INSTITUTIONS AND GOVERNANCE OF
THE EUROPEAN UNION
Prof. Dr. Florian Trauner
Academic Year: 2020-2021
, CLASS 1: INTRODUCTION
• Theoretical and practical approaches
• Understand how EU makes decisions
• Understand the academic state-of-the-art of European issues
ASSESSMENT
Oral presentation or short, written paper (25%)
Exam: understanding of the classes
- Discussions, readings of the classes
- No additional material
- Understand what is going on in European integration process
Come well-prepared, do the mandatory readings
Mandatory readings: prepare 2 questions, points of discussion before every class
Today: reflecting, revising some facts, figures of the European integration process
THE EU TREATIES
Plan of big bank political integration
- Political military union from the beginning
Small integration
- Presented by Jean Monnet
o If we work together economically, we can’t make war
o His idea was that if we cannot agree on highly sensitive topics, why not start with
some economic, non-salient topics, which will have positive spill-over effects
1952: EUROPEAN COAL AND STEEL COMMUNITY (ECSC) (TREATY OF PARIS)
à Robert Schuman & Jean Monnet
- Schuman plan: proposed that France and Germany should place their coal and steel sectors
under the control of a supranational authority (the ECSC)
- Monnet: ‘father of European integration’
o Behind the idea of ECSC
Coal and steel were crucial to a nation’s military and industrial strength
à Joining ECSC was huge transfer of power from the national level to the supranational level
2
,Goal: rendering future wars between France and Germany materially impossible (always keep this at
the back of your mind!!)
High Authority of the ECSC: executive branch and forerunner of the European Commission
- This was the very beginning of the integration process of the EU
It integrated some very important, non-sensitive sectors like the economy
1957-1958: TWO TREATIES OF ROME
The 1st created Euratom
The 2nd created the EEC à what we’ll focus on here
- Founding stone of European economic integration and the Common Market
- 6 founding members
à The term “Treaty of Rome” is used to refer to the treaty that established the EEC
- 1965: ECSC, EEC and Euratom were merged into European Communities (EC)
- Extraordinarily deep economic integration
o Customs union
§ Removing all tariffs and quotas on intra-EEC trade
§ Adopting a common tariff on imports from non-MS
o Free mobility of workers
o Capital market integration
o Free trade in services
o Set up series of supranational institutions
§ European Parliamentary Assembly (forerunner of European Parliament)
§ European Court of Justice
§ European Commission
à Laid out virtually every aspect of economic integration that EU implemented up until the 1992
Maastricht Treaty
Intention: create a unified economic area, which would draw Europeans into ever-closer, ever-deeper
economic exchanges that would lead Europeans to embrace ever-closer political cooperation and
integration
Eventually EU entered a more troubling period in the 1970s
- Oil crises, oil shocks
- High dependence on oil-producing nations
- EU losing competitiveness compared to US and Japan
1987: SINGLE EUROPEAN ACT (SEA)
Jacques Delors à Single Market Programme
- Ruled out all remaining restrictions on capital movements among EU residents by 1988
3
, o Unintended consequence of pushing EU towards single currency
§ Without capital controls, nations must choose between controlling their
exchange rate and controlling their monetary policy
® MS chose to sacrifice national control over monetary policy in order to
keep exchange rates stabilized (exchange rate stability is crucial)
This treaty was the biggest leap forward in economic and political integration since the Treaty of
Rome
Its key changes were designed to reinforce the ‘four freedoms’ (free movement of goods, services,
people and capital) promised by the Treaty of Rome
- Further liberalization of trade in goods by streamlining or eliminating border formalities
- Harmonization of VAT rates within wide bands to reduce the incentive for cross-border VAT
fraud
- Liberalization of government procurement à level playing field for firms
- Harmonization and mutual recognition of technical standards in production, packaging and
marketing à reduce need to check goods as they crossed intra-EU borders
- Removal of all capital controls and increase in capital market integration
SEA also implemented important institutional changes
- Key: move away from unanimity principle and towards majority voting as envisaged in Treaty
of Rome
o Decisions concerning Single Market issues would be adopted on the basis of majority
voting instead of on a basis of unanimity
1993: MAASTRICHT TREATY (TREATY ON EUROPEAN UNION)
à Founder treaty
- Unite external action because of the single market
o Economic rationale, the next step would be political integration
Context: implosion of communism
- Europe was confronted with completely different geopolitical environment
- Violence and ethnic conflict in former Yugoslavia
- Move towards a more political union
- Pillar structure
- Internet security and foreign policy entered the European competences
Lot of optimism
- 1991: Luxemburg had presidency of EU
o “This is the hour of Europe”
à Most profound deepening of European integration since Treaty of Rome (more than SEA)
- Committing MS to a transfer of national sovereignty over monetary power to a supranational
body: the European Central Bank
