, 131,441
Supremacy ofEuropean Community Law, 441-442.
See also European Court of Justice
Sutherland, Peter, 442, 457. See also Sutherland
Report
Sutherland Report, 442
Sweden, 442-443; accession of, 166,202,226,298,
411,479,511,512; and Baltie Council, 21; and
Central and Eastern European States, 38; and
citizenship, 43; and cohesion policy, 50, 437; and
Common Agricultural Policy, 75, 75; and
Common Commercial Policy, 76, 248; and
Common External Tariff, 80--81; and Common
Foreign and Security Policy, 83, 84; and Common
Market, 86,435; and competition policy, 86,
92-95; and decisionmaking, 120,395; and
Econornic and Monetary Union, 149; and
environmental policy, 171, 172, 173; and
European Econornic Area, 197-198; and
European Free Trade Association, 201; and
neutrality, 357-358; and Nordic Council, 359;
and Norway, 362-363; and Organization for
Economic Cooperation and Development, 369;
and presidency, 392; referendum in, 364, 366,
397,442-443; and SchengenAgreement, 413;
and transparency, 105, 133,460; and Western
European Union, 235, 486-487
Switzerland, 134, 166, 167, 197, 199,200,201,248,
288,327,369,443-445,511; membership
application of, 202, 444; and neutrality, 357-358,
444; referendum in, 358,444
Syria, 24, 79,213, 336, 337, 342
SYSMIN. See System for the Stabilization ofExport
Earnings from Minerals
System for the Stabilization of Export Earnings from
Minerals (SYSMIN), 329,445. See also Lome
Convention
System for the Stabilization of Export Earnings from
Products (STABEX), 329, 445. See also Lome
Convention
TABD. See Transatlantie Business Dialogue

562

Index

TACIS. See Technical Assistance for the

Commonwealth of Independent States
TACs. See Total Allowable Catches
TAD. See Transatlantic Declaration
TAFfA. See Transatlantic Free Trade Area
Taiwan, 12, 13
Tajikistan, 90
Target price, 72
TAS. See Technical Advisory Service
Task Force for Human Resources, Education,
Training, and Youth, 166, 187
Taylor, Paul, 280
TCAs. See Trade and Cooperation Agreements
Technical Advisory Service (TAS), 203, 205
Technical Assistance for the Commonwealth of
Independent States (TACIS), 89, 336,407-409
Telecommunications policy, 447-452
Telefonica, 451
Television Without Frontiers, 14-17, 452
Telia, 451
Temporary Committee of Enquiry, 452
TEMPUS. See Trans-European Mobility Scheme for
University Students
Ten,452
TENs. See Trans-European Networks
TEU. See Treaty on European Union
Thailand, 12, 13
Thatcher, Margaret, 453-454; and antifederalism,
28; and Leon Brittan, 27; and Budget, 236; and
cohesion policy, 47, 48; and Council of
Ministers, 103; and Etienne Davignon, 117;
and democratic deficit, 134; and France, 243; and
Edward Heath, 363-364; and industrial policy,
274; and Helmut Kohl, 318; and opposition to
German unification, 253; and Single European
Act, 11,343,418; and single market program,
185; and social policy, 424-425; and Treaty on
European Union, 472-473
THERMIE,310, 454
Third Countries, 454
Third Pillar, 454
Thom, Gaston, 330, 375,454-455
Three Wise Men, 335, 455
Tinbergen,Jan,77
Tindemans,Leo, 24,294,438-439,455,508. See
also Tindemans Report
Tindemans Report, 439, 455
TokyoRound,81,85,248,306,480
Total Allowable Catches (TACs), 82,455,457
Tourism, 455-456
Trade and Cooperation Agreements (TCAs), 21-22,
36-37,88-89,101,380,407,456
Trade Assessment Mechanism, 307
Trademark Office. See Community Trademark
Office
Trade-Related Intellectual Property Rights (TRIPS),
489
Transatlantic Action Plan. See Joint EU-U.S.
(Transatlantic) Action Plan

