introduction to european union institutions

INTRODUCTION TO INTRODUCTION TO EUROPEAN UNION EUROPEAN UNION

INSTITUTIONSINSTITUTIONS

Prof. Guglielmo Wolleb

Academic year 2013-2014

“Nation states are now too big to solve small problems, but too small to solve big ones”

Daniel Bell

SummarySummary1 Summary of development

2 Institutional development

3 Core treaties of European integration

4 Degrees of integration

5 The institutional framework

6 EU competencies

7 EU legal acts

8 The legislative process

9 The implementation process

10 The EU budget

1.1 Summary of development: key aspects of 1.1 Summary of development: key aspects of European integrationEuropean integration

Two aspects: Depth - Progressive enlargement of the level or scope of the

powers conferred on the Community bodies, exclusively or shared with the national states

Enlargement - Progressive increase in the number of countries belonging to the Community and subsequently the European Union

Two models: Integration – There is a delegation of sovereignty to a

supranational legal system integrated with the national legal system

Intergovernmental Cooperation – Long term and formalized commitment to work collaboratively in certain areas for the protection of common interests, eg. Art. 30 SEA on foreign policy

1.2 Summary of development: key stages1.2 Summary of development: key stages

1948 Signing of the Convention establishing the Organisation for European Economic Cooperation (OEEC) for the management of Marshall Plan aid (16 countries + 2 later)

1948 Western Union as a military alliance (Western European Union in 1954 composed of 7 countries)

1949 Council of Europe established by 10 countries (gradually increased up to 46) for cooperation on issues of common interest, in particular civil rights

1952 supranational European Coal and Steel Community (ECSC) 6 countries

1958 the European Economic Community (EEC) and Euratom in the implementation of the Treaties of Rome

1973 UK, Ireland, Denmark become members

1978 European Monetary System (EMS) based on the ECU

1.2 1.2 Summary of development: key stagesSummary of development: key stages

1979 First elections to the European Parliament by universal suffrage

1981 Greece becomes a member

1986 Spain and Portugal become members

1987 Single European Act and the European Community

1992 Treaty on European Union signed in Maastricht

1995 Austria, Finland and Sweden become members

1997 Treaty of Amsterdam

1999 Third stage of EMU. Euro ‘ book money’ in 12 countries

2001 Treaty of Nice

1.2 1.2 Summary of development: key stagesSummary of development: key stages

2002 Euro currency in 11 countries2002 European Convention for drafting a European Constitution2003 Greece adopts euro2004 Cyprus, Estonia, Latvia, Lithuania, Malta, Poland, Czech Republic, Slovakia, Slovenia and Hungary (EU 25) become members2004 Rome Treaty establishes a European Constitution, subsequently rejected by France and Netherlands2007 Bulgaria and Romania (EU 27) become members; Slovenia

adopts euro, Lisbon Reform Treaty to replace the Constitution, rejected by Ireland

1.2 1.2 Summary of development: Summary of development: key stageskey stages

2008 Slovakia adopts Euro 2009 The Treaty of Lisbon comes into force

after a new referendum in Ireland2013 Croatia becomes member

22 Institutional developmentInstitutional development

2.1 Foundation (1950s)2.2 Consolidation (1960s)2.3 Unblocking the deadlock (1970s) 2.4 The great revival (1980s)2.5 From the Economic Community to the European Union (1990s)2.6 Towards the enlargement, the single currency and the Treaty of Amsterdam (1990s)2.7 2000: Lisbon Strategy, Nice Treaty, enlargement, the single currency, the Reform Treaty2.8 The drivers of change

2.12.1 F Foundation: federalism oundation: federalism and functionalismand functionalism (1950s) (1950s)

Two main orientations in immediate postwar period: Federalist - build a federal economic and political

Europe based on a full project Functionalist - build a supranational institutional order

through gradual integration, area by area, starting from market unification


Several federalist inspired attempts: Benelux (economic union between Belgium, Netherlands

and Luxembourg, 1944) OEEC (Organisation for European Economic

Cooperation, (1948) Council of Europe - defend the rule of law and human

rights (1949) European Payments Union - facilitate payments between

European countries (1950) Project of the European Defence Community (EDC)

failed in 1954 for French opposition to German rearmament


Other international organisations formed in the immediate post-war: GATT NATO BRETTON WOODS WARSAW PACT COMECON

Functionalist approach prevails: federalism not imposed. Progressive enlargement by sector: Schuman Declaration (1950) and European Coal and Steel Community - 6 countries (1952)


Organs of the ECSC: High Authority (experts appointed by member

states with strong autonomy in decision making) Council of Ministers (representatives of nation-

states) Assembly (representatives of national parliaments) Court of Justice (judicial body to settle disputes) Advisory Committee (representatives of social

partners)


1957 Birth of European Economic Community and Euratom (Rome Treaties: the European Community treaty which established European Economic Community and the European community atomic energy treaty which established European Atomic Energy Community)

2.1 Foundation: 2.1 Foundation: principlesprinciples of the EC of the EC TreatyTreaty

FREE MOVEMENT OF GOODS: CUSTOMS UNION (ELIMINATION OF CUSTOMS DUTIES AND QUANTITATIVE RESTRICTIONS ON INTERNAL TRADE, EXTERNAL COMMON CUSTOMS TARIFF)

FREE MOVEMENT OF PERSONS, SERVICES AND CAPITAL COMMON AGRICULTURAL POLICY COMMON TRANSPORT POLICY COMMON TRADE POLICY RULES OF COMPETITION TAX PROVISIONS HARMONIZING NATIONAL LEGISLATION WHICH AFFECTS

SINGLE MARKET

2.1 Foundation: 2.1 Foundation: principlesprinciples of of the EC the EC TreatyTreaty

COORDINATION OF MACROECONOMIC POLICY

CREATION OF A EUROPEAN SOCIAL FUND (ESF)

EUROPEAN INVESTMENT BANK (EIB) SUPPORT FOR OVERSEAS

COUNTRIES AND TERRITORIES (France)

2.12.1 Foundation: EEC institutionsFoundation: EEC institutions

COMMISSION COUNCIL ASSEMBLY (PARLIAMENT ONLY

FROM 1962) COURT OF JUSTICE ECONOMIC AND SOCIAL COMMITTEE

2.22.2 Consolidation (1960s) Consolidation (1960s)

1960s were characterized by an ongoing battle between proponents and opponents of supranationalism. De Gaulle's France is opposed to any attempt to strengthen the powers of the Community, the adoption of qualified majority decision-making procedures and the entry of Britain into the Community. The Fouchet Plans (1961) to restrict the powers of the Community, however, are rejected.

