Development of the EU

Table of Contents

The Composition of the European Union

The European Union consists of 28 member state with nearly 500 million inhabitants. Its member states account for over 30 percent of global output.

The European Union has evolved progressively. The original six members (France, West Germany, Italy, Belgium, the Netherlands, and Luxembourg were joined by Ireland, the United Kingdom, and Denmark in 1973, Greece in 1980, Portugal and Spain in 1986, Sweden, Austria, and Finland in 1995).

Eight former communist central and eastern European countries, Czech Republic, Slovakia, Hungary, Slovenia, Poland, together with former Soviet Republics of Latvia, Estonia, and Lithuania together with Malta and Cyprus joined in May 2004. Bulgaria and Romania joined in 2007. Croatia joined in 2013.

The essence of the European Union is the pooling of sovereignty by its members in particular areas of competence. This is achieved through the institutions of the Union.

European Union legislation has had the most profound impact on the laws of its member states, particularly in areas relevant to business and commerce.

Original Treaties- the 1950s

The original body with the six original members comprised the European Steel and Coal Community formed in 1951. It set up a common market in coal and steel. It consisted of a High Authority equivalent to the present day Commission, a Council of members and Assembly of MPs from the domestic parliaments and a court of justice which interpreted and enforced the Treaty.

The European Atomic Energy Community was a parallel institution providing three equivalent institutions and functions in relation to nuclear energy.

The European Economic Community (the EEC) which later evolved into the European Communities and the European Union was founded by the six original members of the ECSC and Euratom by the Treaty of Rome in 1957. It formed the Commission as the executive or administrative body of the community. This legally independent entity is the guardian of the Treaty. The Treaty allowed for majority voting and decision on certain matters.

It provided for a Council which was the primary lawmaking body. It provided for a parliament made up of representatives of member states. An independent court of justice was also established charges with the interpretation of the EEC law and the resolution of disputes, enforcement of community law. Certain other bodies were also established.

The 1960s

Following a virtual walkout by France from the EEC in the mid-1960s, the so-called Luxemburg accord was adopted which allowed for the veto. Even where the treaties allowed the EEC to proceed by majority vote, where the vital national interest of a country was involved, unanimity would be required.

In 1967, the three Communities mentioned above which worked in parallel were formally merged.

Ireland and the UK sought to join the EEC from the early 1960s. It was recognised that it was only feasible for Ireland to do so in parallel with the United Kingdom. After two failed attempts to join caused by rejection by France, it was finally agreed in 1969 at The Hague Summit that the EEC would be enlarged by the admission of Ireland, the UK, Denmark, and Norway.

The 1970s

On January 1^st, 1973, Ireland, the UK and Denmark joined the EEC. Ireland approved joining the by a referendum. Norway did not join following a failed referendum. In 1975 following splits in the UK’s Labour Government, a referendum was held in the UK which affirmed the decision to join.

The Hague summit also established European political cooperation. This involved a framework to exchange views and adopt common positions outside the strict legal institutions of the EEC. This arrangement was ultimately formalised much later in the Common Foreign and Security Policy provisions of the Treaty on European Union. It remains a political intergovernmental arrangement rather than a community-based arrangement with its own independent legal base.

Early attempts were made to create a European and monetary union in the late 1960s. The European exchange rate mechanism involved countries agreeing to keep their exchange rates within very narrow bounds. Due to the explosion of inflation following the oil crisis in 1973, the earlier attempts at European monetary union collapsed.

The European Monetary System was adopted in 1979. The participating states (including Ireland, but excluding the United Kingdom) agreed to keep their currencies within a very narrow range by intervening in the foreign currency markets as necessary. The arrangements worked in a broadly satisfactory manner until 1992. Ireland undertook a substantial competitive devaluation in 1986.

The UK formally joined the European Monetary System in the early 1990s. However, the system effectively broke down in 1992 following sustained attacks on the value of certain weaker currencies. Several countries including the United Kingdom and Italy and Ireland were forced out of the mechanism. Ireland took a further 10 percent devaluation on the value of its currency.

The mechanism continued but the currency fluctuation ban was expanded from 2.25 percent to 15 percent either side of a central target. However, shortly afterwards, the Treaty on European Union embodying the European Monetary Union was adopted.

The period from the 1970s to the mid-1980s was a period of stagnation in terms of European Union development. The meetings of the heads of government were formalised into the European Council in 1974. The first directly elected European Parliament met in 1979.

