University of Thessaly

Course: The Geography of European Integration

Lecture 1: 19.10.2009The making of the European

Institutions and policies: the early years 1950-1980

Marios Camhis

Department of Planning and Regional Development

• Lecture 1– What is the EU and how it functions– History of the EU 1950-1980

• Lectures 2 and 3: policies with strong territorial dimension/impact

• Lecture 4: Future prospects f EU

What is the EU

• A unique construction: no comparable model elsewhere – It is not a country, federal or otherwise (and most

probably will never become one)– It is not an international organization (UN,

Council of Europe, OECD) it is something more

• Under continuous development and change

• Motto: “unity in diversity”

Undergoes continuous transformation

Successive enlargements: increase in area and population

Rules for membership

• Free will

• Acceptance by all the others

• Geography (more or less in Europe)

• Politico-economic criteria (democracy, market economy, acquis communautaire)

• Stable borders (see Italy –Slovenia and Slovenia-Croatia)

In the past: changing borders

Today: stability and cross border co-operation

2007-2013Internal borders

External borders

Unity in DiversityUnity in Diversity

• EU unites countries with different:– Levels of economic development– History– Administrative practices– Size and population

• 23 official languages

Surface (1000 sq.klm.) EU27 4234 sq.klm.

Population 2007EU27 497 m

GDP per capita (PPS) 2007Index EU27 = 100

Unity in Unity in Diversity Diversity

Unity and Diversity

Member States function with different administrative structures at central, regional or local level. • France: 26 regions, 100 prefectures, 36 763 communes• Spain: 17 autonomous regions, 2 autonomous cities (Ceuta and Melilla), 50

provinces, 8 109 municipalities• Austria: 9 federate states, 99 districts (including 15 cities), 2 357

municipalities• The Netherlands: 12 provinces 467 communes• Portugal: 2 autonomous regions (Azores and Madeira), 18 districts, 308

municipalities, 4 261 parishes, 2 metropolitan areas (Lisbon and Oporto)• Estonia: 15 counties 227 municipalities (33 urban, 194 rural municipalities)• Greece, 13 regions, 3 unified prefectural authorities, 54

departments/prefectures, 900 municipalities, 134 communes

• Etc see www.cor.europa.eu

Unity and Diversity• Population differences are not expressed in composition of the EU Institutions

– European Commission proposes and implements – (one Commissioner per MS)

– Council of Ministers decides – (Poland ½ population of Germany only 2 votes less) (55% MS 65% population)

– European Parliament co-decides – Germany with 60 times more population than Estonia only 16 times more MEPs

– ESCE and Committee of Regions opinion (Austria 12 members with 8 m., France 24 with 64 m.

• EU system of functioning: "community method" + subsidiarity: to ensure that decisions are taken as closely as possible to the citizen + proportionality: EU involvement limited to what is necessary to achieve objectives of Treaties

• Involvement of maximum number of actors – leading to consensus • Institutions function in different ways

• Intergovernmental method

Economy

Defence

EU functions at various levels with different compositions

Unity in Diversity

euro

no-euro

NATO Schengen

Legal Acts• On the basis of the Treaties the institutions adopt legal acts to

exercise the Union's competences.

• Policies are implemented on the basis of different legal acts

• Regulations: have general application and are binding in their entirety and directly applicable in all MSs. (e.g. Cohesion)

• Directives: binding obliging MSs to achieve a certain result, but leave national authorities some room for manoeuvre in how they do it. - the choice of form and methods. (Environment)

• Decisions: binding in its entirety. A decision which specifies those

to whom it is addressed is binding only on them.

• Recommendations and opinions have no binding force.

Unity and Diversity

• All policies do not have the same “European” status

• “Lisbon Treaty” identifies categories and areas of Union competence

• The Treaty on European Union establishes the European Union, (on which the Member States confer competences to attain common objectives) and specifies the values and objectives of the Union.

• The Treaty on the functioning of the Union organizes the functioning of the Union and determines the areas of, delimitation of, and arrangements for exercising its competences.

Categories of Union competence

• 1. Exclusive competence: only the Union may legislate and adopt legally binding acts.