The clash with France leads to the so-called empty chair crisis (1967) solved with Luxembourg compromise imposing a truce between opposing positions

Consequently no changes in size or areas of responsibility or level of authority take place in this period

2.22.2 Consolidation (1960s) Consolidation (1960s) The powers of the Community, however, did increase due to

the role played by the Court of Justice Two judgments of the Court of Justice led to the

introduction of two important principles that reinforce the power of the Community: direct effect and the supremacy of Community over national law (see below)

The Brussels Treaty of 1965 (fusion) combines the three Communities. Simplifies the institutional structure by unifying organs: a single Council and a single Commission

2.22.2 Consolidation (1960s) Consolidation (1960s)

Committee of Permanent Representatives (COREPER), set up. Prepares the work of the Council

The decade ends with the Hague Conference of 1969 paving the way for major changes in 1970s. At the same time Pompidou, less anti-European, replaces de Gaulle in France

2.32.3 Unblocking the deadlockUnblocking the deadlock (1970s) (1970s)

1970s are a time of great global economic instability. The demise of Bretton Woods and the two oil shocks lead to global economic crisis.

The consequences of this crisis on Europe slow down the changes set out by Hague Conference. The currency snake experiment fails

But the impasse created by French opposition is overcome and major changes occur in both the territorial size of the Community and in its fields of jurisdiction

2.32.3 Unblocking the deadlockUnblocking the deadlock (1970s) (1970s)

Territorial: Once French opposition is overcome , UK, Ireland and

Denmark become members (1973)

Institutional framework The Treaty of 1970 (Luxembourg) changed the system of

financing of the Community which is equipped with its own resources through a transfer of a percentage of the national VAT rate.

The Treaty of 1975 (Brussels) increases the power of Parliament in budgeting and establishing the Court of Auditors.

First direct elections to Parliament in 1979. It was agreed to regularize the European Council meetings

2.3 2.3 Unblocking the deadlockUnblocking the deadlock (1970s) (1970s) Policy:

The European Community expanded its field of jurisdiction (small steps on environment, energy, social, consumer protection, regional, foreign policy)

Regional policy re-launched with the creation of the ERDF (1975)

European Monetary System and the ECU (1979): EMS is a quasi-fixed exchange rate system in which the value of the currencies has limited margin of fluctuation compared to the ECU (reference currency). The value of the ECU is the average weighted value of different currencies in the system.

2.42.4 The great revival: the Single European The great revival: the Single European Act and the Single MarkeAct and the Single Market (1980s)t (1980s)

1980s characterized internationally by crisis of USSR and liberalism of USA (Ronald Reagan ) and UK (Margaret Thatcher)

Strong pro-European alliance for Europe formed between the German Chancellor Helmut Kohl and French President Mitterand

In UK, Thatcher, unwilling to give up national power is in favor of greater European economic integration

The Commission and industrial lobbies worked in the same direction towards completion and deepening of the Single Market

At the same time, as a counterweight to a greater integration of markets, there is a revival of other policies aimed at achieving a greater social and territorial cohesion, and strengthening the powers of the Community

Big changes in the European Community enshrined in a new treaty (the Single European Act, 1987)


The Single European Act includes amendments to three Communities treaties and provisions on foreign policy. Provides for institutional reforms: The European Council is mentioned in the treaty but not

yet as an institutional body of the Community Introduction of qualified majority voting in the

Council for some matters Strengthening the legislative power of Parliament: the

introduction of cooperation procedure and of assent procedure .( Parliament no longer has advisory powers only. ) (see below)

Court of First Instance in support of ECJ set up.


Single Act provides for policy: Completion of single market by 1992 (White Paper of 1985

under the chairmanship of Delors): elimination of physical fiscal and technical barriers

Economic and social cohesion policy (*Title V) Policy for Research and Technological Development (Title VI) Environmental policy (Title VII) Social policies (Title III) Institutionalization of European political cooperation in foreign

policy The Charter of Social Rights of Workers (not binding)


Significant increase in the size of the Community with the accession of Greece (1981), Spain and Portugal (1986). All three countries applied for membership in the 1970s after the end of dictatorships

Enlargement led to an increase in regional disparities inside the Community and greater urgency in launching regional policy in 1988

End of 1980s characterized by the break up of the USSR, the fall of the Berlin Wall (1989) and German reunification (1990)

German reunification speeded up monetary social and political intgegration. 1992 EU Treaty and the accession of ex-USSR states


2.52.5 From From the Economic Community to the Economic Community to the European Unionthe European Union (1990s) (1990s)

From single market to single currency From economic to social integration (Social Protocol,

European citizenship rights, other areas of non-economic jurisdiction)

From economic to political integration (Justice and Foreign Policy)

From the Economic Community to the European Union Some of these changes found in European Union

Treaty, also known as the Maastricht Treaty (1992)


In the Treaty the Contracting Parties establish a European Union based on three pillars

1. First Pillar: the European Communities (EC) which include ECSC, the EEC and Euratom

2. Second pillar: common foreign and security policy (CFSP)

3. Third Pillar: Justice and Home Affairs (JHA)

First pillar works on community method, second and third on intergovernmental cooperation.


