1.1.2.     Developments up to the Single European Act

1. Main achievements in the first stage

Article 8 of the Treaty of Rome provided for completion of a common market over a transitional period of 12 years, in three stages ending on 31 December 1969. Its first aim, the customs union, was completed more quickly than expected. The transitional period for enlarging quotas and phasing out internal customs ended as early as 1 July 1968. By the same date Europe had adopted a common external tariff for trade with third countries. ‘Green Europe’ was the second major project for European integration. The first regulations on the CAP were adopted and the European Agricultural Guidance and Guarantee Fund (EAGGF), was set up in 1962. Meanwhile the Court of Justice interpreted the regulations on the transitional period in such a way that, when it ended, a number of Treaty provisions took direct effect, such as Articles 13, 30, 48, 52 and 59 (* 3.2.3). Even so, at the end of the transitional period there were still major obstacles to freedom of movement; the single market was not complete.

2. First amendment of the Treaties

The first institutional change came about with the Merger Treaty of 8 April 1965. This took effect in 1967, setting up a single Council and Commission of the European Communities (the ECSC, EEC and EAEC) and introducing the principle of a single budget. The Council Decision of 21 April 1970 set up a system of the Community's own resources, replacing financial contributions by the Member States (* 1.5.1).

At the same time, the Treaty of Luxembourg of 22 April 1970 granted Parliament certain budgetary powers (* 1.3.1). Eventually, by the Treaty of Brussels of 22 July 1975, Parliament obtained the right to reject the budget and to grant the Commission a discharge for implementing the budget. The same Treaty set up the Court of Auditors, a body responsible for scrutinising the Community's accounts and financial management, which began work on 25 October 1977. In the ensuing period Parliament systematically used its budgetary powers to develop the Community's action. The Act of 20 September 1976 had given it a new legitimacy and authority by introducing its direct election by Community citizens. The first election took place in June 1979 (* 1.3.1).

Meanwhile the Community was getting larger. The UK joined on 1 January 1973, together with Denmark and Ireland; the Norwegian people had voted against accession in a referendum. Greece became a member in 1981; Portugal and Spain joined in 1986.

After this first round of enlargement there were calls for greater budgetary rigour and reform of the CAP. The 1979 European Council reached agreement on a series of complementary measures. The Fontainebleau agreements of 1984 obtained a sustainable solution, based on the principle that adjustments could be made to assist any Member State with a financial burden that was excessive in terms of its relative prosperity.

3. Events of institutional importance

Encouraged by the initial successes of the economic community, the aim of also creating political unity for the Member States resurfaced in the early 1960s.

a. a. At the 1961 Bonn summit the Heads of State and Government of the six founding Member States of the European Community asked an intergovernmental committee, chaired by the French ambassador Christian Fouchet, to put forward proposals on the political status of a union of European peoples. This research committee tried vainly, on two occasions between 1960 and 1962, to present the Member States with a draft treaty that was acceptable to all. Fouchet based his plan on strict respect for the identity of the Member States, thus rejecting the federal option. The negotiations failed on three objections: uncertainty as to the place of the United Kingdom, disagreement on the issue of a European defence system aiming to be independent of the Atlantic Alliance, and the excessively intergovernmental nature of the institutions proposed, which was likely to undermine the supranational aspect of the existing Community Institutions. After the failure of the Fouchet proposals there were no further attempts at a fundamental review of the Community Treaties until the Spinelli initiative in 1984. The debate on the form a future political union might take continued at a more pragmatic level in a number of reports and resolutions, such as the Tindemans report, the report of the Three Wise Men, the Genscher-Colombo initiative and the Solemn Declaration, see below. In the absence of a political community, its substitute took the form of European Political Cooperation, or EPC (* 6.1.1). At the summit conference in The Hague in December 1969 the Heads of State and Government decided to look into the best way of making progress in the field of political unification. The Davignon report, adopted by the foreign ministers in October 1970 and subsequently amplified by further reports, formed the basis of EPC until the Single Act entered into force.

b. b. A serious crisis arose when the tricky issue of moving on to the third stage of the transition period (due on 1 January 1966) began to emerge. At this stage voting procedures in the Council were to change, with a move from unanimous to qualified majority voting in certain areas. The change of voting method reflected greater emphasis on a supranational approach in the Community. France opposed a range of Commission proposals, which included measures for financing the common agricultural policy, and stopped attending the main Community meetings (its ‘empty chair' policy). In exchange for its return it demanded a political agreement on the role of the Commission and majority voting, which would involve a complete review of the treaty system. Eventually, on 30 January 1966, agreement was reached on the celebrated Luxembourg Compromise (* 1.3.6), which stated that when vital interests of one or more countries were at stake members of the Council would endeavour to reach solutions that could be adopted by all while respecting their mutual interests.

c. c. Meanwhile, although they were outside the Community institutional context, the conferences of Heads of State and Government of the Member States were induced to provide some political impetus and settle the problems that the normal Council could not handle. After early meetings in 1961 and 1967 the conferences took on increasing significance with the Hague Summit of 1 and 2 December 1969, which allowed negotiations to begin on enlarging the Community and agreed on the Community finance system. The October 1972 Paris summit declarations went on to announce an intention to use the Treaty provisions, including Article 235, as widely as possible in the fields of environmental, regional, social and industrial policy; while the Fontainebleau summit declarations in December 1974 covered major political decisions on direct elections, the European Regional Fund and the Council’s decision-making procedure. At that point it also decided to meet three times a year as the ‘European Council’ to discuss Community affairs and political cooperation (* 1.3.7). To revive the process of European integration the Belgian Prime Minister Leo Tindemans was given the task of drawing up a report on European union. Presented on 29 December 1975, his report put forward a series of proposals on external relations, economic and monetary policy and the citizens’ Europe. But it did not result in any specific reforms.

