Maastricht and Beyond

Building a European Union

Andrew Duff, John Pinder, Roy Pryce, Andrew Duff, John Pinder, Roy Pryce

• Editorial: Routledge
• Año: 2002
• ISBN:
  9781134840458
• Edición: 1
• Categoría: Política y relaciones internacionales
• Categoría: Política

Maastricht and Beyond is a critical assessment of the European Union brought into being by the Treaty of Maastricht. A team of experts provide a clear and thorough appraisal of the main provisions of the Treaty - including the three pillared structure of Economic and Monetary Union, common foreign and security policy and home affairs and justice - showing how these elements will change the function and eventually the character of the European Union. The book draws conclusions from the Maastricht process for the next reform of the Union in 1996, and it examines the practicalities of achieving a fully-fledged federal democracy, making proposals for a constitutional settlement.
Maastricht and Beyond will appeal to both informed generalists and to students and scholars who want a fresh approach to the stale arguments over Maastricht, who seek enlightenment over what the Treaty is for and who have the curiosity to look forward to 1996 and beyond.

Part I
THE TREATY OF MAASTRICHT

2
THE MAIN REFORMS

Andrew Duff

The Maastricht Treaty created a new European Union, based on the European Community, which ‘marks a new stage’ in the process of creating an ever closer union among the peoples of Europe.¹ Much of the Treaty followed well-tried precedent, building on past EC treaties and on the corpus of law and policy made by the common institutions over forty years. Other provisions of Maastricht are intended to respond to new external challenges of the Community, including enlargement. Some of the Maastricht Treaty was truly innovatory—not least with regard to its own structure.

Against the wishes of the Commission and the Dutch presidency of the Council, the Maastricht Treaty divides into three ‘pillars’. The first (Titles II, III and IV) amends the EEC, ECSC and Euratom Treaties (as revised most recently by the Single Act), formally naming them the European Community. The second pillar (Title V) concerns foreign and security policy and is built upon the existing intergovernmental procedures of European Political Cooperation. The third (Title VI) covers justice and home affairs. The first and last sections of the Treaty (Titles I and VII) comprise a Preamble and Final Provisions and seek to bind the three pillars together into the European Union.²

THE NATURE OF THE UNION

The ‘European Union’ of Maastricht embraces the three pillars and manages relations between them. But the true nature of the relationship between the Community method and intergovernmental practices will be defined as much in practice as in theory. The three-pillar structure is indubitably complicated, and would be difficult to explain to anyone coming fresh to a study of European unification—with such explanation made more tricky by the competing interpretations subsequently put upon the Treaty by many of the leading players. The UK government has made much of the separateness of the three pillars; others have accentuated their interconnectedness. The British Prime Minister is not only proud of his achievement at Maastricht in stopping the establishment of a single federal structure, he sees it as a blueprint for the future development of the Community. He told the Commons:

At Maastricht we developed a new way, and one much more amenable to the institutions of this country—cooperation by agreement between governments, but not under the Treaty of Rome. It covers interior and justice matters, foreign affairs and security, and the option is available for it to cover wider matters in the future.³

Another Byzantine dispute left unresolved by Maastricht is the use and definition of the term ‘federal’. The British fought successfully to have it left out—the ‘ever closer union’ of the Treaty of Rome survives instead. But that John Major accepted many federalist elements of the Treaty (such as subsidiarity), and even argued for the inclusion of others (such as the power of the European Court of Justice to fine member governments in breach of EC law) makes his struggle against ‘federal’ an historical curiosity.

The precise nature of the Union, therefore, remains unclear. The ambitious language of the Treaty, at times almost rhetorical, suggests aspirations on a grand scale. The objectives are large, and the competences of the Union wide. The Treaty is long, and when consolidated with the existing EC Treaties, runs to hundreds of pages. But Maastricht obviously does not represent the definitive version of European unity. The British government’s interpretation of Maastricht as vindication of the intergovernmental approach appears to be sincerely held. But it is not a view that seems to be shared elsewhere in the Community. Beyond Maastricht, at least, the battle lines are clearly drawn.