Major innovations introduced by the EU Treaty in the institutional context: Economic and monetary union with the European System of

Central Banks and the European Central Bank (1998) (formerly EMI)

European citizenship Principle of subsidiarity Increase the power of Parliament with the introduction of co-

decision procedure in some areas The European Council becomes an institution of the

European Union for all purposes European Ombudsman


Major innovations introduced by the EU Treaty in the policies of the first pillar (EC). (The first pillar includes all topics listed in the three treaties and the acquis communautaire Protocol on Social Policy (opt-out of Great Britain and

Ireland, dropped in 1992)

Enlargement of competences (although limited) to: education, consumer protection, health, trans-European networks, industry, culture, youth

Strengthening of the cohesion policies with the creation of the Cohesion Fund


Second pillar (CFSP):Common foreign and security policy. Objectives: to defend common interests and values maintaining peace, security, international

cooperation strengthening democracy and human rights.

(Military intervention contemplated for humanitarian missions, peacekeeping. Agreement following the Treaty)


Third pillar (JHA):Provisions on judicial and political cooperation in criminal matters (asylum, border control, immigration, drugs, international fraud, judicial cooperation in civil and criminal matters, police cooperation)


Treaty specifies three stages for the monetary union: free movement of capital and macroeconomic policy coordination, convergence, and adoption of the single currency

convergence criteria for candidate countries to the euro specified for public finance, inflation and interest rates


EUROPEAN CITIZENSHIP According to the Treaty on European Union (1993): Freedom of movement and residence throughout the Union; Right to vote and stand in municipal and European Parliament

elections in the State of residence; Protection of diplomatic and consular authorities of any

Member State when the State of which the individual is a national is not represented in a third country (Article 20 TEC);

Right to petition the European Parliament and appeal to the Ombudsman.


EUROPEAN CITIZENSHIP According to the Treaty of Amsterdam (1999) the status

of"European citizen" also gives the following rights:

Right to address the European institutions in one of the official languages and receive an answer in the same language;

Right of access to documents of the European Parliament, Council andCommission, under certain conditions (Article 255 TEC);

2.52.5 From From the Economic the Economic Community to the European UnionCommunity to the European Union

(1990s)(1990s) Right to non discrimination between EU

citizens based on nationality (Article 12 TEC) and the right to non-discrimination with respect to gender, race, religion, disability, age or sexual orientation;

‘Level playing field’ for access to the European civil service.

2.6 Towards enlargement, the single 2.6 Towards enlargement, the single currency and the Treaty of Amsterdam currency and the Treaty of Amsterdam

(1990s)(1990s)1990s after the Treaty are characterized by

preparation for enlargement, the process of monetary integration, the adoption of a new treaty

2.62.6 Towards enlargement Towards enlargement (1990s)(1990s) Size increases with entry of Sweden, Finland and Austria

(1995) Negative referendum in Switzerland and Norway EU decided to expand eastward Copenhagen Criteria set out (1993) for candidate countries

regarding: rule of law, democracy, human rights, respect for minorities,

market economy, rules of competition and competitiveness, acceptance of the acquis communautaire

2.62.6 Towards enlargement Towards enlargement (1990s)(1990s)Challenges of enlargement: Political: countries in transition to democracy Economic: countries in transition to market economies and

countries with a very low per capita income Institutional: the increased size of the acquis communautaire

Agenda 2000: Analysis of the incoming countries CAP reform: policies of price support and rural development Reform of cohesion policy: concentration of resources and

reducing the number of objectives

2.62.6 Towards enlargement Towards enlargement (1990s)(1990s)

Financial instruments for candidate countries: PHARE (institution), ISPA (infrastructure and environment) and SAPARD (agriculture)

Disputes on the balance between creditor and debtor countries

2.62.6 Towards the single currency (1990s)Towards the single currency (1990s)

Third stage of EMU with the accession of 12 of 15 states (UK, Denmark and Sweden outside)

2.62.6 Amsterdam Treaty (1997)Amsterdam Treaty (1997)

1997 new treaty - makes other important changes to EU institutions and distribution of powers

Policy: principles on which the Union is based: freedom, democracy,

respect for human rights, rule of law (which applies to new member states)

EU given the power to act against various forms of discrimination (race, sexual orientation, religion, age ...)

An employment chapter (Title VIII) and a social chapter (previously only a protocol) inserted into Treaty (first pillar)

several issues related to visas, asylum rights, immigration, judicial cooperation ...moved from third to first pillar

Stability and Growth Pact included in the Treaty Schengen agreement incorporated into the Treaty (third pillar) (opt-

out of Great Britain and Ireland)

2.62.6 Amsterdam Treaty (1997) Amsterdam Treaty (1997)

Institutional modifications: Increase of the use of qualified majority Codecision procedure becomes standard Approval of the Commission President by Parliament Formalization and regulation of enhanced cooperation in the

first and third pillars Establishment of the High Representative for Foreign Policy. CFSP instruments are redefined. Common strategies” are the

responsibility of the European Council and require unanimity. “Joint actions” and “common positions” are the responsibility of the Council and require a vote by qualified majority

Scope of EU military actions defined

2.6 2.6 Amsterdam TreatyAmsterdam TreatyAims of the Schengen area Abolition of systematic checks at internal borders of the Schengen

area Strengthening of controls at external borders of the Schengen area Cooperation between police forces and possibility to intervene in

some cases beyond their borders Coordination between states in the fight against international

organized crime Integration of police databasesMembers Entrance gradually from the first agreement of 1985 Today 28 European countries, of which three, Iceland, Norway

and Switzerland are not part of the European Union. The Schengen agreements were inserted into the Treaty of

Amsterdam and the Treaty of Maastricht The United Kingdom and Ireland have exercised opt-out All new member states must adhere to the Schengen area

2.7 2000s:Lisbon strategy, Nice Treaty, 2.7 2000s:Lisbon strategy, Nice Treaty, enlargement, the single currency, the reform enlargement, the single currency, the reform

TreatyTreaty

Lisbon Strategy to boost growth and employment The Treaty of Nice Enlargement Single currency The Reform Treaty

2.7 2000s: Lisbon strategy2.7 2000s: Lisbon strategy Concern for Europe's slow growth and high

unemployment were present from1990s 1990s saw European employment policy 2000 Lisbon Strategy launched with the ambitious goal

of making the EU the most competitive and dynamic knowledge-based economy by 2010. Objectives in terms of growth and employment to be achieved by that date.