Transatlantic Agenda. See New Transatlantic

Agenda
Transatlantic Business Dialogue (TABD), 456-457,
481
Transatlantic Declaration (TAD), 11, 17,58,358,
458,477,511
Transatlantic Economic Area, 458
Transatlantic Free Trade Area (TAFfA), 458, 478,
481
Trans-European Mobility Scheme for University
Students (TEMPUS), 458-459, 447, 458
Trans-European Networks (TENs), 97, 128,204,
212,220,221,412,459,461,465
Translation Center for Bodies of the European
Union, 459
Transparenc~9, 105, 133,459-460
Transport policy, 460-462
Treaties of Rome. See Treaty of Rome
Treaty of Economic, Social, and Cultural
Collaboration and Collective Self-Defense. See
Brussels Treaty
Treaty of Friendship and Reconciliation. See Elysee
Treaty
Treaty of Maastricht. See Treaty on European Union
Treaty ofParis, 179, 180, 181,331
Treaty ofRome, 200, 462-463; and accession, 166;
and budget, 28; and cohesion policy, 46-47; and
Common Agricultural Policy, 71; and Common
Commercial Policy, 37, 76, 176,248,305,365,
490; and Common Market, 85-88; and company
law, 91; and competence, 440; and competition
policy, 86-87,92-95; and Counf:il of Ministers,
102; and decisionmaking, 45, 123-124; and
Economic and Monetary Union, 148; and
Economic and Social Committee, 153; and
education policy, 160; and energy policy,
163-164; and environmental policy, 172; and
EuropeanAtomic Energy Community, 177-178;
and European Community law, 191,277,391;
and European Economic Area, 197, 202; and
European Free Trade Association, 201; and
European Investment Bank, 203; and free
movement, 42; and industrial policy, 274-275;
and Justice and Horne Affairs, 313-315;
negotiation of, 183,238,331,303,430; and
overseas countries and territories, 376-377;
preamble of, 110,217; and regional policy, 399;
and research and technological development
policy, 403; revision of, 185,294-297,418,464;
and right of establishment, 405; and social policy,
223,424-425; tenth anniversary of, 389; and
transport policy, 460-461
Treaty ofVersailles, 415
Treaty ofWestrninster, 374
Treaty on European Union (TEU), 54, 182,
232-233,333,463-467; and accession, 1,39;
and Austria, 18; and budget, 31; and Central and
Eastem European States, 38; and citizenship,
42-43,255,331; and cohesion policy, 49; and

Index
Commission, 60, 65; and Committee of
Permanent Representatives, 69; and Committee
of the Regions, 70--71; and Common Foreign and
Security Policy, 83, 120,218,259; comparison
with Amsterdam Treaty, 10; and competition
policy, 87; and consumer policy, 98; and Council
of Ministers, 102-105; and Court of Auditors,
107,109; and cultural policy, 14, 110-111; and
decisionmaking, 2, 97, 118, 471; and Economic
and Monetary Union, 32, 99, 127, 130, 132, 138,
144-152,157,207,463-466; and education
policy, 160; and energy policy, 163; and
enlargement, 16, 169; and environmental policy,
171, 172; and European Parliament, 192,
211-216; and Germany, 253-254; and Greece,
257; and human rights, 188; and industrial
policy, 276; and integration theory, 280, 282; and
Justice and Horne Affairs, 6, 310, 314, 383; and
national parliaments, 13,351-352; negotiation
0~26, 186,202,219,232,251,295-297,330,
345,356,432,463-464,511; and public health,
263; ratification of, 28, 38, 50, 57, 98,125,128,
130,135,136,186,209,226,243,258,264,324,
325,327,386,390,397-398,411,453,511,512;
and research and technological development
policy, 403-405; and Schengen Agreement, 414;
and social policy, 8, 43,118,187,225,424,
426-427,483; and subsidiarity, 392, 439-440;
and United Kingdom, 187,472; and Western
European Union, 486
Trevi Group, 69, 259, 310, 467
Trieste, 121
TRIPs. See Trade-Related Intellectual Property
Rights
Troika, 217, 467
Trotman, Alex, 456
Trudeau, Pierre, 33
Truman, Harry, 2
Truman Declaration, 373
Tunisia, 24, 336, 337
Turin Summit (March 1996),26,296,314,398
Turkey, 24, 13-115, 167, 175,200,210,257,271,
336,337,338,339,360,369,412,467-469,486,
509,515
Turkish Republic of Northern Cyprus, 114
Twelve,469
Two-speed Europe, 137. See also Differentiated
integration
UFE. See Union for Europe
Ukraine, 83, 89,90,406-408
UN. See United Nations
Unanimity, 471. See also Decisionmaking
procedures; Empty chair crisis
UNCTAD. See United Nations Conference on Trade
and Development
UNCED. See United Nations Conference on
Environment and Development
Unemployment, 133, 136, 147,240,431