d. d. Towards the end of the 1970s there were various reactions in the Member States to the worsening economic crisis, and this affected efforts to bring their economic and fiscal policies into line. The Heads of Government decided in 1978 to set up a committee of three ‘Wise Men’, Barend Biesheuvel, Edmond Dell and Robert Marjolin, to consider ‘adjustments to the machinery and procedures’ of the Institutions, so as to provide for the harmonious operation of the Communities and further progress on the road to European union. That progress was confined to practical suggestions on organising Council business and relations with the Commission and Parliament, but only some of them were taken up. To solve the problem of monetary instability and its adverse effects on the CAP and cohesion between Member States, the Bremen and Brussels European Councils in 1978 set up the European Monetary System (EMS). Established on a voluntary and differentiated basis (the UK decided not to participate in the exchange-rate mechanism) the EMS depended on the existence of a common accounting unit, the ECU (* 5.1.0).

At the London European Council in 1981 the foreign ministers of Germany and Italy, Mr Genscher and Mr Colombo, put forward a proposal for a ‘European Act’ covering a range of subjects: political cooperation, culture, fundamental rights, harmonisation of the law outside the fields covered by the Community Treaties, and ways of dealing with violence, terrorism and crime. It was not adopted in its original form, but some parts of it resurfaced in the ‘Solemn declaration on European Union' adopted in Stuttgart on 19 June 1983. This text forms an important part of the backcloth to the Single European Act.

e. A few months after its first direct election in 1979 Parliament ran into a serious crisis in its relations with the Council, over the budget for 1980. At the instigation of Altiero Spinelli MEP, founder of the European Federalist Movement and a former Commissioner, a group of nine MEPs met at the ‘Crocodile’ restaurant in Strasbourg in July 1980 to discuss ways of relaunching the operation of the Institutions. In July 1981 Parliament set up an institutional affairs committee, with Spinelli as its coordinating rapporteur, to draw up a plan for amendment of the existing Treaties. The Spinelli group and the subsequent committee rapidly decided to formulate plans for what was to become the European Union. The draft Treaty was adopted by a large majority on 14 February 1984. It was a major leap forward, providing for the transfer of new responsibilities in essential fields. Legislative power would come under a twin-chamber system akin to that of a federal State. The system aimed to strike a balance between Parliament and the Council. This was how the process leading to the Single European Act got off the ground.

4. Developments up to the Single European Act

Having settled the Community budget dispute of the early 1980s the European Council decided at its Fontainebleau meeting in June 1984 to set up an ad hoc committee of the personal representatives of the Heads of State and Government, known as the Dooge committee after its chairman. The committee was asked to make proposals for improving the functioning of the Community system and of political cooperation. It drew up an interim report for the European Council meeting in Dublin in December 1984. The report proposed a major step forward in qualitative terms, particularly in the institutional sphere. The Dublin European Council said the committee should continue to work towards a consensus, as three of the ten representatives had expressed serious reservations about the text of the report. But the European Council in Milan in June 1985 decided by a majority vote (of 7 to 3, an exceptional procedure in that body) to convene an intergovernmental conference to consider the powers of the Institutions, the extension of Community activities to new areas and the establishment of a 'genuine' internal market.

The Intergovernmental Conference met during the summer and autumn of 1985, and as a result of a number of disagreements submitted a set of somewhat disparate texts to the European Council meeting in Luxembourg on 2 and 3 December 1985. With some difficulty, the Council adopted conclusions and the Foreign Ministers knocked them into shape on 27 January 1986.

5. The Single European Act (SEA): an important stage

On 17 February 1986 nine Member States signed the SEA, followed later by Denmark (after a referendum voted in favour), Italy and Greece, on 28 February 1986. The Act was ratified by Member States' parliaments during 1986, but because a private citizen had appealed to the Irish courts its entry into force was delayed for six months, until 1 July 1987.

The SEA was the first substantial change to the Treaty of Rome. Its main objectives were:

• creating a large internal market by 1 January 1993;
• increasing the role of Parliament in order to rectify the democratic deficit in the Community's decision-making process;
• improving the decision-making capacity of the Council of Ministers.

The SEA's provisions for creating the internal market strongly boosted an objective that was already set out in the original Treaties. Decision-making was streamlined by more frequent use of qualified majority voting, which

-   replaced unanimity in four of the Community's existing responsibilities:

• amendment of the common customs tariff,
• freedom to provide services,
• the free movement of capital,
• the common sea and air transport policy;

-   was introduced for several new responsibilities:

• the internal market,
• social policy,
• economic and social cohesion,
• research and technological development,
• the environment;

-   formed the subject of an amendment to the Council's internal rules of procedure, so as to comply with the Presidency's declaration on Article 149(2) of the EEC Treaty in the Final Act of the SEA. This states that in future a vote may be called in the Council not only on the initiative of its President, but also at the request of the Commission or a Member State if a simple majority of the Council's members are in favour. They must receive two weeks' notice of such a request.

The SEA strengthened the Community's powers by creating new responsibilities: a monetary capability, social policy, economic and social cohesion, research, technological development and the environment. It also introduced cooperation on foreign policy at Treaty level.

The SEA strengthened Parliament's powers by making Community agreements on enlargement and association agreements subject to Parliament's assent. For the legislative process it introduced a procedure for cooperation between Parliament and the Council (* 1.4.1) which gave Parliament real, if limited, legislative powers. It applied to about a dozen legal bases at the time and marked a crucial point in the transformation of Parliament as co-legislator, on an equal footing with the Council.

16/11/2000