• 2. Shared competence: EU and MSs may legislate in that area, but the MSs shall exercise their competence to the extent that the EU has not exercised its competence

• 3. MSs coordinate their economic and employment policies within arrangements as determined by this Treaty

• 4. The Union shall have competence, (Treaty on European Union), to define and implement a common foreign and security policy, including the progressive framing of a common defence policy.

• 5. Competence to carry out actions to support, coordinate or supplement the actions of the MSs, without superseding MSs’ competence. Legally binding acts of the Union relating to these areas shall not entail harmonisation of MSs' laws

Exclusive Competence (art.3)

a) customs union (common external tariffs); b) the establishing of the competition rules necessary for the

functioning of the internal market; c) monetary policy for the Member States whose currency is

the euro; d) the conservation of marine biological resources under

the common fisheries policy; e) common commercial policy (Commission represents EU

Member States in WTO negotiations).

• The Union shall also have exclusive competence for the conclusion of an international agreement

Shared Competence (art.4)

a) internal market; b) social policy, for the aspects defined in this Treaty; c) economic, social and territorial cohesion; d) agriculture and fisheriese) environment; f) consumer protection;g) transport; h) trans-European networks; i) energy;j) area of freedom, security and justice; k) common safety concerns in public health matters

Shared competence (art.4)

• Two special cases

• In the areas of research, technological development and space, the Union shall have competence to carry out activities, in particular to define and implement programmes; however, the exercise of that competence shall not result in MSs being prevented from exercising theirs.

• In the areas of development cooperation and humanitarian aid, the Union shall have competence to carry out activities and conduct a common policy; however, the exercise of that competence shall not result in MSs being prevented from exercising theirs.

Coordination MSs Competence (art.5)

• 1. The Member States shall coordinate their economic policies within the Union. To this end, the Council shall adopt measures, in particular broad guidelines for these policies. Specific provisions shall apply to those Member States whose currency is the euro.

• 2. The Union shall take measures to ensure coordination of the employment policies of the Member States, in particular by defining guidelines for these policies.

• 3. The Union may take initiatives to ensure coordination of Member States' social policies

Support Competence (art. 6)

• Union’s competence to carry out actions to support, coordinate or supplement the actions of the MS:

a) protection and improvement of human health;

b) industry;

c) culture;

d) tourism;

e) education, vocational training, youth and sport;

f) civil protection;

g) administrative cooperation.

Open method of coordination • An intergovernmental method

• Applied in areas which fall within the competence of the MSs, (employment, social protection, social inclusion, education). Defined as an instrument of the Lisbon strategy 2000.

• Framework for cooperation between MSs, whose national policies can be directed towards certain common objectives. MSs jointly identify and define objectives to be achieved (adopted by the Council); establish measuring instruments (statistics, indicators, guidelines); benchmarking, i.e. comparison of the MSs' performance and exchange of best practices.

• MSs are evaluated by one another. Commission surveillance. EP no part.

• In some cases "soft law" measures binding on the MSs in varying degrees. (e.g. in the context of the Lisbon strategy, the OMC requires the MSs to draw up national reform plans and send them to the Commission).

Common foreign and security policy

• The European Council identifies the Union's strategic interests, determine the objectives and define general guidelines for the common foreign and security policy, including for matters with defence implications. Unanimity

• The Council takes the decisions necessary for defining and implementing it on the basis of the general guidelines and strategic lines defined by the European Council.

• Enhanced cooperation in defence

• The Council and the High Representative of the Union for Foreign Affairs and Security Policy ensure the unity, consistency and effectiveness of action by the Union.

• The High Representative and the MSs, using national and Union resources implement. The HR will be assisted by a European External Action Service working in cooperation with the diplomatic services of the MSs.

Unity in Diversity

Community policies do not have the same weight in the EU budget

Budget 20101.24% GNI

History of the EU

• History of EU a step by step progress with accelerations, crises, high and low points. Pace of integration affected by internal and external factors – Oil crises– Cold war– Political changes– Conflicting ideologies – Personal ambitions and friendships

• Each time it advances as far as it is permitted by its people through its democratically elected governments, EP, National parliaments, referenda.

