History and Theory of European
Integration
Marina V. Larionova
JEAN MONNET European Module
Lecture 5
A decade of Enlargements
(1969-1979)
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Contents:
• The Hague, relaunch of European Integration
• Accession negotiations with Britain, Denmark, Ireland and
Norway and accession of the UK, Denmark, Ireland
• Werner plan for the Economic and Monetary Union (1970),
launch of the monetary snake (1972) and plan for the European
Monetary system and European Monetary mechanism (1978)
JEAN MONNET European Module
Recommended Readings
• Dinan Desmond (1999) Ever Closer Union. An Introduction to
European Integration. Second edition. The European Union
Series. Palgrave. Chapter 3.
• Robert Skidelsky “The Choice for Europe”. 1970. ProEuropean Reader. 2002. Palgrave
• Helmut Schmidt “We Need the British”.1974. Pro-European
Reader. 2002. Palgrave
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The Dark ages of the 70s – Community in a Time of Flux
• Community ineffective response to the oil crisis
• Decision - making gridlocks in the Council
• Eurosclerosis
The Hague spirit
December 1969 summit of states
new political dynamics and tensions
Agreement on the basis of
Identity of aspirations? Or Convergence of interests
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Liberal intergovernmentalism fundamentals
1.
2.
3.
4.
5.
States are the major actors (“unitary actors”)
Foreign policy goals shift in response to changing pressures from
domestic interest groups
State preferences are neither fixed nor uniform
Governments relative bargaining power is the result of asymmetric
distribution of information and benefits of a specific agreement
International institutions are designed and established to overcome
first order (achieving coordination) and second order problems
(control over observing rules for distribution of gains):
 Institutions design reflect the functions and specific
problems of the cooperation;
 Institutions reduce the costs for achieving the outcomes
and controlling the behavior of states.
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Object of study
• Actors
• Actors’ preferences and sources of their change
• Institutional design
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Actors
“EU can be best understood as a series of rational choices made
by national leaders. These choices responded to constraints and
opportunities stemming from
 economic interests of powerful domestic constituents,
 the relative power of each state in the international system, and
 the role of institutions in bolstering the credibility of interstate
commitments”
(Moravcsik A. (1998) The Choice for Europe: Social Purpose and State
Power from Messina to Maastricht. Cornell University press)
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Preferences are issue specific
• “Domestic preferences reflecting the competitiveness of national
economy act as a filter between the structural incentives of
international economy and the national preferences”
(Schimmelfennig F. Liberal Intergovernmentalism (2004) in
European Integration Theory. Wiener A. and Diez Th. (eds).
Oxford)
• ideological geopolitical preferences can influence national
preferences
• international interdependence can serve as a catalyst of societal
demand for integration
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Integration
Integration - a means to secure commercial advantage
through intergovernmental bargaining on distribution of
gains
Three assumptions about integration process
• First order problems do not exist
• Second order problems dominate
• Supranational entrepreneurship is not necessary
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Institutional design
• driven by governments to overcome high transaction costs and
information assymetrics
• supranational institutions assigned a role in the second order
issues
• the degree of pooling of sovereignty or delegating to
supranational institutions dependant on the value placed on the
outcome
• delegation to supranational institutions acts as a safeguard
against short term preferences of the governments
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The intergovernmental approach
limitations
1. biased case selection (EC, IGC, Treaty
amendments)
2. problem of separating the substantive bargaining
and institutional choice
3. neglect of integration dynamics (ECJ)
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France
Georges Pompidou’s objectives and challenges
De Gaulle’s heritage
 Retaining France’s influence and credibility in the EU
 Overcoming persistent economic and monetary problems
 Enhancing France’s international standing
 Counterbalancing Germany’s growing economic power
and political assertiveness
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Germany
Willy Brandt’ s objectives and challenges
 Asserting Germany’s international position
 Normalizing Germany’s relations within the East
Ostpolitik
 Overcoming domestic opposition of Christian democrats
to the Ostpolitic
 Appeasing the member states’ fears of Germany’s
resurgence
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Britain
• Harold Wilson challenges
EU entry
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The Hague spirit - “Completion, deepening,
enlargement”
• Completion – finalizing the regulations for funding the CAP
• Deepening – extending the EC competencies beyond existing
policies to include:
 A system of foreign policy cooperation (Etienne
Davignon report)
 Coordination of member states’ monetary policies to
secure farm prices from parity fluctuations (Pierre
Werner report on the EMU)
• Enlargement – launch of negotiations conditional to the
enforcement of the new financing system for CAP
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Compromise