Adoption of Open Method of Coordination Unsatisfactory results in a mid-term review of the Lisbon

Strategy in 2005 leads to review of strategy

2.7 2000s:Treaty of Nice2.7 2000s:Treaty of Nice

Enlargement to EU 27 countries makes it necessary to revise decision-making for reasons of simplicity and efficiency and to reconcile different procedures. In particular, the voting mechanism must take into account the size of the states, the number of states and inhabitants. (More weight for large states but small states cannot disappear. Each decision must be approved by a significant portion of the population)

These challenges are addressed by the Treaty of Nice (2001), which brings several changes:

2.7 2000s:Treaty of Nice2.7 2000s:Treaty of Nice Institutional:

Changes in the number of Commissioners from 20 to 27, transitional, and then reduced in 2014 by fair rotation

A new weighting of states’ votes in the Council Strengthening the powers of the President, now elected by

qualified majority New method of reaching a qualified majority in Council with

the adoption of a criterion that takes into account the votes, the number of states and, on request, inhabitants

Further enlargement of the scope of application of qualified majority voting

Possibility of enhanced cooperation expanded and simplified

2.7 2000s:Treaty of Nice2.7 2000s:Treaty of Nice

Scope of the codecision procedure and assent expanded

European Parliament - change in number (from 700 to 732) and in composition by State

Charter of Fundamental Rights (political statement, not in the Treaty)

2.72.7 2000s: 2000s: enlargementenlargement Europe increased from 15 to 27 member states

2004: Cyprus, Malta, Estonia, Latvia, Lithuania, Slovenia, Czech Republic, Slovakia, Hungary and Poland

2007: Bulgaria and Romania

EU population grows by 29% Surface increases by 34% EU GDP increases by 9% Per capita GDP falls by 16% Candidate countries are Croatia, Turkey and Macedonia

2.72.7 2000s: single currency 2000s: single currency Euro introduced in 12 countries in 2002 (15 with

Cyprus, Malta and Slovenia, 16 with Slovakia 17 with Estonia)

New Member States to adopt the euro when they meet requirements

Britain, Denmark and Sweden have not adopted the euro. Britain and Denmark have received the opted out

2.72.7 2000s: the Reform Treaty2000s: the Reform Treaty Attempt to make a qualitative leap in EU policy through the

adoption of a European Constitution The Constitution was intended to create a more democratic

and transparent Europe Constitution drafted by a Convention composed of national

and European parliamentarians, members of the Commission and members appointed by states

approved in 2003 rejected in referendums by France and the Netherlands abandoned after lengthy negotiations replaced by Reform Treaty, the

Lisbon Treaty, came into force in 2009

2.72.7 2000s: the Reform Treaty 2000s: the Reform Treaty

The reform treaty amends the Treaty on the Union and the Treaty on the European Community

The “Treaty on the European Community” is renamed as “Treaty on the functioning of the European Union”

The treaty on European Union sets out: The broad principles governing the E.U. such commitments to

democracy The general role of the institutions The principles governing who may apply to join the E.U. How a member state may leave the E.U. The operation of the CFSP

The TFEU sets out the detailed operation of the institutions and of all other policy areas


The Treaty intended to make Europe more democratic through these changes: strengthening the role of the European Parliament with the

extension of the co-decision procedure. Parliament now shares legislative power with the Council

national Parliaments have the power to check compliance with the principle of subsidiarity testing in advance drafts of community law

citizens initiative: the opportunity for a group of at least one million citizens of different States to ask the European Commission to submit new proposals

clear division of competences between exclusive jurisdiction, shared jurisdiction and expertise to support, coordinate and complement the action of Member States

recognition of the possibility of withdrawal from the Union


Categories of EU competencies or jurisdiction

Exclusive jurisdiction: customs union, competition rules, monetary policy European countries, marine biological resources, trade policy union

Shared powers: internal market, some social policies, cohesion, agriculture, fisheries, environment, consumer protection, transport, trans-European networks, energy, space of freedom, security and justice, public health, research

Expertise to support, coordinate or supplement the actions of the States: health, industry, culture, tourism, education, youth, sports, vocational training, civil protection, administrative cooperation


Treaty aims to make Europe more efficient through these changes: Extension of qualified majority voting (55% of

member states and 65% of the population) from 2014

President of the European council in office for two and a half years with one possibility of renewal

Reduction of the number of commissioners to 2 / 3 of the number of states by rotation from 2014


The Treaty intended to make Europe freer, safer and with more solidarity Values and goals on which union is based are specified and

strengthened The charter of fundamental rights (with opt out of UK and

Poland) inserted in the Treaty. Six categories of values:1. Dignity2. Freedom3. Equality4. Solidarity5. Citizenship6. Justice

Solidarity clause between MS covering natural disaster, terrorist attacks and energy crisis

Qualified majority voting introduced for internal justice and security (opt out UK and Ireland)

2.72.7 2000s: the Reform Treaty 2000s: the Reform Treaty Treaty aims to strengthen the international role of