History of the EU

Late 1940s: Churchill’s speech, Marshall Plan Council of Europe1950: Schuman Declaration, ECSC (52), failure of EDC, Treaties

of Rome – EEC, EURATOM (57/58), the Institutions1960: Progress in CAP and customs union, British application, de

Gaulle’s rejection, empty chair (qualified majority)1970: Enlargement 6 to 9, EP direct elections, regional policy,

environmental policy, EMS1980: Stagnation in early 1980s, Transformation: European

Single Act (86/87), Integration and disintegration1990: Milestone in EU history: Treaty on European Union

Maastricht (92/93), EMU, Amsterdam (97/99), Enlargement2000: Nice (01/03), Euro (02) Constitutional Treaty (05),

Rejection, Enlargement, Financial crisis Reform/Lisbon Treaty(07 – Ratification 09)

History of the EU- late 1940s

• 1946: Winston Churchill calls for a "kind of United States of Europe" in a speech at the Zurich University.

• 1947: the Marshall Plan, set up for the economic revival of Europe,

• 1948: Custom convention between Belgium, Luxembourg and the NL • The Western Union Treaty (Brussels Treaty) signed by Belgium,

France, Luxembourg, the Netherlands and the United Kingdom.• The Organisation for European Economic Cooperation (OEEC)

created to coordinate the Marshall Plan.• 1948: Fostered by Movements for European Unification, the Europe

Congress meets in The Hague recommends the creation of a European Deliberative Assembly and a European Special Council,

• 1949: West European nations create the Council of Europe (respect human rights, democracy and the rule of law).

• 1949: Signature in Washington of the North Atlantic Treaty

History of the EU-1950sthe beginnings of cooperation

• 1950: Schuman Declaration, 9 May (inspired by Jean Monnet), the French Foreign Minister Robert Schuman proposed integrating the coal and steel industries of Western Europe (Be, Fr, L, It, the NL, G subscribe)

• 1951: The Six sign the Treaty of Paris establishing the European Coal and Steel Community (ECSC). 

• 1955: Foreign Ministers of the Six meet in Messina and agree to aim at the integration of their countries on the economic front.

• 1956: Paul-Henri Spaak (Belgian FA Minister) presents to his ECSC colleagues a report on the draft Community Treaties foreseeing the creation of the EEC and Euratom. 

History of the EU-1950s

• 1957 March 25: The six sign in Rome the Treaties establishing the European Economic Community (EEC) and the European Atomic Energy Community (EURATOM) entering into force on 1/1/1958. EEC and EURATOM Communities in Brussels. Parliamentary Assembly in Luxembourg, and Court of Justice (common to all 3 Communities).

• NB: Neither regional nor environmental policy were mentioned in the Treaty of Rome

• 1959 The first steps are taken in the progressive abolition of custom duties within the EEC. 

• 1959 The European Council accepts USA's "Dillon proposal" on multi-lateral trade negotiations (General Agreement on Tariffs and Trade framework). Commission will lead negotiations.

History of the EU-1950s• 1958: 1st EEC budget adopted by Council, (Com’s proposal-EP’s opinion),

covers administrative expenditure. • Revenue = financial contributions from the 6 MSs

History of the EU-1950s

• 1959: Seven countries of the OEEC, Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdom, establish a European Free Trade Association (EFTA). Today Iceland, Liechtenstein, Norway and Switzerland. + in 1994 EEA (27 EU + 3 EFTA without Switzerland bilateral agreement with EU.

• 1959: Greece (8/6/59) and Turkey (31/7/59) apply for association with the EEC and negotiations start for their association - Greece (10/9/59) and Turkey (27/9/1959)

• 1959: Pierre Wigny (Belgian FA Minister), launches the idea of uniting in a single institution the High Authority of the ECSC and the two Commissions (EEC and Euratom)

History of the EU-1960sa period of economic growth

• 1958- 1962: Khrushchev’s efforts to oust Western allies from Berlin and Cuban missile crisis

• 1961: East Germany authorities build a wall across Berlin

• Budget grows as the EEC’s objectives are translated into policy commitments.

• 1961: ‘Common agricultural policy’ starts giving MSs joint control over food production. Farmers are paid the same price for their produce. The EU grows enough food for its needs. Unwanted side-effect: overproduction with mountains of surplus produce.

• 1962: The European Agricultural Guidance and Guarantee Fund (EAGGF) agricultural expenditure makes up majority of budget

• 1961 The European Social Fund regulation enters into force. 