The 1980s and the Single European Act

The European Union was revitalised in the 1980s. The French and German governments under Francois Mitterand and Helmut Kohl together with the appointment of dynamic Commision President Jacques Delors adopted a program to complete the internal market by 1992. This would seek to remove all remaining barriers to trade within the European Union and open European Union borders by the end of 1992.

The Single European Act was the first significant amendment to the European Treaties. The Treaties increased the areas in which qualified majority voting by the Council ( i.e., the member states) would be binding. This applied to two-thirds of the estimated 300 measures necessary to complete the internal market.

The law making role of the European Parliament was enhanced. It had greater responsibility in respect of law making (which still remained mostly with the Council, i.e., the governed ministers) and was given increased competence in other areas.

The European Council informally established in 1974 was formalised. This comprises of twice-yearly meetings of the heads of government (and state in the case of France) which considers significant issues and matters not resolved at the individual (ministerial) council level.

The competence of the European Union to pass laws was extended to cover

the protection of the environment,
research and regional policy,
consumer protection, and
social cohesion.

The European Political Cooperation mechanism was reorganised formally within the Community treaties. The European political cooperation mechanism was formalised and embedded in the European Union institutions. The EPC allows for the adoption of common foreign policy positions by the European Union member.

The Treaty also saw the expansion of the European Union competence in respect of the social and employment rights. The EU was permitted to adopt directives to improve health and safety in the working environment. A protocol on social policy was attached to the Treaty on European Union in 1992.

The adoption and completion of the single market by 1st of January, 1993 was achieved. Most dramatically, it led to the dismantling of almost all border and customs controls between the states including those on the land frontier between Ireland and Northern Ireland.

The Common Agricultural Policy was reformed in the early 1990s with a move away from market intervention towards direct payments.

The late 1980s and early 1990s saw the dismantling of the Iron Curtain and the reunification of Germany. Under the German constitution, East Germany automatically became part of Germany and the European Communities. France exerted political pressure to strengthen political and monetary union to counterbalance German reunification.

The 1990s the Treaty on European Union

The Dublin Summit in 1990 convened an intergovernmental conference from which emerged the Treaties of Maastricht on European Union. The objectives of the Treaty on European Union included

the establishment of a single currency within the framework of economic and monetary union,
establishment of citizenship of the EU,
promotion of economic and social progress with high employment and sustainable development through the strengthening of economic and social cohesion,
promotion of a common foreign and security policy, closer ties in the area of justice and home affair;
protection of human rights;
the principle of subsidiarity.

Subsidiarity was designed as a break on the centralisation tendency of the European Union. It is the principle that matters should be administered at the level closest to the citizen.

The Treaty broadened the Union\’s objective in the areas of industrial policy, telecommunications, energy, consumer protection, industrial policy, health, and education. The existing competences in environmental protection were extended. The role of the European Parliament in decision-making was further enhanced. The time framework for the establishment of the Economic and Monetary Union was set.

The Justice and Home Affairs area seeks cooperation in criminal and civil justice matters, immigration, asylum, judicial cooperation, customs cooperation, and policing.

The competences were based on intergovernmental cooperation rather than on the institutions of the European Union. Unanimity would be required for the adoption of measures.

The Treaty of Amsterdam

The Treaty of Amsterdam was signed in October 1997 and became effective on 1st May 1999. The objectives of the European Union are further extended in the areas of:

Economic and social progress;
Justice and security,
EU citizenship.

There was an obligation placed n the EU in passing laws to assess them in the light of discrimination and environmental protection. EU has granted powers in respect of entry into the EU, movement within the EU and coordination of employment. The Treaty embraced the stability pact and laid out the final time frame for the Economic and Monetary Union.

The Social Charter on social policy, education training, and youth were embodied in the EU after having been finally accepted by the new Labour government in the United Kingdom.

The role of the European Parliament was greatly enhanced and the co-decision procedure by which laws are made by both the Council (the ministers) and the Parliament was extended to a wider range of areas. Greater freedom of information was provided for. EU citizens were given more extensive rights of access to EU documentation.

The EU Treaties allow for enhanced cooperation in certain areas. This is where some member states introduce common arrangements between themselves which are not acceptable to all member states.

The first Schengen Agreement operated between France, Germany, and the Benelux countries. They abolished all border control on 1st January 1990 between those states. It involves coordination and strengthening of policies on asylum, deportation, visa, security, drug trafficking and crime.

