Reforming the EEC – The Single European Act

1. Reforming the EEC – The Single European Act

2. Review • Main problems encountered by the EEC in 1970s? External vs. internal, Decision-making… • Explain negative vs. positive integration • Outline problems related to harmonisation strategy for establishment of common market • Pitfalls of CAP • Enlargement-related problems

3. Prelude to the Single European Act • 1985 –Delors Commission • Jacques Delors – former French finance minister, respected by member governments • Aims to break through ‘Eurosclerosis’ • Goals of Delors Commission: • Strengthening of supranational institutions • Changing budgetary preferences of EEC • Moving towards completion of common market • Establishing a monetary union • Commissions political line enhanced by developments on world market

4. White Paper on Internal Market • Summer 1985 • White paper X Green paper • Commission’s project to make progress with the common market • Identifiedabout 300 NTBs of fiscal, physical and administrative nature • Proposed their removal and completion of internal market by January 1, 1993

5. Schengen Agreement • Parallel action by some MS to remove physical borders • Signed in 1985 symbolically in the town of Schengen bordering LUX, GER and FR • Intergovernmental treaty between BENELUX, GER and FR; not part of acquis communitaire • Removal of internal borders while strengthening the external borders (so-called Schengen border)

6. Single European Act • European Council meeting in Milan summer 1985 • Called an intergovernmental conference (IGC) to change the Treaties • Single European Act (SEA) signed in 1986 – the first fundamental change of Rome Treaties

7. Task 1 • Divide into groups and discuss preferences of the following parties at the 1985 IGC: • The Commission • The EP • Council Secretariat • The ‘minimalist’ camp (UK, Denmark, Greece) • The ‘maximalist’ camp (ITA, GER, FRA) • What were the real final outcomes in • Institutional level • Adoption of new policies

8. Main institutional changes in SEA • Qualified Majority Voting (QMV) in the Council in majority internal market issues • Strengthening the European Parliament (EP) by cooperation and assent procedures • European Council to be a part of the primary law

9. SEA and policies of the EEC • Proposals of the White paper on Internal Market adopted to the Treaty • Explicit aim to build an Economic and monetary union • Expanding the EEC mandate to the areas such as social legislation, environment, R&D … • Solidarity clause • Consultations in foreign policy affairs (European Political Cooperation - EPC) • Towards political union?

10. Ratification of SEA • Held back in Ireland (SEA in force in 1987) • Constitutional challenge against the government – signed the SEA without holding referendum • Successfuldue to foreign policy implications for Irish neutrality • SEA endorsed in referendum  New challenge for EEC – not merely a technical platform any more – the issue of democratic deficit

11. Internal Market • Slimmer version of common market  return to fundamentals • Defined as a‘space without internal frontiers, where free movement of goods, services, persons and capital is ensured’ • To be completed by 31/12/1992 • Unlike common market did not include obligations to create EMU and an extensive economic and tax harmonisation

12. The 4 Freedoms • Goods (TEC, Arts. 23-31) – mainly removal of NTBs • Persons (TEC, Arts. 39-48) – mutual recognition of qualifications, removal of discriminatory measures • Capital (TEC, Arts. 56-60) – removal of restriction on cross-border movement of capital • Services (TEC, Arts. 49-55) – cross-border provision of services without need of settling at the recipient’s state territory – problematic due to diverging legal requirements

13. Reforming the EEC – Towards the EU

14. Arguments for further Treaty reforms • External – collapse of the Soviet empire • stronger Union could emerge as a dominant power in Europe & gain ground after the Cold War • Security-related concerns • Internal - The Commission argued that EMU is necessary to utilize the advantages of the single market • Some MS required harmonisation of social standards (fears of social dumping) • Security concerns related to removal of internal frontiers • Democratic deficit

15. Creating the Maastricht Treaty • European Council agreed on changing the Treaty framework • Two IGCs convened in 1991 reflect the new dimensions proposed • Conference on political union • Conference on economic and monetary union (EMU) • Need to reach consensus in a range of controversial issues (supranational X intergovernmental, solidarity, foreign policy cooperation, social policy…)

16. Maastricht Treaty • Questions unresolved on IGC level were left to the European Council in Maastrichtin December 1992 • Tough negotiations resulted in a complicated compromise with a range of exceptions • Most controversial points: - New spheres of influence for the Community/Union (foreign policy, monetary union, social policy…) • Institutional balance (strengthening the EP) • Political union? • Citizenship • Treaty Establishing the European Union signed in February 1992

17. European Union • Based on ‘three pillars’: • European Communities (EEC changed to EC) • Common foreign and security policy (CSFP) • Justice and home affairs (JHA) • Pillar structure – a result of tough compromises; questionable coherence and too complex • Only the EC have legal personality, not the EU • EU as a precursor for federation? - British position • ‘Ever closer union between peoples’

18. Pillar I • Based on previous Treaties • Decision-making powers split between Commission, Council and EP • Two new principles: • Subsidiarity – (Art. 5) What is it? • Citizenship (Arts.17 – 22) – Every citizen of MS becomes EU citizen; complementary; only rights

19. Pillar I – Instiutions • Co-decision procedure; to be applied mainly in the area of Internal Market • Commission’s mandate expanded from 4 to 5 years; must be approved by EP • New advisory body Committee of Regions • ESD gains the ability to levy fines on defiant states • EP delegates an Ombudsman

20. Pillar I – Policies • EMU timetable • GB and DEN – „opt-out“ • New activities – development aid, consumer protection, trans-European networks … • Expansion of activities agreed under SEA - R&D, environmental protection, economic and social cohesion – Cohesion Fund • Social charter – rejected by GB

21. Pillar II - CFSP • Strictly intergovernmental, Commission and EP only informed, no powers of ECJ • Security questions for the first time on EU agenda • No legislation binding for citizens • Goals:to protect common values, interests and Union’s independence

22. Pillar III - JHA • Reaction to removal of inner frontiers • Also intergovernmental • JHA concerned: asylum policies, visa, immigration, organised crime, terrorism … • Based on European Charter of Human Rights and Fundamental Freedoms

23. Ratification of Maastricht Treaty • Denmark rejected the Treaty in referendum in June 1992 • Declarations guaranteeing subsidiarity and Danish opt-outs • Successful referendum in 1993 • Close referendum in FR • Parliamentary battle in GB • Constitutional challenge in GER  German constitutional court turned down the challegne but stated the ‘kompetenz-kompetenz’ principle

24. Implications of the ratification procedure • Increasing interest of citizens in EU matters combined with growing distrust • Legitimacy questions • Democratic deficit • Institutional balance questioned • Questions of identity and ‘remoteness’ • Need for greater transparency and accountability