History of the EU-1960sa period of economic growth

• 1961: the European Organisation for the Safety of Air Navigation (Eurocontrol) is established

• 1961: The OEEC becomes the Organisation for Economic Cooperation and Development (OECD)

• 1963: The first association agreement between the EC and the 18 African ex-colonies recently independent signed in Yaoundé, enters into force on 1/6/64

• 1964: European Court of Justice: Community law overrules national law.

History of the EU-1960sa period of economic growth

• 1963: de Gaulle, rejects UK’s application to join EEC 

• 1965: de Gaulle’s empty chair ( against use of qualified majority)

• 1967: UK re-applies to join the Community, followed by Ireland, Denmark and Norway. de Gaulle is still reluctant

• 1967: Council of Ministers decides to harmonise indirect taxes in the Community, to adopt the principle of the added-value tax system and to approve the1st medium-term economic policy programme

History of the EU-1960s

• 1967: The Merger Treaty enters into force fusing the Executives of ECSC, EEC, Euratom. European Communities: a single Commission of 9 members and a single Council.

• 1968: Customs union enters into force. Remaining customs duties in intra-Community trade are abolished 18 months ahead of what was scheduled in the Rome Treaty and

• the Common Customs Tariff is introduced to replace national customs duties in trade with the rest of the word

History of the EU-1970s

• 1971: System of “own resources”– customs duties, agricultural levies, transfer from each MS based on VAT (max 1% of share of the economy to which VAT applies)

• 1971: USA decides to float the dollar (abolishes fixed link dollar/gold which had ensured monetary stability after World War 2

• 1972: To maintain monetary stability, EU members decide to allow their currencies to fluctuate against each other only within narrow limits. The currency "snake" is set up: the Six agree to limit the margin of fluctuation between their currencies to 2.25%.

• This exchange rate mechanism (ERM), first step towards euro

• 1972: The Council adopts the Werner Plan to strengthen coordination of economic policies. MSs have to take measures to harmonise their budgetary policies and to reduce the margins of fluctuation between their currencies. 

History of the EU-1970s

• New leaders Brandt and Pompidou • Conservatives (E. Heath) in favour of EC –(major issue

New Zealand butter)• 1972: Paris summit • 1972: Enlargement 6 to 9 Denmark, Ireland, (Norway) and

the United Kingdom sign Treaties of accession. • 1972: 1st United Nations Conference on the Environment in

Stockholm in 1972 and growing public and scientific concerns on the limits to growth,.

• 1973: On the basis of European Council commitments in 1972 to establish a Community environmental policy, the first Environmental Action Plan was decided upon in November 1973.

History of the EU-1970s

• 1973: the Organisation of Petrol-Producers (OPEP) countries decides to increase petroleum prices.

• Recession delays economic converge and EMU • Energy crisis leads MSs to agree on the introduction of a

common energy policy. • New faces Giscard ‘d Estaing, H. Schmidt, (friendship +

convergence of interests) • 1974 December Paris Summit :

• Decides to meet 3 times a year as the European Council,• Go-ahead for direct elections to the EP• Agree to set up the European Regional Development Fund • Resolved to establish economic and monetary union

History of the EU-1970s• 1975: The Community and the 46 African, Caribbean and Pacific countries

(ACP) sign, Lomé I convention, to replace the Yaoundé Conventions • 1975: European Regional Development Fund (ERDF) supports regional

policies of Member States – projects of purely economic interest.

• 1975: H. Wilson (renegotiation+ referendum)

• 1975: EP gains power - last word on non-compulsory expenditure (compulsory = resulting from the Treaty of Rome, e.g. most agricultural expenditure), can reject the budget and grants budgetary discharge.

• 1975: Court of Auditors is set up to verify financial operations of the Community institutions

• 1975: The Council adopts a European unit of account based on a composite basket of the Community currencies. Used initially under the Lomé Convention and for the European Investment Bank operations. It will later be gradually introduced into other sectors of Community activities. 

History of the EU-1970s

• 1975: Greece formally applies to join the European Communities.

• 1976: The Council decides that MSs will extend fishing limits to 200 miles off their North Sea and North Atlantic coasts as from 1/11977. It marks the beginnings of the common fisheries policy.

• 1978: European Council in Copenhagen, agreement is reached on the first direct elections to the EP (held in 1979)

• the Heads of State or Government associate themselves with the Joint Declaration of the Parliament, the Council and the Commission on the respect of fundamental rights. respect of fundamental rights.