The five commitment to
resolve the regulations
for funding the CAP by
the end of the year
French consent for
enlargement negotiations
to begin by June 1970
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Outcomes: Completion
• A new funding system for the CAP:
+ positive + EC own resource (amendment to the Treaty of Rome
agreed by the foreign ministers subject to member states
ratification)
+Levies on agricultural products
+ duties on imported industrial goods
+ up to 1 per cent of VAT revenue
- negative - the mechanism of the agreement disadvantages member
states importing on a big scale from outside of the EU
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Outcomes: Deepening
• Davignon’s report (May 1970 / October 1970)
– European Political Cooperation
• Brandt agenda for EPC
– Europe wide support for his Ostpolitik policy
• Werner’ s plan for EMU – the blueprint for achieving the
Economic and Monetary Union
Increased coordination of domestic economic policies at
European level to promote convergence
Institutional reform
Fixing of exchange rates and adoption of a single currency
by 1980
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Outcomes: Deepening
• March 1971 Ecofin Council Resolution on attaining the EMU
• Member states commitment on the exchange rate fluctuation
margin within 1,2 percent band
• Snake proved unworkable due to dollar instability in 1971
• Relaunch of the ‘snake in the tunnel” in 1972 – 2,25 band
• The UK, Ireland, Denmark and Italy withdrawal from the
system in 1973 in the wake of the oil crisis and economic
recession
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Outcomes: Enlargement
June 1970 – accession negotiations with Britain, Ireland,
Denmark and Norway begin in Luxembourg
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Positions: The UK
• Edward Heath approach “to gain entry, then sort out any
differences”
• Edward Heath’ conservative party skepticism
• Harold Wilson’ opposition in the Labor
• Pompidou welcome of the British traditional Euroskepticism
• Heath’s and Pompidou’ accord – French - British axis?
• Labor denunciation of Heath’s entry terms despite George
Thomson’s claim that they would have been accepted by the
Labor governement
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within the UK
The grass roots of “the strength of opposition to European
commitment which has existed, and continues to exist, at all
levels of British society”:
fear of being boxed into the Continental system
fear of sovereignty cession
concern on abandonment of its unique position of being
both independent and universal, committed to none and
having a hand in the shaping of all
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Causes of ambivalence
The British response to the growth of European movement
was …schizophrenic
• Welcome of the steps to overcome age-old European
rivalries
• Reflecting that the divide and rule policy was at stake,
Britain will not be able to hold the balance of power in
Western Europe
• Awareness that the new European power can undermine
the UK influence in the world
Robert Skidelsky “The Choice for Europe”
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Hence:
The British policy
of selective sabotage and finally decision to stop the thrust of
unity from inside –America’s Trojan Horse in Europe
Political argument for
“Britain has always been a European power. Today European
powers are coming together in political union. Britain can no
longer stop it. To stand outside would be to cut itself off for the
first time from the Continent of which it has always been a part.
This would be a betrayal of England’s past and the real guarantee
that it would have no future.”
Robert Skidelsky “The Choice for Europe”
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A series of referendums
France - April 1972 – to split the Communist –
Socialist opposition – 61 % vote for
Ireland – May 1972 – 83 % vote for
Norway – September 1972 – 53,5 % vote against
Denmark – September 1972 – 63 % vote in favor
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The UK
Parliamentary approval in October 1972
Five days debate in the Parliament culminating in the
vote taken on October 28
Labor dissidents performing “the divine duty of
making a judgment and then courageously
applying the judgment” by voting for Europe (69
+ 20 abstaining)
Roy Hattersley “Voting for Europe”
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“A Historic Decision” Speech to the House of
Commons by Edward Heath
Economic and political arguments
• Change in the international trade relations:
 US increasing economic connections with the new powers –
China, SU, EEC
 Commonwealth developing into a loose association of
independent countries
• Economic and social benefits of the common market
• Resilience of the Community and its effective mechanisms
of dealing with the problems arising
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Economic and political arguments cont.
• “Making a commitment which involves our sovereignty, we are
also gaining an opportunity. We are making a commitment to the
Community as it exists tonight, if the House so decides, but we
are gaining the opportunity to influence the decisions of the
future.”
• “Being a member of the community would be an effective use of
our contribution of sovereignty”.
• Britain, which will be united to Europe economically, will be
able to influence decisions affecting her future and enjoy
better standard of life.
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The EC of the Nine in 1973
Britain, Ireland, Denmark join the EC
“The member states of the Community, the driving force of
European construction, affirm their intention before the end of
the present decade to transform the whole complex of their
relations into a European Union.”