Europe through: Greater power to senior representative of foreign

affairs who is also commission vice-president New European service for external action EU gets legal personality Enhanced cooperation regulated and made more

flexible No qualified majority voting for foreign policy

2.82.8 The drivers for ChangeThe drivers for Change

The burden of interest: the interest of nation states (negotiating stance) the intent to maintain control of decision-making (not to

delegate national sovereignty) The role of institutions

the strength of rules (the rules affect the processes) the autonomy of European institutions

(institutions pursue their own interests) The power of ideas

The weight of ideologies: federalism and functionalism Effects of culture and national traditions

The external context

3.13.1 C Core treaties of European integrationore treaties of European integration

Treaty Key points

ECSC Treaty Ensure supranational management of two key resources for the development of European industry, within a free trade area

Treaty of Rome (TEC)

Establishment of the European Economic Community (Common Market);introduction of common policies (agriculture, trade, transport, competition)

Treaty of Luxembourg

Equip the European Economic Community with its own resources to replace the contributions of Member

Single European Act

Completing the internal market by 1992, introducing new commmunity policies (economic and social cohesion, research and technological development, environment)

3.1 C3.1 Core treaties of European integrationore treaties of European integration Treaty Key points

Treaty on European Union

Establishment of the European Union (3 European Communities + PESC + JHA );achievement of economic and monetary union by 1999, introducing further policies (industrial competitiveness, trans-European networks development cooperation)

Amsterdam Treaty

Introduction of employment policy, the creation of the office of High Representative for Common Foreign and Security Policy

Nice Treaty Institutional reforms for the enlargement (composition of the Commission and Parliament, Council weighted votes, majority voting extension, simplification reinforced cooperation). Charter of Fundamental Rights

Treaty of

Lisbon

More control power to national parliaments; greater citizen power; strengthening of the European Parliament and EU international role; extension of qualified majority voting; Fundamental Rights Charter; possibility of withdrawal from the Union; institutionalization of the figure of President of the European Council; clear distribution of powers

4.1 Degrees of integration4.1 Degrees of integration

DE

GR

EE

OF

INT

EG

RA

TIO

N O

F P

OLIC

IES

Integration of foreign policy and home affairs; common citizenship

200?

Single currency and Supranational monetary policy

2002Negative and positive integration of policies

Only 17 of 27 are full membersFreedom of

movement workers, goods, services and capital

1992Aim of single market not yet reached

Free circulation of goods inside single border

1968Elimination tariffs and trade restrictions

1960

FREE TRADE AREA

CUSTOMS UNION

SINGLE MARKET

SINGLE MARKET

MONETARY UNION

POLITICAL UNION


The first step of economic integration is the creation of a free trade area. Member States remove tariff barriers (tariffs) and quantity (quotas) on trade in goods between Member States

The second step is Customs Union - common external customs tariffs or a common external customs legislation. This first two steps were achieved 1950s-1960s

The third step - creating an internal market for goods by eliminating non-tariff barriers. Three types of non-tariff barriers exist: a) physical barriers (border control) b) national standards for different products, c) fiscal barriers (different tax regimes result in different prices and distort competition)


Breaking down barriers, tariff and non-tariff, can be implemented through positive or negative integration Positive integration - e.g. definition of essential

requirements in establishing common standards for different products

Negative integration - elimination of tariffs or state aid or the application of the principle of mutual recognition.

4.1 Degrees of integration4.1 Degrees of integration The principle of mutual recognition derives from judgment by

Court of Justice on Cassis de Dijon The ruling stems from the 1979 case brought by France to

Germany that prevented the import of Cassis liquor because its alcohol content was lower than that required under German law. The Court of Justice ruled that the ban was contrary to the principle of free movement of goods laid down by the single market. It thus laid down the principle of mutual recognition that if a commodity circulates freely in a member state because it has been produced in accordance with the standards of that country, it must do so in any other European country, unless there are proven reasons of national collective interest in the opposite direction. There were no such reasons in the Cassis de Dijon case.

4.1 Degrees of integration4.1 Degrees of integration With the single European market - the fourth step - free

movement of goods extended to services, capital and labour Services – attempt to remove restrictions on banking and

insurance services, transport services, telecommunications, energy and broadcasting, on the exercise of professional services, public sector procurement. It set out the rights to provide services abroad and establishment of a company abroad. This goal is pursued with the provisions of the SEA on completing the single market by 1992 and subsequently

Control on capital movement eliminated. Foreign bank accounts, foreign securities and stocks and real estate can be bought and sold (Maastricht)

Restrictions on the movement of workers eliminated, rights of workers abroad, different benefit systems matched (1960s)

On movement of persons, new provisions only with the Schengen Agreement of 1997 (Treaty of Amsterdam)

4.1 4.1 Degrees of integrationDegrees of integration Fifth step - monetary union which is pursued with the

currency snake and later with the European monetary system and finally the creation of the euro in 2002

Monetary union implies common monetary policies managed by the European Central Bank that controls exchange rate, interest rate and inflation rate

Economic union is the last step of economic integration and involves coordination of all macro-economic policies other than monetary, including taxation policy. The coordination of these policies is still insufficient

Political integration is an ongoing process. In particular, foreign policy and domestic politics are still essential prerogative of nation states, despite the progress made by the Treaty of Lisbon


Competition policy is complementary to the policy of building the single market

Two key instruments used to guarantee market competition: Direct instruments addressed to companies to

prevent monopolistic tendencies: collusive agreements, mergers, abuse of dominant position in etc.

Direct instruments addressed to MS: regulation of state aid

5 The institutional framework5 The institutional framework 5.1 EU institutions 5.2 European Council 5.3 Council of Ministers 5.4 European Commission 5.5 European Parliament 5.6 European Court of Justice 5.7 The European Court of Auditors 5.8 Financial organs 5.9 Advisory bodies

5.1 EU institutions5.1 EU institutionsName Composition

European Council Heads of State and Government and Chair of the Commission assisted by the Ministers of Foreign Affairs and a member of the Commission

Council of Ministers 28 members, with six-month presidency rotating in turn.

