Introduction to the European integration process
Seminar series. Item code: EU101
- overview of European integration
- the basic structure of the European Union
- essentials of EU legislation
European integration is a process. It concerns the systematic harmonisation of rules between nation states. To forward this objective the states agree to a common set of primary laws and institutions.
The integration process was officially launched in the 1950s. In its first iteration it took the form of a regional cartel, officially known as the “European Coal and Steel Community”. Its purpose was to dismantle barriers to trade in those two industries between the member states.
A few years later, the cartel was replaced by the “European Economic Community”, the predecessor of the European Union. It had six founding members: France, West Germany, Italy, Belgium, the Netherlands, and Luxembourg.
The objective of the European Community was to establish a single market among its member states. A single market is an area where there are no internal impediments to trade. It does nonetheless feature a unified policy regarding trade restrictions to third countries. In other words, the single market is a regional trading block.
One of the main qualities of European integration is its “gradualism”. Every instance of progress or reform is realised over time. There are no radical or sudden shifts in European affairs. Everything proceeds in a stepwise fashion. Multifaceted negotiations take place until a compromise agreement can be reached. Gradualism is to be attributed to the very nature of the European Community as a coalition of nation states, each having its own interests and agenda.
The single market was conceived in the 1950s but took decades to materialise. Little by little European integration incorporated several elements that first established a free trade area and then the legal provisions that would make up the single market. The four freedoms were introduced: these concern the freedom of movement for goods, persons, capital, and services. There was a customs union meant to eliminate the discrepancies between tariffs and quotas among the member states. Gradually yet steadily, the integration process was delivering on its objective.
The European Economic Community was established on an international treaty: the Treaty of Rome, which introduced the supranational level of European affairs. By “supranational” we mean that the legal-institutional order is conceptually above the nation state. However, it also may imply a certain hierarchy: where there exists an explicit distribution of competences between the community and the member states, European law take precedence over any national law that may stand in conflict with it.
The whole idea of European integration was market-focused. There would be no trade restrictions within Europe, while the European Community would have a common trading stance towards the rest of the world. Though the end was rather explicit, it took decades to be realised. It never is easy to align the laws and national priorities of quite diverse states. In time, several key regulations were introduced, while some important court rulings were adopted that helped speed up things. Eventually new treaties were signed that iterated on the original legal corpus.
I like to divide the integration process in two broad phases. The first one starts in the 1950s and stretches to the 1990s. The second phase features the establishment of the European Union and extends to the present. The EU succeeded the European Economic Community in 1993. It was ushered in by the Treaty of Maastricht, which was signed in 1992.
The reason I draw this divide is that the second phase is much more ambitious than the first one. Originally integration was all about dismantling trade barriers. However, with the EU in place the intention was to eventually create a political union of sorts.
The instrument meant to bind together the European nations was the euro: the Union’s official currency. We should think of the euro as a tool for politics rather than a mere monetary unit. It is central to the European project. I would go so far as to suggest that it is the cornerstone of the EU.
Today we can all bear witness to the flaws of the euro and to the efforts made to address them. Yet but back in the 1990s the agreement on monetary integration constituted a major breakthrough.
The architects of the euro were excited about the prospects of their achievement. There would no longer be any race-to-the-bottom between European states. No euro area government could manipulate its currency to achieve a short-term competitive advantage over its trading partners. Seen from the perspective of overcoming trade impediments, this was excellent news. It meant that the reforms introduced by the European Economic Community would be cemented and expanded upon.
In this sense their enthusiasm was justifiable. A certain degree of integration is now taken for granted. Even amid the euro crisis no major political force argued forcefully for the introduction of national trade quotas and tariffs. Meanwhile, the last few years have seen a series of profound changes to the architecture of the euro; changes that greatly empower the supranational level.
