The European Coal and Steel Community

The European Coal and Steel Community (ECSC) was born from the desire to prevent future European conflicts following the devastation of World War II.

The European Coal and Steel Community (ECSC) was an international organization unifying certain continental European countries after World War II. It was formally established in 1951 by the Treaty of Paris, signed by Belgium, France, West Germany, Italy, the Netherlands, and Luxembourg. The ECSC was the first international organization based on the principles of supranationalism, and would ultimately pave the way for the European Union.

Flag of the European Coal and Steel Community

History

The ECSC was first proposed by French foreign minister Robert Schuman on May 9, 1950, to prevent further war between France and Germany. His declared aim was to make future wars among the European nations unthinkable due to higher levels of regional integration, with the ECSC as the first step towards that integration. The treaty would create a common market for coal and steel among its member states, which served to neutralize competition between European nations over natural resources used for wartime mobilization, particularly in the Ruhr. The Schuman Declaration that created the ECSC had several distinct aims:

• It would mark the birth of a united Europe.
• It would make war between member states impossible.
• It would encourage world peace.
• It would transform Europe incrementally, leading to the democratic unification of two political blocks separated by the Iron Curtain.
• It would create the world’s first supranational institution.
• It would create the world’s first international anti-cartel agency.
• It would create a common market across the Community.
• It would, starting with the coal and steel sector, revitalize the entire European economy by similar community processes.
• It would improve the world economy as well as the economies of developing countries, such as those in Africa.

Political Pressures

In West Germany, Schuman kept close contact with the new generation of democratic politicians. Karl Arnold, the Minister President of North Rhine-Westphalia, the province that included the coal and steel producing Ruhr, was initially spokesman for German foreign affairs. He gave a number of speeches and broadcasts on a supranational coal and steel community at the same time as Schuman began to propose the Community in 1948 and 1949. The Social Democratic Party of Germany (German: Sozialdemokratische Partei Deutschlands, SPD), in spite of support from unions and other socialists in Europe, decided it would oppose the Schuman plan. Kurt Schumacher’s personal distrust of France, capitalism, and Konrad Adenauer aside, he claimed that a focus on integration would override the SPD’s prime objective of German reunification and thus empower ultra-nationalist an  Communist movements in democratic countries. He also thought the ECSC would end any hopes of nationalizing the steel industry and encourage the growth of cartel activity throughout a newly conservative-leaning Europe. Younger members of the party like Carlo Schmid were, however, in favor of the Community and pointed to the long tradition of socialist support for a supranational movement.

In France, Schuman gained strong political and intellectual support from all sectors, including many non-communist parties. Charles de Gaulle, then out of power, had been an early supporter of linking European economies on French terms and spoke in 1945 of a “European confederation” that would exploit the
resources of the Ruhr. However, he opposed the ECSC, deriding it as an unsatisfactory approach to European unity. He also considered the French government’s approach to integration too weak and feared the ECSC would be hijacked by other nation’s concerns. De Gaulle felt that the ECSC had insufficient supranational authority because the Assembly was not ratified by a European referendum, and he did not accept Raymond Aron’s contention that the ECSC was intended as a movement away from U.S. domination. Consequently, de Gaulle and his followers in the Rally of the French People (RPF) voted against ratification in the lower house of the French Parliament.

Despite these reservations and attacks from the extreme left, the ECSC found substantial public support. It gained strong majority votes in all 11 chambers of the parliaments of the six member states, as well as approval among associations and European public opinion. The 100-article Treaty of Paris, which established the ECSC, was signed on April 18, 1951, by “the inner six”: France, West Germany, Italy, Belgium, the Netherlands, and Luxembourg. On August 11, 1952, the United States was the first non-ECSC member to recognize the Community and stated it would now deal with the ECSC on coal and steel matters, establishing its delegation in Brussels.

First Institutions

The ECSC was run by four institutions: a High Authority composed of independent appointees, a Common Assembly composed of national parliamentarians, a Special Council composed of national ministers, and a Court of Justice. These would ultimately form the blueprint for today’s European Commission, European Parliament, the Council of the European Union, and the European Court of Justice.

Luxembourg (City) Main Building of the BCEE

The main building of the BCEE in Luxembourg City was home to the former seat of the ECSC’s High Authority.