October 19-20, 1972, Paris summit concluding statement
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External and domestic pressures,
diversity of national agendas and Euroslump
• The collapse of the postwar fixed exchange rate
mechanism
• August 1971 Nixon’s statement on suspension of dollar
convertibility and imposition of restrictive trade
measures
• European economies slipping into recession
• Need for a concerted anti inflationary action and
coordinated policy for exchange rate stability
accepted in the Paris summit
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Positions/Preferences
Brandt
Opposing the European Regional Development
Fund (ERDF)
Advocating float of the currency
Pompidou
Concerned with the impact of the currency
fluctuations on the CAP
Opposing a joint float
Support of the ERDF
Heath
ERDF – financial assistance for depressed regions
in the UK
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December, 1973, Copenhagen summit
• Continued inflation
• Worsening of oil crises: onset of embargo in
Rotterdam
• Need of a common energy policy and a concerted
response to the oil crisis
• EC Common position on the Middle East causing
further transatlantic tensions
• EC – US Trade disputes
• Kissinger’s call for a new Atlantic Charter and a
coordinated Western response to the oil crisis
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Positions/Preferences
Pompidou
 Opposing Kissinger’s initiative
 Advocating bilateral consumer producer bargains on concrete
supply issues
 UN stage for the multilateral negotiations on the general
political and economic differences
Brandt
 Support of the US position
 Continued Ostpolitik:
• Treaties with the SU, Wasaw, Prague
• Agreement on Berlin
• Accord between two Germanies
 Opposition to the ERDF
Heath
 Blocking discussions on energy to get a deal on the ERDF
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1974
• France - election of Giscard d’Estaing
• Germany – Brandt’s resignation and Helmut Schmidt
becoming the Chancellor
• The UK – Wilson’s reelection
Reestablishment of the French – German axis
Renegotiation of British accession agreement terms
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April 1974
Council meeting
James Callaghan voices the UK demands of the
Labor Party manifesto
Recalculation of the UK budgetary contribution
CAP reform
Commonwealth interests protection
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November 1974
Schmidt’s speech in the Labor party conference “We need the British”:
“My party feels that the advantages of the EEC so far do have
greater weight than the stresses and the burdens. After all it is an
organization, whose pace and direction can only be decided by
the agreement of all members. We feel that it provides us with
the necessary means of cooperation which we do need to solve
the problems of the present day crisis of the world economic
structure.”
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April 1975
The House of Commons approval of the governments’
recommendation that Britain should stay in the European
Community – 396 to 170 votes split
– Three pamphlets to each voter referendum campaign
– 1975 referendum 67 % vote in favor of staying
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December 1974
Paris summit
Schmidt brokerage between the British and French
leaders
• Agreement on the ERDF (UK getting the 28%)
• Correcting mechanism decision
• Decision to hold direct elections to the European
Parliament
• Decision to hold regular summits of the European
council as a forum for directing EC affairs
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March 1975
Dublin summit
Agreement on the British rebate negotiated
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Consequences of the corrective mechanism
hidden flaw
Conditional to overall deficit of the member state balance of
trade
• November 1979, Dublin summit, Margaret Thatcher demanding
British money back
• June 1984, Fontainebleau meeting of the European Council,
abatement agreement
Abatement
 Calculated on the basis of the difference between the British share of
community expenditure and the proportion of the Community VAT-based
revenue contributed by the UK
 Paid in the form of a reduced VAT contribution in the following year
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The stagflation period
• The large member states failure to provide leadership
 Germany strong economically, but not politically
 France, depressed economically and politically volatile
 The UK, weak politically and economically
 “Privileged partnership” impatience with the Commission
contribution to its dysfunctionalism
“Europe can only be brought forward by the will of a few statesmen, and not by
thousands of regulations and hundreds of ministerial councils”
• Inefficiency of the Brussels institutions
• The Council indecisiveness – lack of political will to revive European
integration
 Leo Tindemans reports (1975) on ways to advance European
integration (“two speed Europe”)
 The three wise men (Barend Biesheuvel, Edmund Dell, Robert
Marjolin) Report on European Institutions (1979)
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Lecture 6: Transformation of the
European Community (1979-1989)
• The second and third Enlargements (Greece, 1979, Spain and
Portugal, 1986).
• The Budgetary issues.
• The crisis in the Community.
• The Single European Act (1986).
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Readings for the lecture
• Dinan Desmond (1999) Ever Closer Union. An Introduction to
European Integration. Second edition. The European Union
Series. Palgrave. Chapter 4 and Chapter 5
• Thatcher M. A Family of Nations (1988). The European Union.
Readings on the Theory and Practice of European Integration,
Nelsen B.F. and Alexander C – G. Stubb (eds.), Palgrave, 1998;
• Delors J. A Necessary Union (1989). The European Union.
Readings on the Theory and Practice of European Integration,
Nelsen B.F. and Alexander C – G. Stubb (eds.), Palgrave, 1998;
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Readings for the lecture
• Robert O. Keohane and Stanley Hoffmann “ Institutional
Change in Europe in the 1980s” in “The new European
Community. Decision-making and Institutional Change”, Robert
O. Keohane and Stanley Hoffmann (eds), 1991, Westview press.
• Moravcsik A. Negotiating the Single European Act: National
Interest and Conventional Statecraft in the European Community
(1991). The European Union. Readings on the Theory and
Practice of European Integration, Nelsen B.F. and Alexander C –
G. Stubb (eds.), Palgrave, 1998.
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Thank you!
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