• 1978: Cooperation agreements with Maghreb countries (Algeria, Morocco, Tunisia) and the Mashreq countries (Egypt, Syria, Jordan, Lebanon) and financial protocols with Israel, Portugal and Malta

History of the EU-1970s

• 1978: the European Monetary System is established based on a European currency unit (the ECU) entering into force in 1979

• 1979: Commission transmits to Council Directive on the right of MSs' nationals to reside permanently in the territory of another

• 1979: Difficult negotiations for the accession of Portugal and in particular of Spain because of the fears of France and Italy about the impact on the CAP both in budgetary terms and for the competition of the same products, fruits, vegetables and olive oil.

• Thanks to Giscard D’ Estaing, Greece’s negotiation was

dissociated. • 1979: Second oil crisis

History of the EU – 1980sStagnation in the early 1980sImpact of second oil crisis of 1979Fears for the future of common market – MSs unilateral actions

The Economist announced EEC’s death at the Treaty of Rome 25th anniversary

Thatcher’s demand for a massive rebate contributed to malaise

1981 Greece becomes an EC member-Greek memorandum 1982 Greenland opts for withdrawal

1983 ambitious Athens European Council on budgetary unbalances, adaptation of CAP, strengthening of the Structural Funds ... ended with no decisions

1983: First framework programme for research and development 1984/87 – restructuring of steel industry

History of the EU – 1980s• Governments want EC to regain momentum in the context of

rapid globalization and heightened East-West tension. Change of attitude France (Mitterrand) and Germany (Kohl). Advances in Portugal’s and Spain’s negotiations (Felipe Gonzalez)

• 1984: Fontainebleau European Council - 10 agree on the compensation for the UK to reduce its contribution (its agricultural sector small/ the economic base on which VAT applies higher than of other MS

• 1985: new Commission with Jacques Delors

• Brussels European Council accepts adhesion of Spain and Portugal and agrees on the Integrated Mediterranean Programmes (IMPs) to tackle development problems of Mediterranean areas, (Greece and some regions of Italy and France) in view of the accession of Spain and Portugal,

History of the EU – 1980s

• New initiatives by the Commission e.g. White paper on completing the internal market, and Green paper on CAP

• 1985: The Schengen Agreement on the elimination of border controls is signed by B, G, Fr, Lux and the NL in Schengen (Luxembourg).

• European Council decides to amend the Treaty of Rome

• 1986: The Single European Act modifying the Treaty of Rome is signed in Luxembourg and The Hague.

History of the EU – 1980s

• The Economist called the act a "smiling mouse", meaning well-intentioned but too small to make much difference.

• SEA manages to satisfy at the same time Margaret Thatcher as it aims at creating a single market where people, goods, services and money move freely, Papandreou and the other socialists with the new policy of social and economic cohesion and the Danes with its emphasis on the environment + qualified majority

• 1988: Brussels European Council reaches agreement on all conclusions relating to "The Single Act: A new frontier for Europe" dossier.

• The Commission publishes the results of "Europe 1992 - The overall challenge" a study to assess the advantages of the single market. The objective/slogan of “1992” had an internal and external impact

History of the EU – 1980s

• 1988-1992: Need to resolve the annual budget crisis due to disagreements between Council and EP, Commission proposes that the 3 institutions set binding multi-annual expenditure ceilings for each category of expenditure.

• 1st “financial perspective”, covering the period 1988-92 which coincides with the programme to complete the internal market by 1/1/1993.

• The financial perspective seeks to limit the rise in agricultural spending whilst increasing expenditure on cohesion policies

• + a new own resource, based on a proportion of each MS ’s GNP added to the 3 existing. A ceiling for own resources limits the Community budget to a max of 1.20% of Community GNP in 1992.

History of the EU – 1980s

• The European flag, adopted by Community institutions, runs up for the first time in front of the Berlaymont building to the music of the European anthem. 

• 1989: The Delors Committee presents the report on the economic and monetary union

• Strasbourg European Council decides to convene an Intergovernmental Conference before 1990 to draw up amendment to the Treaty for the final stages of economic and monetary union.

• Integration and disintegration

• 1989: The Berlin Wall collapses