563

UNICE. See Union of Industrial and Employers'

Confederations of Europe
Union for Europe (UFE), 303, 380, 383,471
Union of Industrial and Employers' Confederations
ofEurope (UNICE), 220, 225, 292, 425, 426,
471,483
Union of Soviet Socialist Republics (USSR). See
Soviet Union
Unisource, 451
United Arab Emirates, 259
United Kingdom (UK), 471-474; accession of, 4,
166,184,197,263,299,333,366,389,424,506,
507; and Amsterdam Treaty, 9, 393; and Black
Wednesday, 26; and Bovine Spongiform
Encephalopathy crisis, 26-27; and budget, 30,
130, 185, 236, 237,294, 318,344,453; and
cohesion policy, 50; and Cold War, 53; and
Commission, 309; and Committee of the Regions,
71; and Common Fisheries Policy, 81-82; and
Common Foreign and Security Policy, 84; and
contact group, 99; and Cyprus, 113; and
decisionmaking, 120, 395; and differentiated
integration, 139; and early years of European
integration, 5, 42,179,180,201,232,331,
415-416; and Economic and Monetary Union,
144-145,152,262,465; and energy policy, 165;
and environmental policy, 173; and European
Community law, 265; and European Defense
Community, 195; and European Monetary
System, 26, 138, 185,207-209, and European
Police Agency, 216; and Falklands War, 322; and
financial services, 88; and General Agreement on
Tariffs and Trade, 249; and industrial policy,
274-275; and infringement, 278; and
intergovernmental conferences, 343, 352; and
Ioannina Compromise, 298-299; and Ireland,
299-301; and Japan, 306-307; and Justice and
Horne Affairs, 314; and Lome Convention,
328-329; and North Atlantic Treaty Organization,
360; and opposition to integration, 194; and
Organization for Economic Cooperation and
Development, 369; and presidency, 392;
referendum in, 397, 508; and Schengen
Agreement, 269, 413-414, 421; and Single
European Act, 48, 453; and social policy, 8, 187,
225, 227, 424; and South Africa, 428; and
telecommunications policy, 449-451; and TransEuropean Networks, 97; and Treaty on European
Union, 369, 453-454; and Western European
Union, 487
United Nations (UN), 34, 39, 83, 84, 88, 114, 137,
153,187,221,235,244,359,362,373,390,
428-429,430,474
United Nations Conference on Environment and
Development (UNCED), 170
United Nations Conference on Trade and
Development (UNCTAD), 79,474
United Nations Food and Agriculture Organization,
474

564

Index

United Nations General Assembly, 474

United Nations High Commissioner for Refugees
(UNHCR), 494
United Nations Industrial Development
Organization, 474
United Nations Protection Force (UNPROFOR),
494--495
United Nations Security Council, 474, 519
United States (U.S.), 474--482; and Airbus, 7-8; and
audiovisual policy, 15-18; and China, 41; and
Cold War, 51-55; and CommonAgricultural
Policy, 72-74; Congress of, 211, 212, 215, 374,
489; and contact group, 99; and Council of
Ministers, 102, 104; and Cyprus, 115; and early
years of European integration, 5, 121, 122, 177,
179-181, 373; economic relations with the
European Union, 75, 77,80,94, 185, 190,220,
224,237,276,436; and enlargement, 479; and
environmental policy, 173; and European Bank
for Reconstruction and Development, 178; and
European Defense Community, 195; and
European security, 223, 241, 244, 356--357,
360-362, 372,442,474--478; FederalReserve
banks, 147; and federalism, 44, 231-233, 288;
and France, 184; and G7, 247; and General
Agreement on Tariffs and Trade, 247-250,
489-490; and industrial policy, 275; and Japan,
305,306,308; and Latin America, 321; and
MarshalI Plan, 336, 371; and Middle East,
342-343; and monetary policy, 34, 149, 156,
305,306,476; and New Transatlantic Agenda,
85; and Organization for Economic Cooperation
and Development, 369; and origins of European
integration, 121-122; and Russia, 406-408; and
telecommunications policy, 448-452; and Uni ted
Kingdom, 184,333; and World Trade
Organization, 498-490; and Year of Europe, 493;
and Yugoslavia, 99,117,495-497
Urugua~321,322,405