There now exists a framework for economic governance—the skeleton of a fiscal union if you will. The European Central Bank now has so-called “prudential” powers over the financial sector, while the prospect of a European banking union is no longer a wild ambition. In short, the euro did eventually perform its intended role. With the benefit of hindsight, we may add that monetary integration has had the potential to greatly accelerate—and expand the scope of—the integration process.
To be clear, this is not to suggest that the euro is flawless. The contrary is true. It is however the case that the euro has acted a catalyst for deepening and broadening European integration. Traditional national powers that were once considered near-sacrosanct and outside the reach of European affairs were eventually pooled at the supranational level.
Only a few years back it was unthinkable for member states to closely coordinate their fiscal policies in the way they do today. Similarly, no one seriously entertained the notion of a unified system for the supervision of banks and other policies related to the financial sector. Today the power over those issues is shared between the European Union and its member states. In the medium term the EU will likely develop its own fiscal capacity, a “federal economic government” as it were. My understanding is that none of these would have been possible without the creation of the euro.
As is always the case with European integration, major changes to the legal order will need to be brought about by a new treaty. At least for the time being, there is no concrete evidence on anything of the sort, though there are several indications pointing to such an eventuality within the next five to ten years. What we can be almost certain of, is that any new treaty will make incremental changes to the existing legal-institutional order. Do not expect anything revolutionary. This is, after all, the essence of gradualism.
Now that we have offered an overview of the integration process, let us spend a few minutes discussing the main players in EU affairs: the European institutions. Just like any modern polity, the European Union is governed by the principle of the division of powers.
The judiciary is the Court of Justice of the EU. It is the supreme court and works exactly as one would expect.
The legislative is comprised of two institutions: the European Parliament and the Council of the EU. The former represents the citizens of the Union. The latter the national governments. The fact that there are two entities making laws should not come as an oddity. It is standard practice in many polities, such as federations with parliaments that consist of two separate chambers. For instance, in the United States of America, the Congress is made up of the House of Representatives and the Senate.
Where it get a little bit tricky is on the EU executive. Technically, the institution that performs this function is the European Commission. It is the “government” of the EU, so to speak. However and unlike any legitimate government, the Commission does not receive its mandate from the European citizens but from another EU institution: the European Council. The European Council is where the heads of state or government of the member states meet to take key decisions on the future of the EU. Given this relationship, I like to suggest a certain qualification: we will consider the Commission to be the Union’s implementing executive, and treat the European Council as the deciding executive. That way we denote each institution’s exact role.
Laws in the EU are typically produced using the so-called “ordinary legislative procedure”. The Commission will put forward a proposal for draft legislation. This document is sent to both the European Parliament and the Council of the EU. Each institution then follows its own internal procedures for working on the text. Once each of the co-legislative institutions amends the proposal and reaches a final text, they have to come together to compare their results. The Parliament and the Council must ultimately agree on a common text. Once their texts are merged and the final document is promulgated it becomes law of the Union.
For our purposes, we will note that the EU has two kinds of legal instruments: regulations and directives. The first introduces a uniform set of provisions that has to be implemented as-is. The second allows member states a certain degree of flexibility on how to transpose the law in their national legislation.
The only way to repeal European laws is to relaunch the ordinary legislative procedure. Understandably, this is no simple task. If it is to happen, it typically encompasses an array of reforms that were agreed upon in outline form by the EU’s deciding executive. This was the case only a few years ago, when the euro architecture was being revised. Given current events, it will most likely be true for the policies that concern migration and asylum.
To conclude this seminar, we should remind ourselves of the phrase “European integration process”. Our focus should be on its last word. By that I mean that the EU is not finished. True to the spirit of gradualism, the Union remains “under construction”.
The implication is that we need to think about the bigger picture when considering whatever design flaw may exist in the EU architecture. Whenever a crisis hits many perceive of the EU’s slowness as a sign of its impending doom. This shows that those critics have not considered the broader context in which events unfold. They have not accounted for the specifics of European integration.