Commission 28 State, appointed for 5 years by national governments and approved by the European Parliament. 24 from 2014

European Parliament 751 members elected by universal suffrage for 5 years

Court of Justice 25 judges and 8 advocates-general appointed by the governments for 6 years with partial-three-year turnover

Court of Auditors 28 members appointed by Council for 6 years

Central European Bank

Independent institution with legal status. Executive Committee = Executive Committee of 6 MS + 6 presidents of central banks of Euro countries

E.S.C., CoR 317 members each appointed by Council for 4 years

5.2 European Council5.2 European Council

The European Council, approved by the Single Act of 1986, incorporated in the Treaties of Maastricht, becomes an official body with Lisbon. It is a decision-making body in the political rather than technical sense: it does not vote on the measures but acts on the basis of "consensus" Provides the impetus for development of EU and defines general political guidelines through the Conclusions (meets at least twice a year)It has jurisdiction on questions of European integration and on those of cooperation between states (e.g. foreign policy)Resolves disputes on most controversial European dossiers President is elected for 2 ½ years by a qualified majority and is eligible for re-election only once

5.3 Council of Ministers5.3 Council of Ministers

Main decision making body. Chaired by each Member State with a six-monthly rotation. Exercises six key responsibilities:

1. pass laws, together with Parliament, in many sectors 2. coordinate the economic policies of MS (see the E.S.)3. conclude international agreements between the EU and other

countries or international organizations 4. approve the EU budget together with the European Parliament 5. develop Common Foreign and Security Policy (CFSP),

based on guidelines set by the European Council 6. coordinate cooperation between the courts and national police

forces on crime Acts by qualified majority, except in some particularly

sensitive areas(eg taxation, CFSP or policies on asylum and immigration) for which unanimity is required

5.4 European Commission5.4 European Commission

Executive branch, independent of national Governments. Composed of one member from each national state. Four main roles:

1. Proposes legislation to Parliament and the Council (exclusive "right of initiative") in respect of the principle of subsidiarity

2. Manages and implements policies and manages the EU budget (but most of the spending is done by national or local authorities). Manages a set of common policies and community programs (Life +, Cultura 2007, Media Plus, etc.)

3. Oversees application of European law (together with the Court of Justice). Operates as a "guardian of the treaties" having the power to initiate infringement proceedings and to refer to the Court of Justice, which has power to impose fines

4. Represents the EU internationally as spokesperson and is responsible for negotiating international agreements on behalf of the EU

5.4 European Commission5.4 European Commission

The Commission President is chosen by the European Council and approved by parliament

Commission Vice-President is Representative for Foreign Policy

Commission has an administrative apparatus divided into twenty-eight directorates general and twelve services

5.5 European Parliament5.5 European Parliament

754 members, 3 main functions:

1. shares legislative power with the Council in many policy areas, through the consultation, co-decision or assent procedures. Can ask Commission to present legislative proposals

2. exercises democratic supervision over other EU institutions and in particular the Commission. Has the power to approve or reject the nomination of Commissioners and the right to censure the Commission as a whole. Reviews the reports of the Commission, has authority to question both the Commission and Council and to set up committees of inquiry

3. shares with the Council the power on the budget and can influence EU spending. At the end of the procedure can either approve or reject the budget

5.5 5.5 European ParliamentEuropean Parliament

Consultation: the Council consults Parliament, the EESC and the CoR. Parliament may approve the Commission proposal, reject it or ask for some changes (in this, the Commission may accept and pass the amended proposal to the Council)

Assent: the Council must obtain consent (absolute majority) of the European Parliament for decisions of particular importance. There is no possibility of amendment

Codecision: main procedure used in the current legislative process. Parliament shares legislative power equally with the Council. If the Council and Parliament cannot agree on the proposed legislative text, it is submitted to a Conciliation Committee, composed of representatives of the Council and Parliament in equal numbers

5.5 European Parliament5.5 European Parliament

MEPs aggregate into politically homogeneous groups, not by nationality

The European Parliament works through parliamentary committees

5.6 European Court of Justice5.6 European Court of Justice

The Court ensures that EU legislation is interpreted and applied uniformly in all countries of the Union, ensures that Member States and institutions act in accordance with the law and has the power to judge disputes between Member States and Community institutions, businesses and private citizens. The Court rules on claims and procedures submitted to it:

1. Preliminary rulings. In case of doubt about the interpretation or validity of a Community rule, a national court may, and sometimes must, ask the Court for an opinion

2. Failure to fulfil an obligation, A MS may be taken to the Court by the Commission or another MS for failing to act to meet its obligations under the treaties or E.U. secondary legislation

3. Actions for annulment submitted by the MS, of legal acts adopted by the Parliament or the Council

5.6 European Court of Justice5.6 European Court of Justice

4. Actions for failure to act in case of non-compliance with the obligations laid down by treaties by European Parliament, Council and Commission 5. Actions to establish liability: in an action for damage the Court rules on the liability of the E.U. for damage caused by its institutions or servants in the performance of their duties

5.7 5.7 The European Court of AuditorsThe European Court of Auditors Checks that EU funds are collected and legitimacy, relevance and proper purpose of expenditure.

OBJECTIVE: To ensure that taxpayers get maximum value OBJECTIVE: To ensure that taxpayers get maximum value for their moneyfor their money

1. Checks budget financial provision in accordance with transparency and efficiency

2. Has the right to audit any person or organization handling EU funds

3. Assists European Parliament and Council through the presentation of an annual report containing the financial audit of previous year and issues a declaration of assurance of the budget

4. Makes recommendations on proposed financial legislation in EU and on EU anti-fraud activities

5.8 Financial organs5.8 Financial organsEuropean Central Bank. Independent of politics. Manages the euro,

defines and implement economic policy and monetary policy. Operates under the “European System of Central Banks” (ESCB), which includes all 27 EU countries. Maintains price stability in the euro area (inflation under 2%). Organs: Executive Committee (President, Vice President and 4 others), Governing Council (representatives of central banks of Euro countries), General Council (representatives the central banks of all EU countries). The president and members of the Executive Committee are nominated by national governments.