The High Authority (now the European Commission) was the first-ever supranational body that served as the Community’s executive. The President was elected by the eight other members. The nine members were appointed by member states (two for the larger three states, one for the smaller three), but represented the common interest rather than their own states’ concerns. The member states’ governments were represented by the Council of Ministers, the presidency of which rotated between each state every three months in alphabetical order. The Council of Ministers’ task was to harmonize the work of national governments with the acts of the High Authority and issue opinions on the work of the Authority when needed.

The Common Assembly, now the European Parliament, was composed of 78 representatives. The Assembly exercised supervisory powers over the executive. The representatives were to be national MPs elected by their Parliaments to the Assembly, or directly elected. The Assembly was intended as a democratic counter-weight and check to the High Authority. It had formal powers to sack the High Authority following investigations of abuse.

The European Economic Community

The European Economic Community blossomed from the desire to further regional integration following the successful establishment of the European Coal and Steel Community.

The European Economic Community (EEC) was a regional organization that aimed to integrate its member states economically. It was created by the Treaty of Rome of 1957. Upon the formation of the European Union (EU) in 1993, the EEC was incorporated and renamed as the European Community (EC). In 2009, the EC’s institutions were absorbed into the EU’s wider framework and the community ceased to exist.

Background

In 1951, the Treaty of Paris was signed, creating the European Coal and Steel Community (ECSC). This was an international community based on supranationalism and international law, designed to facilitate European economic growth and prevent future conflicts by integrating its members. With the aim of furthering regional integration, two additional communities were proposed: a European Defence Community and   European Political Community. While the treaty for the latter was drawn up by the Common Assembly, the ECSC parliamentary chamber, the proposed defense community was rejected by the French Parliament. ECSC President Jean Monnet, a leading figure behind the communities, resigned from the High Authority in protest and began work on alternative communities based on economic integration rather than political integration.

After the Messina Conference in 1955, Paul Henri Spaak was given the task of preparing a report on the idea of a customs union. Together with the Ohlin Report, the so-called Spaak Report would provide the basis for the Treaty of Rome. In 1956, Spaak led the Intergovernmental Conference on the Common Market and Euratom at the Val Duchesse castle. The conference led to the signature on March 25, 1957, of the Treaty of Rome, establishing a European Economic Community.

Creation and Early Years

The resulting communities were the European Economic Community (EEC) and the European Atomic Energy Community (EURATOM, or sometimes EAEC). The EEC created a customs union while EURATOM promoted cooperation in the sphere of nuclear power. One of the first important accomplishments of the EEC was the establishment in 1962 of common price levels for agricultural products. In 1968, internal tariffs between member nations were removed on certain products. The formation of these communities was met with protest due to a fear that state sovereignty would be infringed. Another crisis was triggered in regards to proposals for the financing of the Common Agricultural Policy (CAP), which came into force in 1962. The transitional period whereby decisions were made by unanimity had come to an end, and majority voting in the Council had taken effect. Then-French President Charles de Gaulle’s opposition to supranationalism and fear of the other members challenging the CAP led to an empty-chair policy in which French representatives were withdrawn from the European institutions until the French veto was reinstated. Eventually, the Luxembourg Compromise of January 29, 1966, instituted a gentlemen’s agreement permitting members to use a veto on issues of national interest.

Charles De Gaulle: French President Charles de Gaulle vetoed British membership, held back the development of Parliament’s powers, and was at the centre of the empty-chair crisis of 1965.

On July 1, 1967, the Merger Treaty came into force, combining the institutions of the ECSC and EURATOM into that of the EEC. Collectively, they were known as the European Communities. The Communities still had independent personalities although they were increasingly integrated. Future treaties granted the Community new powers beyond simple economic matters, edging closer to the goal of political integration and a peaceful, united Europe.