Uruguay Round, 14, 17,74,80,81,85,222,239,

248,334,365,371,451,489-491,509,512
USSR. See Soviet Union
Uzbekistan,90
Val Duchesse Process, 483
Value Added Tax (VAT), 29, 87,111,420,483
Van den Broek, Hans, 90,114,264
Van Gend en Loos case, 42,140
Van Helmont, Jacques, 3
Variable geometry, 137. See also Differentiated
integration
VAT. See Value added tax
Vedel, Georges, 483. See also Vedel Report
VedelReport, 131,483
Venezuela,lO, 322, 405, 411
Venice Declaration, 341-342, 483
Ventotene Declaration, 231
VERs. See Voluntary export restraints
Victory Program, 180,347
Vienna Convention, 173

Vietnam, 13
Vietnam War, 475, 476
Viner, Jacob, 77
Visegrad, 407, 487. See also Central and Eastern
European States
Vlaams Blok, 366
Vocational training, 327, 387
Voigt, Karsten, 496
Voluntary export restraints (VERs), 85, 305
Voluntary restraint agreements (VREs), 80
Volvo, 220
Vredeling, Henk, 484
Vredeling Directive, 227, 484
VREs. See Voluntary restraint agreements
Waigel, Theo, 145,434
Wales, 71. See also United Kingdom
Wallonia, 25
Warsaw Pact, 331, 359, 360, 362, 485
Weighted voting, 120, 138. See also Decisionmaking
Weimar Germany, 5
Werner, Pierre, 148,331,485
WernerPlan, 144, 148, 149, 151, 157,330,331,485,
423,507
Werner Report. See Werner Plan
Westendorp, Carlos, 139, 296, 398
Western European Armaments Grouping (WEAG),
487
Western European Union (WEU), 485-488, 519;
and Amsterdam Treaty 10; and Austria, 19; and
Central and Eastern European States, 39; and
Combined Joint Task Forces, 56; and Common
Foreign and Security Policy, 43-84; and Cyprus,
114; and differentiated integration, 137; and
European Security and Defense Identity, 223; and
Finland,235; andFrance, 241,345; and
Kirchberg Declaration, 317; and Noordwijk
Declaration, 359; and North Atlantic Treaty
Organization, 360-361,475-477; origin of, 28,
142,373; and Petersberg Declaration, 386; and
Sweden, 443; and Treaty on European Union,
296,465; and United States, 475-477; and
Yugoslavia, 350, 384, 494
White Paper, 91,125,128,276,277,419-420,423,
449,459,488
WHO. See World Health Organization
Widening, 121. See also Enlargement
Wilson, Harold, 263, 300, 309,472,488
Working Groups, 11, 102-104,488-489
World Bank, 203, 385, 490
World Food Program, 474
World Health Organization (WHO), 262
World Trade Organization (WTO), 79, 489-491; and
audiovisual policy, 17-18; and Canada, 34; and
China, 41; and European Parliament, 213; and
General Agreement on Tariffs and Trade,
248-250; and Organization for Economic
Cooperation and Development, 370; and
Partnership and Cooperation Agreements, 89; and
regional integration, 157-158; and Russia,

Index

408-409; and telecommunications policy, 451;

and Transatlantic Business Dialogue, 457; and
United States, 477-482
World War 1,415,467,493
World War 11, 101,363,373,429,433,442,444,
467,486
World Wildlife Fund, 292
WTO. See World Trade Organization
Xerox, 457
Yalta, 241

565

Yaounde Convention, 493, 506, 507

Year of Europe, 493
Yom Kippur War, 507
Youth for Europe, 161,493
Youth policy. See Education
Yugoslavia, 10,21,37,83,84,117,166,189,218,
251,259,333,349-350,362,372,384-386,404,
423,477,487,493-497,
511
Zaire, 328

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