Investment Bank. Grants loans for the financing of projects of European interest, such as road and rail connections, airports or environmental schemes, with particular attention to economically disadvantaged regions, candidate countries and developing countries. Funds small businesses

Fund for investment. Provides venture capital to small and medium-sized enterprises (SMEs), particularly to newly established companies and technology-oriented activities. It also provides guarantees to financial institutions, e.g. banks, to cover their loans to SMEs

5.9 Advisory Bodies5.9 Advisory Bodies European Economic and Social Committee. Representing

employers, trade unions, farmers, consumers and other interest groups that collectively constitute the "civil society". Three fundamental tasks:

1. formulate advice to the European Parliament, the Council or the Commission, either on their request on its own initiative;

2. allow greater involvement and participation of civil society in EU policy making;

3. strengthen the role of civil society in third countries and promote the establishment of structures based on same model

Committee of the Regions. Representing local and regional authorities of Europe. Must be consulted on matters of regional policy, environment, education and transport sectors and all of which concern local and regional governments. On its own initiative may submit opinions to the Commission, the Council and Parliament.

6.1 EU competencies6.1 EU competencies Areas of exclusive competence

Customs union Monetary policy eurozone Conservation of marine biological resources under the

Common fishery policy Common commercial policy Where international agreements is necessary to enable the

Union to exercise its internal competence

Common foreign and security policy The Union shall have competence… to define and

implement a common foreign and security policy, including the progressive framing of a common defence policy

Area of shared competences Internal market Aspects of social policy Economic, social and territorial cohesion Agriculture and fisheries Environment Consumer protection Transport Trans-European networks Energy Area of freedom, security and justice Aspects of public health safety Technological development and space Development and humanitarian aid

6.1 EU competencies6.1 EU competencies

Areas of policy coordination Member states’ economic policies Member states’ employment policies Member states’ social policies

Areas of supporting, coordinating or supplementary action Protection and improvement of human health Industry Culture Tourism Education, vocational training, youth, and sport Civil protection Administrative co-operation

6.1 EU competencies6.1 EU competencies

7 EU legal acts7 EU legal acts

7.1 EU legal acts 7.2 Binding legal instruments 7.3 Non-binding legal instruments 7.4 The principle of subsidiarity 7.5 The open method of coordination 7.6 Doctrine

7.1 EU legal acts7.1 EU legal acts

Hard or binding law:

• Regulations

• Directives

• Decision

Soft law (non-binding):

• Recommendations

• Opinions

• Statements

• Guidelines

Primary (or original) Community law consists of 2 core treaties: TFEU and TEU and amendments.

Secondary (or derived) law is emanated by Community intitutions.

Primary law prevails over conflicting national law (principle of "primacy")

7.2 7.2 Binding legal instrumentsBinding legal instruments

Regulation binding in its entirety and directly applicable in all MS

Directive binds MS to which it is addressed as regards the result to be achieved, leaving national authorities discretion as to the form and means of attaining it. It requires the receipt into national law, with the partial exception of self-enforcing directives

Decision binding in its entirety for those whom it is specifically addressed. In essence similar to national legal and administrative tool. Used by institutions to apply Community law in actual cases

7.3 7.3 Non-binding legal instrumentsNon-binding legal instruments

Recommendation and Opinion are not binding

In practice a whole series of atypical non-binding acts, not set out in Article 249 of the EC Treaty have developed. E.g. Inter-institutional agreements, resolutions, findings, communications, guidelines, green and white papers

In addition, specific legal instruments are used within the CFSP, such as strategies, actions and common position.

7.4 7.4 The principle of subsidiarityThe principle of subsidiarity

Subsidiarity principle is intended to ensure that decisions are taken as close as possible to the citizen. Criterion for allocating functions between different levels of government, does not necessarily imply decentralization

According to Art. 5 (3b) of the TEU: The Community act within the limits of the powers conferred

upon it and the objectives assigned to it by the Treaties In areas which do not fall within its exclusive competence, the

Community takes action only if and insofar as the objectives of the proposed action can not be sufficiently achieved by Member States (principle of subsidiarity) and can therefore, by reason of the scale or effects of the proposed action be better achieved at Community level

Community action does not go beyond what is necessary to achieve the objectives of this Treaty (principle of proportionality)

7.5 The open method of coordination7.5 The open method of coordination

Governance based on soft law (guidelines etc...) Cooperation between different levels of institutions peer review benchmarking Continuous learning on a reciprocal basis

Allows EU to intervene where it has no specific jurisdiction without MS delegating

sovereignty where decision making processes are blocked more efficiently in multilevel governance

7.6 Doctrine7.6 Doctrine

Principle of solidarity: the States must take all appropriate measures to fulfil their obligations under the Treaty... and refrain from measures that could compromise the achievement of the objectives of the Treaties (from art. 10 of the Treaty on European Communities)

Principles drawn from different judgments of the Court of Justice: Principle of primacy of Community law: in cases of

conflict, rules of Community law prevail over national law (Costa v. Enel 1964)

Principle of state responsibility: the state is responsible for failure to comply with European Community law and therefore liable to penalties (Francovich v. Italy 1991)

Principle of direct effect: states that the European legislation confers individual rights to citizens that may be invoked before national courts. The principle of direct effect applies to the articles of the Treaties and to Regulations or to the Directives when they have direct applicability characteristics (sufficient precision and unconditionality) but only in the vertical direction, i.e. in the relations between citizens and state and not between citizens and other citizens. The application of the principle is in essence that the national court disapplies any national provision which is contrary to Community law (Van Gend en Loos 1963)

Principle of mutual recognition (Cassis de Dijon case)

7.6 Doctrine7.6 Doctrine

8.1 The legislative process8.1 The legislative process

The legislative processes of E.U are very complex and vary depending on the subjects covered

Main actors: Council, Commission and European Parliament

In matters where Council policies prevail, policies have an intergovernmental character

In matters where Commission and European Parliament prevail, policies have a supranational character

This balance varies according to subject

Community’ method prevails. Phases: The commission has the monopoly on legislative

initiative . Legislation must be approved by both European

Council and Parliament, otherwise the act is not adopted.