4
THE EUROPEAN UNION
Prof. Dr. Florian Trauner
Academic Year: 2020-2021
, CLASS 1: INTRODUCTION
• Theoretical and practical approaches
• Understand how EU makes decisions
• Understand the academic state-of-the-art of European issues
ASSESSMENT
Oral presentation or short, written paper (25%)
Exam: understanding of the classes
- Discussions, readings of the classes
- No additional material
- Understand what is going on in European integration process
Come well-prepared, do the mandatory readings
Mandatory readings: prepare 2 questions, points of discussion before every class
Today: reflecting, revising some facts, figures of the European integration process
THE EU TREATIES
Plan of big bank political integration
- Political military union from the beginning
Small integration
- Presented by Jean Monnet
o If we work together economically, we can’t make war
o His idea was that if we cannot agree on highly sensitive topics, why not start with
some economic, non-salient topics, which will have positive spill-over effects
1952: EUROPEAN COAL AND STEEL COMMUNITY (ECSC) (TREATY OF PARIS)
à Robert Schuman & Jean Monnet
- Schuman plan: proposed that France and Germany should place their coal and steel sectors
under the control of a supranational authority (the ECSC)
- Monnet: ‘father of European integration’
o Behind the idea of ECSC
Coal and steel were crucial to a nation’s military and industrial strength
à Joining ECSC was huge transfer of power from the national level to the supranational level
2
,Goal: rendering future wars between France and Germany materially impossible (always keep this at
the back of your mind!!)
High Authority of the ECSC: executive branch and forerunner of the European Commission
- This was the very beginning of the integration process of the EU
It integrated some very important, non-sensitive sectors like the economy
1957-1958: TWO TREATIES OF ROME
The 1st created Euratom
The 2nd created the EEC à what we’ll focus on here
- Founding stone of European economic integration and the Common Market
- 6 founding members
à The term “Treaty of Rome” is used to refer to the treaty that established the EEC
- 1965: ECSC, EEC and Euratom were merged into European Communities (EC)
- Extraordinarily deep economic integration
o Customs union
§ Removing all tariffs and quotas on intra-EEC trade
§ Adopting a common tariff on imports from non-MS
o Free mobility of workers
o Capital market integration
o Free trade in services
o Set up series of supranational institutions
§ European Parliamentary Assembly (forerunner of European Parliament)
§ European Court of Justice
§ European Commission
à Laid out virtually every aspect of economic integration that EU implemented up until the 1992
Maastricht Treaty
Intention: create a unified economic area, which would draw Europeans into ever-closer, ever-deeper
economic exchanges that would lead Europeans to embrace ever-closer political cooperation and
integration
Eventually EU entered a more troubling period in the 1970s
- Oil crises, oil shocks
- High dependence on oil-producing nations
- EU losing competitiveness compared to US and Japan
1987: SINGLE EUROPEAN ACT (SEA)
Jacques Delors à Single Market Programme
- Ruled out all remaining restrictions on capital movements among EU residents by 1988
3
, o Unintended consequence of pushing EU towards single currency
§ Without capital controls, nations must choose between controlling their
exchange rate and controlling their monetary policy
® MS chose to sacrifice national control over monetary policy in order to
keep exchange rates stabilized (exchange rate stability is crucial)
This treaty was the biggest leap forward in economic and political integration since the Treaty of
Rome
Its key changes were designed to reinforce the ‘four freedoms’ (free movement of goods, services,
people and capital) promised by the Treaty of Rome
- Further liberalization of trade in goods by streamlining or eliminating border formalities
- Harmonization of VAT rates within wide bands to reduce the incentive for cross-border VAT
fraud
- Liberalization of government procurement à level playing field for firms
- Harmonization and mutual recognition of technical standards in production, packaging and
marketing à reduce need to check goods as they crossed intra-EU borders
- Removal of all capital controls and increase in capital market integration
SEA also implemented important institutional changes
- Key: move away from unanimity principle and towards majority voting as envisaged in Treaty
of Rome
o Decisions concerning Single Market issues would be adopted on the basis of majority
voting instead of on a basis of unanimity
1993: MAASTRICHT TREATY (TREATY ON EUROPEAN UNION)
à Founder treaty
- Unite external action because of the single market
o Economic rationale, the next step would be political integration
Context: implosion of communism
- Europe was confronted with completely different geopolitical environment
- Violence and ethnic conflict in former Yugoslavia
- Move towards a more political union
- Pillar structure
- Internet security and foreign policy entered the European competences
Lot of optimism
- 1991: Luxemburg had presidency of EU
o “This is the hour of Europe”
à Most profound deepening of European integration since Treaty of Rome (more than SEA)
- Committing MS to a transfer of national sovereignty over monetary power to a supranational
body: the European Central Bank
4