ECONOMIC AND MONETARY UNION

The Treaty’s main achievement was to lay down the objective of Economic and Monetary Union along with a timetable and schedule for its achievement.⁴ According to Article 2, the purpose of Emu is to ‘promote throughout the Community a harmonious and balanced development of economic activities, sustainable and non-inflationary growth respecting the environment, a high degree of convergence of economic performance, a high level of employment and social protection, the raising of the standard of living and quality of life, and economic and social cohesion and solidarity among Member States’. In setting these objectives, of course, the European Community was mostly revisiting familiar territory. But the goal of currency union had never before been established precisely in treaty form. Nor had the EC been capable previously of prescribing in detail the ways and means of reaching that goal. What was agreed and why?

The Treaty gives the Community exclusive authority over money. It pools the monetary sovereignty of the member states, and supersedes any independent activity by them in that field. It ascribes the management of the Emu to a new supranational institution, the European Central Bank to be set up in either 1997 or 1999 at the latest. It established a precursor of that institution, the European Monetary Institute, when the transition from the first to the second stage took place on 1 January 1994. In Stage One of Emu, which formally began on 1 July 1990, limited monetary functions and the technical preparations for the Monetary Institute were carried out by the (refurbished) Committee of Central Bank Governors that has existed since 1964.

The Treaty prescribes a single currency for the whole of the EC: the Ecu (or as German sensibilities insisted, the non-French Ecu, ‘European Currency Unit’). The European Central Bank sits at the pinnacle of and has duties to coordinate a European System of Central Banks, comprising the central banks of the member states. In the Intergovernmental Conference (IGC) leading up to Maastricht, the UK had won no support for its proposal that a coordinated central bank system would be sufficient to manage a European Monetary Fund that would issue a ‘hard’ Ecu, that is, a parallel, common or twelfth EC currency.⁵

The Treaty establishes that progress towards Emu is to be orderly: the question at once arises of how determined it is also intended to be. The existing arrangements of the Exchange Rate Mechanism within the European Monetary System are left in place throughout Stages One and Two of Emu. This crucial decision means that independent currencies, although technically and politically tied to each other, are still competitive and markets will continue to speculate in EC currencies throughout the transitional phases. The delay in setting up the European Central Bank until Stage Three, made at German insistence with the tacit support of the UK against the wishes of France and Italy, meant that the ERM would become increasingly exposed as the moment of truth, the irrevocable fixing of currencies, drew closer. At the time of writing the authority of the European Monetary Institute has still to be determined, and its credibility tested. But uncertainty over the ratification of the Treaty had already, before the beginning of Stage Two, caused great instability and there must be doubt that the earlier date of 1997 remains a realistic target for decisions about currency union—at least according to the conditions of the Maastricht accord.

To make matters worse, there is continuing disagreement about the criteria by which to judge when the transition is to take place and who is to be involved. In the Treaty, the Germans won their battle for seemingly tough criteria. The provisions lay down that currencies participating in Stage Three must have enjoyed a stable relationship within the ERM for two years. Long-term interest rates must not be above 2 per cent of the average of the three member states with lowest inflation, and inflation rates shall not be more than 1.5 per cent above their average. Member states’ budget deficits should not exceed 3 per cent of GDP, and their public debt ratio should not exceed 60 per cent of GDP—unless excesses are exceptional, temporary and diminishing.

In one sense, the resolution of the argument over the ‘convergence criteria’ has been put off by the decision to make the European Council, voting by qualified majority, responsible for choosing which countries shall participate in the currency union. Those that do not will be dubbed ‘Member States with a derogation’, and will be granted subsequent opportunities every two years to come on board. The process of discrimination has been eased, possibly, by the UK which exacted a protocol to the Treaty allowing the Westminster Parliament to exercise its own discretion about sterling’s participation in Stage Three. In practice, no doubt, this dispensation makes little difference to the political context in which Britain and the EC will eventually decide to go forward to monetary union: no UK government could defy the House of Commons on such a matter, and some member states, including Denmark, will even hold a referendum on the issue. But the UK Protocol served further to reduce the credibility of the carefully contrived Emu clauses of Maastricht. Worse, it set an unfortunate precedent. In the course of ratification, the Bundestag decided to adopt unilaterally a similar provision. And the Danes, following their referendum debacle of June 1992, extracted from the European Council at Edinburgh a declaration that Denmark would not participate in the currency union.⁶