Under the Amsterdam Treaty, the Schengen agreements and arrangements were incorporated into the EU framework. The EU states that joined after May 2004 were bound by the Schengen agreement and subject to the progressive statutory abolition of border control.

Ireland, UK, and Denmark are not a party to the Schengen agreement. Ireland and the UK have a Common Travel Area with no internal border controls. Ireland and UK may eventually associate with the Schengen area. The Schengen area includes countries outside of the EU.

The Schengen Agreement involves the full abolition of internal borders. National identity cards rather than passports suffice in air travel.

There is heightened cooperation in relation to immigration and asylum. A common Schengen area visa covers the whole Schengen area.

There is strengthened cooperation between police, immigration, and customs authority. There are common rules for asylum seekers. There is a Schengen information system allowing for the exchange of information between police, judicial and other national authorities.

The Treaty of Nice

The Treaty of Nice was signed in 2001 and became effective on 1st February 2003. Enhanced cooperation between some member states within the institutions of the EU was further facilitated. A group of member states may trigger an enhanced cooperation procedure in certain areas. Members need not cooperate.

Enhanced cooperation is only permissible as a last resort where the arrangements cannot be provided for under the existing Treaty. All member states should be eligible to participate in enhanced cooperation. Only member states which participate in the particular cooperation arrangements contribute towards the costs.

Treaty of Lisbon Overview

The Treaty of Lisbon grew out of the failed European Constitution. In 2001, the task of preparing a single, revised constitution for the European Union was conferred on a convention shared by former French President, Giscard d\’Estaing. It included representatives of governments, parliaments, candidate states, the European Union and other entities.

The draft European Constitution was rejected in referenda in France and the Netherlands and the treaty was abandoned. The constitution was seen as necessary or at least desirable in the context of the greatly increased membership of the European Union (going from 15 in 2004 to 27 in 2008).

The Lisbon Treaty was approved by the European Council in December 2007 in order to replace the constitutional treaty and make the provisions perceived necessary to accommodate the increased number of member states.

Because the Lisbon Treaty was considered to be an amending treaty, referendums were not considered necessary in any country other than Ireland. Ireland rejected the Lisbon Treaty in June 2008 and passed it in a second referendum in 2009.

The Lisbon Treaty reforms and amends the existing treaties. It largely follows the principles of the failed European Constitution. There are two treaties, the Treaty on European Union (TEU) and the Treaty on Functioning of the European Union (TFEU). They create the European Union as the single EU entity.

The treaties declare that the European Union is based on certain common principles of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human right. If a state breaches or threatens to breach these principles, the EU can take steps against the state concerned.

Treaty of Lisbon Charter of Fundamental Rights

The European Charter of Fundamental Rights became part of the treaties and is binding on the European institutions and the member states, in the context of EU law and practice. The Charter corresponds in many respects with European Convention on Human Rights. In some respects, it goes further than it.

The EU itself is to become a party to the European Convention on Human Rights, although the process is stalled at present. This would mean that or the first time, the European Court of Human Rights may scrutinize the laws and actions of the European institution. The European Court of Human Rights could in principle override the European Court of justice in respect of human rights matters if accession is completed.

Treaty of Lisbon EU Objectives

The EU\’s objectives are restated and updated. The overriding objectives of the EU are listed as the promotion of, peace EU values and the well being of its people.

The most important objective of the Lisbon Treaty was to make the provisions in relation to law making more streamlined in order to accommodate the enlarged membership.

The specific objectives include the creation of an area of freedom, security, and justice. The European institutions including the Court of Justice has power over matters covered by justice and home affairs cooperation. Countries may decide to join specific acts on a case-by-case basis. These areas are subject to the pooled sovereignty of the Community rather than the intergovernmental arrangement.

The establishment of the internal market is a specific objective. At this stage in its development, the emphasis is on the proper functioning of the market. It is required that the market should ensure sustainable development while not eroding the European social model and protecting the quality of the environment. The economic and monetary union is confirmed.

The treaties define the areas in which the EU has exclusive competence. They include

customs,
the monetary policy of the Eurozone,
common agricultural policy,
common fisheries policy,
certain international matters /agreements.

The areas of shared competences between the European Union and states are set out. Once the European Union legislates, it may occupy the field and member states may be longer competent to legislate.

