EU History II

1
EU History II

• Eurosclerosis, 1973-1984

2
Legion of internal and external problems

• The impact of enlargement (Britains budgetary
  crisis)
• Oil crisis (aftermath of Arab-Israeli war, Arab
  producers quadruple the price of oil, and embargo
  port of Rotterdam)
• Fluctuating superpower relations
• German unassertiveness (strong economically but
  politically unassertive)
• Oscillating exchange rates (US devaluing the
  dollar)
• Uneven economic performance among member states
• Paralyzed decision-making process (Unanimity)
• Massive CAP spending, out of control. In the
  early 1980s the CAP had run out of control with
  an obscene accumulation of surplus production for
  which farmers received guaranteed high prices.
• Inflation, unemployment, trade deficits

3
Britain Renegotiates

• --Wilson returns to office after Labours
  victory British concerns
• Recalculation of Britains contribution to the EC
  budget
• Reform of the CAP
• Protection of Commonwealth interests (New Zealand
  dairy products
• --January 1975, Commission Publishes report The
  unacceptable situation and the correcting
  mechanism. The eight accept New Zealand imports
  and Wilson aggress that the correcting mechanism
  yielded a reasonable figure for Britain.

4
Tariffs in the EC

• Poor leadership and growing divergence between
  member states. States apply non-tariff barriers.
• The launch of the European Council in 1975 helped
  hold the EC together.
• Giscard dEstaing and Helmut Schmidt pressed for
  regular institutionalized summits of EC prime
  ministers (and French president).

5
Reports on the status of EEC

• Tindemans Report (1976) on ways to advance
  European integration focused less on a federal
  Europe and more on institutional reforms and a
  small increase of EC competence.
• 3 Wise Men Report (1979) reform without Treaty
  revision. Report criticized the Commission but
  also criticized the political leaders for their
  unwillingness to act. Report has the same luck as
  the Tindeman report went into the archives.

6
The European Monetary System

• Jenkins (Commission president from 1977-81)
  sought to create a monetary union as a regimen
  for stagflation (inflation, low growth and
  unemployment).
• --Compensatory amounts and compromise
• Germans and French compromised on compensatory
  amounts funds introduced in the early 70s to
  cushion the CAP from exchange rate fluctuations.
  French support the EMS.

7
The British Budget Problem

• --Thatcher to the offensive
• In Strasbourg June, 1979 Thatcher infuriates all
  members.
• In Dublin November, 1979 Thatcher demands
  Britains money back, without a having a precise
  number.
• In Luxembourg 1980 figures for an interim
  two-year period are presented (difference between
  demanded and offered was only 400 million ECU).
  Thatcher rejects the compromise.
• May 1980 Thatcher agrees to a refined offer made
  by the eight at the foreign ministers meeting in
  Brussels. Merely a temporary solution, with
  Thatcher returning to the offensive once the
  interim period ended at 1983 Stuttgart Summit.

8
The British Budget Problem

• --1984, France takes over Council presidency
  Mitterrand launches a concerted diplomatic
  offensive to try and bring the issue to a close
  before the Fontainebleau summit.
• Fontainbleau summit A possible solution emerged
  based on a rebate in the form of a fixed
  percentage each year of Britains net
  contributions 66 percent.
• Agricultural spending is curtailed, increase of
  the ECs own resources by increasing from 1.0 to
  1.4 of the VAT

9
Impetus for political and economic integration

• --The Commission
• European Strategic Program for Research and
  Development in Information Technology (ESPRIT).
• principle of mutual recognition following a
  landmark case in the ECJ. Commission avoids the
  impossible process of harmonizing member states
  diverse legal norms

10
Impetus for political and economic integration

• --The Genscher-Colombo proposals
• launched an initiative to assert the ECs
  international identity, while reassuring the US
  of its intentions. The proposal advocated more
  effective decision making and greater EC
  competence in external relations.
• Gives Rise to Solemn Declaration on European
  Union.

11
Impetus for political and economic integration

• --The European Parliament
• Altiero Spinneli and the Crocodile Club
  (dedicated to reforming the EC, and increasing
  its powers).
• 1981 The Crocodile Club becomes the
  Institutional Affairs Committee.
• February 1984 Draft Treaty Establishing the
  European Union is passed through the EP.