Lecture 4 – Relaunching integration: The SEA, Maastricht and beyond.

1. Lecture 4 – Relaunching integration: The SEA, Maastricht and beyond. Prof. Andreas Bieler

2. Structure of the lecture: • I. The Internal Market programme and Single European Act; • II. The Treaty of Maastricht; Focus on historical background, contents of treaties and theoretical explanation;

3. I. The Internal Market programme and Single European Act: • Events leading to the revival of European integration: • ECJ ruling on the Cassis de Dijon (1979) case led to the establishment of the “mutual recognition” principle; • 1984 EP’s “Draft Treaty Establishing the European Union”; • 1984 EU European Council summit in Fontainebleu: solution to the British budget problem;

4. 2. Historical background and contents of SEA: • 1985 European Council summit in Milan: • acceptance of the Commission White Paper on the Internal Market; • decision on IGC in relation to treaty reform, intended to facilitate the establishment of the Internal Market, was taken against British, Danish and Greek objections; • Single European Act was signed in January 1986 and came into force on 1 July 1987;

5. b) Contents of Single European Act: • Treaty basis and clear timetable for establishment of Internal Market; • Council: introduction of QMV most importantly in relation to Internal Market issues; • EP: introduction of cooperation and the assent decision-making procedure; • European Court of Justice: arbiter of Internal Market and establishment of a Court of First Instance to help with the workload;

6. 3. Explanation of the revival of European integration: a) Intergovernmentalism:

7. Intergovernmentalism - Problems: • inability to account for role of transnational actors in general and TNCs in particular; • under-evaluation of Delors/Commission impetus; • why did countries agree on delegating and pooling some parts of their sovereignty? • neglect of independent role of ideas: how can the rise of neo-liberal economics be explained?

8. b) Neo-functionalism: • realisation that co-operation is the better strategy to achieve mutual economic gains; • highlighting the role of the ECJ (Cassis de Dijon case) and the EP (Draft Treaty on European Union); • leadership by Delors and the Commission; • role of the European Round Table of Industrialists: group of CE of big European TNCs; • further spill-over to new areas: e.g. EMU as a result of the free flow of capital;

9. Neo-functionalism – Problems: • no functional spill-over prior to TNC engagement: revival, not continuation of integration; • TNCs lobbied predominantly national governments; • no automaticity of integration, especially in relation to spill-over to further areas;

10. II. The Treaty of Maastricht: • Historical background: • June 1989 European Council meeting in Madrid: Delors Committee three stage report was accepted; start of first stage on 1 July 1990; decision on IGC to define stage 2 and 3; • moves towards an IGC on EPU: links between German unification and deeper political integration and between EMU and European Political Union (EPU) were forged in the closing months of 1989;

11. 2. Contents of the Maastricht Treaty: • The European Communities: • Institutional changes: co-decision procedure giving the EP the right to veto legislation; (2) Commission being subject to a vote of approval by the EP; and (3) ECJ is given the power to impose fines on member states not complying with its judgements or Community law;

12. Treaty of Maastricht – Contents: • Policy change: (1) definition of, and timetable for, EMU; (2) Social Protocol on social policy; • CFSP: development of a common foreign and security policy; • JHA: common policies in the areas of asylum, international crime, etc.

13. 3. Theoretical explanation of the Maastricht Treaty: • Neo-functionalism: • further spill-over pressures from Internal Market: pressures towards EMU; towards a common immigration policy; towards a strengthened common regional policy; and towards a common social policy; • role of Commission and Delors: early stress of necessity of common monetary policy; • pressure by European TNCs organised within the ERT and the Association for Monetary Union in Europe;

14. Neo-functionalism – Problems: • why an IGC on European Political Union? • price stability could also have been achieved via unilateral approach (independent national central banks, pegging of currency to a strong foreign currency) or multilateral approach (improved EMS); • no automaticity of spill-over pressures resulting in steps of further integration;

15. b) Liberal intergovernmentalism Liberal theory of national preference formation: • general convergence around neo-liberal economics; • France: (1) imbalance within EMS giving Germany predominance; (2) need to bind unified Germany into Europe; • Italy: attempt to introduce neo-liberal policies at home through binding in hands at supranational level; • Germany: (1) political need to reassure other countries about Germany’s commitment to EU despite re-unification;

16. Liberal intergovernmentalism: Intergovernmentalist analysis of inter-state relations: • better performance by Japan and USA required joint economic response by European countries; • integration only in area of low politics, but not in areas of high politics: CFSP and JHA are both intergovernmental pillars; • British opt-outs: EMU and Social Chapter;

17. Liberal intergovernmentalism: Extended version of regime theory: • states delegate sovereignty to supranational institutions to attain a higher decision-making efficiency: (1) ECJ as arbiter of Internal Market; (2) right of Commission to initiate new legislation; • external restrictions are accepted because they strengthen governments vis-à-vis domestic actors: Italy and the problems to push through reform;

18. Liberal intergovernmentalism – Problems: • no account of transnational actors; • no account for emergence of neo-liberalism as new economic consensus; • no explanation for why the EP gained new powers, although this made the decision-making procedures more complex rather than efficient;