Furthermore, the ERM under pressure relies upon the active support of the stronger for the weaker currencies. When in the course of 1992 the full cost of German unification became apparent, the commitment of the Bundesbank to European monetary integration fell under suspicion. German participation in the currency union has taken on Augustinian qualities of virtue postponed. In August 1993 the narrow band of 2.25 per cent was widened to 15 per cent, compromising one of the important Maastricht convergence criteria that requires observance of the ‘normal’ fluctuation margins of the ERM without devaluation for at least two years. Moreover, the fiscal criteria have looked increasingly controversial as economic recession has deepened.

Nevertheless, despite the lack of urgency implicit in the phased timetable, the decision of the IGC to go irreversibly for a single currency and Central Bank was certainly historic.⁷ The maintenance of future price stability has been made a keystone of integration. The Treaty determines that neither the EC itself nor its member governments will be able to finance their public deficits by printing money. The ECB cannot extend credit to government at any level—supranational, national or subnational. The constitutional protection of the European Central Bank from political interference is asserted forcefully in the Treaty. The Bank can make regulations about EC monetary policy, hold the reserves of member states, and make recommendations to the Council of Economic and Finance Ministers (Ecofin) about the Ecu’s international rate. The directors of the Central Bank will be appointed by Ecofin after consulting the Parliament, and will serve for eight years. The President of the Bank will report regularly to the other institutions. The arrangements for the management of the single currency are in a way the best formed of all the parts of this Treaty. And whatever the fate of the Emu project of Maastricht, it is difficult to foresee circumstances in which the Community could continue to develop without a reaffirmation of the need for a single currency run according to these or similar arrangements by a central bank.

Given EC control of the customs union, common trade policy, single market and single currency, it is an important element of Emu that the political management of the economy—in other words, fiscal policy—will be shared but well coordinated between the EC institutions and member governments. Emu means the ‘adoption of an economic policy which is based on the close coordination of Member States’ economic policies’ within the Council;⁸ ‘Member States shall regard their economic policies as a matter of common concern’;⁹ member states and the Community shall comply with the guiding principles of stable prices, sound public finances and sustainable balance of payments. The Commission is charged with the duty to monitor the budgetary position of each member state. This surveillance can lead to strictures being made by the Commission and Council about the economic policies and performance of a member government, leading in extreme circumstances to the imposition of a fine. In Stage Three a new Economic and Financial Committee, replacing the Monetary Committee, will be set up and composed of representatives of the European Central Bank, Commission and member governments to oversee and report to Ecofin on capital movements. Clearly Ecofin will become very much more busy and important. The new Central Bank has a vital technocratic role. But the success of the Emu enterprise may rest ultimately on the ability of the Council to arrive at macroeconomic policies that are cogent and convergent.

COMMON FOREIGN AND SECURITY POLICY

The Maastricht Treaty seeks to respect the acquis communautaire in its design of a common policy in the fields of internal and external security. But it proposes that the Union’s foreign affairs be formulated and managed in a qualitatively different way from its domestic ones, not least in that they are purported to be beyond the jurisdiction of the Court of Justice. As we have noted, this tripod arrangement of pillars, presided over graciously by the European Council, is hailed by UK ministers as a triumph of Anglo-Saxon pragmatism over federalist militancy. Nevertheless, an element of scepticism is in order.

The Common Foreign and Security Policy (CFSP) provisions of the Maastricht Treaty build on the years of experience of the European Political Cooperation (EPC) procedure.¹⁰ Although ministerial decisions will now be taken by the Council, CFSP remains intergovernmental in character and the jurisdiction of the Court of Justice does not extend to it. Nevertheless, under Article M of the Treaty neither CFSP nor its intergovernmental twin pillar of Justice and Home Affairs (Title VI) can impede the operation of the Community, and the Court of Justice is empowered to rule on any infringement of that Article. The Council and the Commission are instructed to ensure consistency between CFSP and the external political and economic relations of the Community, which remain both intact and the responsibility of the EC institutions.