Treaty of Lisbon Subsidiarity

The principle of subsidiarity is re-emphasised. Where areas do not fall under the exclusive competence of the EU, the EU should only act in so far as the objectives of the legislation cannot be sufficiently achieved by the state either at the central, regional or local level or because of the scale, the matter is better achieved at the European Union level.

The national parliaments are given an enhanced role. National parliaments must be given proposals for legislation. All consultation documents in respect of proposed legislation are to be circulated to the national parliament. National parliaments have eight weeks within receipt of the legislation or any amendment to give a reasoned opinion as to why they believe that the principle of subsidiarity is not complied with.

The may vote against the proposal. Each parliament has two votes. If there are two houses then each may have one vote. If at least one-third of the parliaments decide by vote that the principle of subsidiarity has not been complied with, the relevant act must be reviewed to decide whether to withdraw, amend or keep it. In the case of acts affecting freedom, justice, and security, the procedure is applicable if one-quarter of national parliaments disagree.

The Commission (or another initiating party) may maintain the proposal but must issue a reasoned opinion why it considers the proposal conforms with the principle of subsidiarity. The reasoned opinion together with the opinions on national parliament are forwarded to the EU parliament and Council. If the Council by a majority of 55 percent of its members or the European Parliament by a majority rejects the proposal, it is terminated.

There is a simplified provision for revision of the treaty. National parliaments also have a more formal role in revisions of the treaties. They may block an amendment under the revised treaties.

Treaty of Lisbon New EU Offices

The Lisbon Treaty provides for a High Representative for Foreign Affairs and Security Policy to coordinate and promote the foreign policy of the EU. The role is effectively that of the foreign minister of the EU. He or she is appointed by the Council acting by a qualified majority.

The holder of the post is a member of the Commission (Vice-president) and is responsible for external relations and certain aspects of the common foreign and security policy. The common foreign security policy is made unanimously.

There is a full-time President of the European Council. This replaces the previous arrangements under which the presidency of the Council rotated every six months.

The European Council is formalised under the Lisbon Treaty as a distinct body. It is made up of the heads of government (head of state in the case of France), the president of the Commission and the High Representative for Foreign Affairs. The Council allows for the heads of state or governments to be assisted by a minister and for the President of the Commission to be assisted by a Commissioner.

Legal Status of EU

With the entry into force of the Treaty of Lisbon, the EU acquired a legal personality. The EU is, therefore, a subject of international law which is capable of negotiating and concluding international agreements on its own behalf, i.e. it has competences (or powers) in this field conferred on it by the treaties.

These international agreements have legal effects in the internal law of the EU and of the EU countries. Moreover, the founding Treaties of the EU lay down the procedures by which the EU can conclude international agreements.

International agreements are the result of a consensus between the EU on the one hand and a non-EU country or third-party organisation on the other hand. These agreements create rights and obligations for both the EU institutions and EU countries. They become part of EU law on the date of their entry into force or on another specified date.

Legally, international agreements are secondary conventions and agreements and must therefore comply with the founding Treaties of the EU. However, they have greater value than ‘unilateral’ secondary acts, i.e. acts adopted unilaterally by the EU institutions (regulations, directives, decisions, etc.).

External competences of the EU

The external competences of the EU are defined in Article 216 of the Treaty on the Functioning of the EU (TFEU). The EU may conclude international agreements:

in the cases provided for by the founding treaties;
where provided for in a legally binding act;
where the conclusion of an agreement is necessary in order to achieve one of the objectives of the EU, even in the absence of internal EU legislation;
where the agreement may affect common rules adopted in internal EU law. This means that where the EU has adopted common rules for implementing a policy, EU countries may no longer enter into agreements with non-EU countries affecting those rules.

In addition, Article 207 of the TFEU governs the EU’s trade policy — a key external competence of the EU and a central element of its relations with the rest of the world.

Exclusive competence and shared competence

The distribution of competences between the EU and EU countries is also expressed at the international level. Where the EU negotiates and concludes an international agreement, it has either exclusive competence or competence which is shared with EU countries.

Where it has exclusive competence, the EU alone has the power to negotiate and conclude the agreement. Moreover, Article 3 of the Treaty on the Functioning of the EU specifies the areas in which the EU has exclusive competence to conclude international agreements, including trade agreements.

Where its competence is shared with EU countries, the agreement is concluded both by the EU and by the EU countries. It is, therefore, a mixed agreement to which EU countries must give their consent. The areas in which competences are shared are defined in Article 4 of the Treaty on the Functioning of the EU.