The Council votes by qualified majority voting The commission is responsible for implementing policy The Court of Justice ensures compliance with the law

Co-decision is the prevailing community method of making European laws

8.1 The legislative process8.1 The legislative process

‘Co-decision procedure takes place between Parliament and the Council .

The council adopts an act on Commission’s proposal Parliament has the power to ask for amendments to an

act adopted by the council . Council can accept the amendments, in which case the

act is approved Can reject amendments in which case the act returns to

parliament for a second reading Parliament may pass or reject measure. Rejected measures go to conciliation. Only if there is

agreement, is the measure passed

8.2 The legislative process: the 8.2 The legislative process: the

codecision procedurecodecision procedure

On Common and foreign security policy, the community method is not adopted.

Main actors: the European Council, the Foreign Council of Ministers, the High Representative for foreign and security policy.

Commission and European Parliament play a minor role

QMV is not adopted. Decisions on sensitive matters are taken unanimously

Decisions are not legislative in nature

8.3 The legislative process on common 8.3 The legislative process on common

and foreign security policy and foreign security policy

8.4 The legislative process: the 8.4 The legislative process: the budgetary procedurebudgetary procedure

Multiannual budget and yearly budgetThe yearly budget must be congruent with the

multiannual budgetThe multiannual budget is proposed by the

Commission, approved by the European Council and signed by the Council of Ministers

The yearly budget is proposed by the Commission, signed by the Council and get the consent of the European Parliament

8.5 The legislative process: 8.5 The legislative process: the budgetary procedurethe budgetary procedure

Specific decision-making processes in a number of other specific matters e.g.: revision of the Treaties decisions on enlargement conduct of monetary policy coordination of other economic policies

9.1 The implementation 9.1 The implementation process: the actorsprocess: the actors

A law must be approved and then implemented

The main actors of the implementation process are: the National States, the Commission, the Court of Justice of E.U. and the Court of Auditors

9.2 The implementation 9.2 The implementation process: the Commissionprocess: the Commission

The Commission has overall responsibility for the implementation of the E.U.

It is direct implementer of some policies centrally administered

It shares with national states the implementation of some policies

9.2 The implementation 9.2 The implementation process: the Commissionprocess: the Commission

It controls that European directives are embodied into national law and implemented on the ground

It has the power to bring the case to the Court of Justice if member states do not implement directives

9.3 The implementation 9.3 The implementation process: the Court of Justice process: the Court of Justice

of EUof EUThe Court of Justice of E.U. comprises:

– The European Court of Justice– The General Court– The European Union Civil Service Tribunal

The European Court of Justice comprises 28 judges and 8 advocates general appointed by member states

9.3 The implementation process: 9.3 The implementation process: the Court of Justice of EUthe Court of Justice of EU

The Court ensures that EU legislation is interpreted and applied uniformly in all countries of the Union, ensures that Member States and institutions act in accordance with the law and has the power to judge disputes between Member States and Community institutions, businesses and private citizens. (See above for the specific rulings)


Political role of the European Court of Justice

The rulings of the ECJ have– Strengthened the European Parliament

(confering legal personality to the EP)– Extended the applicability of European law

(confering rights to individual citizens: principle of direct effect)


Established the supremacy of European law over national law (principle of primacy of community law)

Affected important European policies, specially the single market policy (Cassis de Dijon)

See above

9.4 The implementation process: 9.4 The implementation process: the European Court of Auditorsthe European Court of Auditors

10.1 EU budget10.1 EU budget

According to the Council decision of 1970's, resources derive “naturally” from four areas:

1. Customs duties levied on imports at the external borders based on the Common Customs Tariff applied from 1968

2. Sugar levies paid by sugar producers against export subsidies

3. Value Added Tax (VAT), a maximum rate of 0.5% calculated on a harmonized level tax base

4. Gross National Income (GNI), calculated at a rate determined annually on the basis of the difference between expenditure and all other revenue referred to above (overall ceiling of 1.24% of the income of the EU) (nowadays more than 70% of revenue)

“The budget, without prejudice to other revenue, be financed wholly from own resources” Article 201 TEC

10.2 Budget 2007-201310.2 Budget 2007-2013 To ensure the stability of the budget an inter-institutional agreement defines the multiannual financial budget, divided into sections, which sets limits to various EU spending

Commitments (in million €, 2004 prices) 2007-2013 % tot

Sustainable growth 382 139 44,21a. Competitiveness for growth and employment 74 098 8,61b. Cohesion for growth and employment 308 041 35,6

Conservation and management of natural resources 371 344 43Of which market spending and direct payments 293 105 33,9

Citizenship, freedom, security and justice 10 770 1,2EU as global actor 49 463 5,7Administration 49 800 5,8offsets 800 0,1Total commitments 864 316 100in % of GNI 1,048 %Total payment appropriations 820 780in % of GNI 1,00 %Margin 0,24 %Own resources ceiling in % of GNI 1,24 %

ReferencesReferences

European Union Politics, Michelle Cini and Nieves Perez-Solorzano Borragan, Oxford University Press, 2010

Politics in the European Union, Ian Bache- Stephen George - Simon Bulmer, Oxford University Press, 2011

introduction to european union institutions

Documents

european constitution

european convention

european parliament

european community1992

european uniontwo models

treaty of lisbon

rome treaty

lisbon reform treaty