The CFSP pursues its objectives through ‘common positions’ and joint actions’. Common positions correspond to the current practice of EPC. Joint actions are worked out according to a complicated procedure. On the basis of guidelines from the European Council, the Council decides by unanimity that a matter should be the subject of joint action. The Council also decides those items which can be covered by qualified majority. The majority required is the same as that provided by the EEC Treaty for qualified majorities when there is no proposal from the Commission: that is to say, a majority of at least fifty-four votes (out of a possible seventy-six) in favour cast by at least eight countries. The Council is served by a political committee.

CFSP shall include ‘all questions related to the security of the Union, including the eventual framing of a common defence policy, which might in time lead to a common defence’.¹¹ Joint actions, however, are not foreseen at this stage in the defence field. In an important departure, Western European Union (WEU) is charged with the elaboration and implementation of decisions and actions having defence implications. This is the case even though Denmark and Ireland are only observer members of WEU. The WEU arrangement is to be reviewed in 1996.

The presidency of the Council will represent the Union on CFSP matters and in international organisations and conferences. This is something of a setback for the Commission, which had hoped to extend its previously dominant representation of the EC on external economic matters. It also impends danger: the Greek government’s representation of the Union in the UN peace conference on the Balkans has not been to everyone’s taste. However, the Commission wins the important power to make proposals to the Council on CFSP matters alongside member states. EU members of the UN Security Council are to concert and keep fully informed other member states. As permanent members of the Security Council, France and the UK undertake to ensure the defence of the positions and interests of the Union.

JUSTICE AND HOME AFFAIRS

Over the years, the Twelve have invented many examples of ad hoc machinery covering a wide range of interior affairs such as police and customs cooperation, asylum, extradition, deportation, visa policy and, most controversially of all, immigration. The establishment of the single market, with its requirements for freedom of movement of persons, has enlarged the interface of this intergovernmental activity with that of the EC itself, and the Commission has gradually become more involved in the process. The signature of the Schengen Agreement between the core member states of the Community is intended to create a virtual frontierfree zone: an ambition set for the whole EC by Article 8a of the Single Act, but as yet impeded by certain member governments which insist on keeping national barriers for political and technical reasons concerning crime control.

The Maastricht Treaty attempts to impose some order on this patchwork of diplomacy, and associates it more closely with the EC itself. The relevant articles of the Treaty, Title VI, comprise the third ‘pillar’ of the European Union.¹² The procedural arrangements are comparable to those for CFSP, and, similarly, administrative costs fall to the EC budget. The Council of ministers is to run things. A new body, the ‘K4 Committee’, is set up to coordinate the different intergovernmental activities. The Commission’s position in these matters is enhanced, however, and it is to enjoy on this committee a limited and non-exclusive right of policy initiation. The European Parliament has only a marginal role. And (for the anti-federalists just as important) the Court of Justice continues to be largely exc...

Índice

• Cover Page
• Half Title Page
• Series Page
• Title Page
• Copyright Page
• Contents
• List of Contributors
• Foreword
• Acknowledgements
• List of Abbreviations
• Introduction
• 1 The Maastricht Treaty and the New Europe
• Part I The Treaty of Maastricht
• 2 The Main Reforms
• 3 The Treaty Negotiations
• 4 Ratification
• Part II Policies and Powers of the Union
• 5 Fiscal and Monetary Policy in Economic and Monetary Union
• 6 Common Foreign and Security Policy
• 7 European Citizenship and Cooperation in Justice and Home Affairs
• 8 Old Policies and New Competences
• 9 The Public Finances of the Union
• Part III The Government of the Union
• 10 Problems of Governance in the Union
• 11 The European Commission
• 12 Representing the States
• 13 Representing the People
• 14 European Union and the Rule of law
• Conclusion
• 15 Building the Union Policy, Reform, Constitution
• Notes
• Index