Enlargement and Elections

The 1960s saw the first attempts at enlargement. In 1961, Denmark, Ireland, Norway, and the United Kingdom applied to join the three Communities. However, President Charles de Gaulle saw British membership as a Trojan horse for U.S.influence and vetoed membership, and the applications of all four countries were suspended. The four countries resubmitted their applications on May 11, 1967, and with Georges Pompidou succeeding Charles de Gaulle as French president in 1969, the veto was lifted. Negotiations began in 1970 under the pro-European government of UK Prime Minister Sir Edward Heath, who had to deal with disagreements relating to the CAP and the UK’s relationship with the Commonwealth of Nations. Nevertheless, two years later the accession treaties were signed and Denmark, Ireland, and the UK joined the Community effective January 1, 1973. The Norwegian people finally rejected membership in a referendum on September 25, 1972.

Expansion of the European Communities, 1973-1992: Countries colored green represent founding members of the EEC, and blue countries represent members added later.

The Treaties of Rome stated that the European Parliament must be directly elected; however, this required the Council to agree on a common voting system first. The Council procrastinated on the issue and the Parliament remained appointed. Charles de Gaulle was particularly active in blocking the development of the Parliament, with it only being granted budgetary powers following his resignation. Parliament pressured for agreement and on September 20, 1976, the Council agreed part of the necessary instruments for election, deferring details on electoral systems that remain varied to this day. In June 1979, during the tenure of President Jenkins, European Parliamentary elections were held. The new Parliament, galvanized by a direct election and new powers, started working full-time and became more active than previous assemblies.

Towards Maastricht

Greece applied to join the Community on June 12, 1975, following the restoration of its democracy. Greece joined the Community effective January 1, 1981. Similarly, and after their own democratic restorations, Spain and Portugal applied to the communities in 1977 and joined together on January 1, 1986. In 1987, Turkey formally applied to join the Community and began the longest application process for any country. With the prospect of further enlargement and a desire to increase areas of cooperation, the Single European Act was signed by foreign ministers in February 1986. This single document dealt with the reform of institutions, extension of powers, foreign policy cooperation, and the single European market. It came into force on July 1, 1987. The act was followed by work on what would become the Maastricht Treaty, which was agreed to on December 10, 1991, signed the following year, and came into force on November 1, 1993, establishing the European Union.

The European Union

Although the European Union was formed to increase cooperation among member states, the desire to retain national control over certain policy areas made some institutions more intergovernmental than supranational in nature.

The European Union (EU) is a politico-economic union of 28 member states located primarily in Europe. It has an area of 4,324,782 km² (1,669,808 sq mi) and an estimated population of over 510 million. The EU has developed an internal single market through a standardized system of laws that apply in all member states. EU policies aim to ensure the free movement of people, goods, services, and capital within the internal market, enact legislation in justice and home affairs, and maintain common policies on trade, agriculture, fisheries, and regional development. Within the Schengen Area, passport controls have been abolished. A monetary union was established in 1999 and came into full force in 2002, and is composed of 19 EU member states which use the euro currency.

The EU operates through a hybrid system of supranational and intergovernmental decision-making. The seven principal decision-making bodies—known as the institutions of the European Union—are the European Council, the Council of the European Union, the European Parliament, the European Commission, the Court of Justice of the European Union, the European Central Bank, and the European Court of Auditors.

The EU traces its origins from the European Coal and Steel Community (ECSC) and the European Economic Community (EEC), formed by the Inner Six countries in 1951 and 1958, respectively. The Community and its successors have grown in size by the accession of new member states and in power by the addition of policy areas to its remit.

Maastricht Treaty

The European Union was formally established when the Maastricht Treaty—whose main architects were Helmut Kohl and François Mitterrand—came into force on November 1, 1993. The treaty established the three pillars of the European Union: the European Communities pillar, which included the European Community (EC), the ECSC, and the EURATOM; the Common Foreign and Security Policy (CFSP) pillar; and the Justice and Home Affairs (JHA) pillar. The first pillar handled economic, social, and economic policies. The second pillar handled foreign policy and military matters, and the third pillar coordinated member states’ efforts in the fight against crime.

All three pillars were the extensions of existing policy structures. The European Community pillar was a continuation of the EEC. Additionally, coordination in foreign policy had taken place since the 1970s under the European Political Cooperation (EPC), first written into treaties by the Single European Act. While the JHA extended cooperation in law enforcement, criminal justice, asylum, and immigration as well as judicial cooperation in civil matters, some of these areas were already subject to intergovernmental cooperation under the Schengen Implementation Convention of 1990.

The creation of the pillar system was the result of the desire by many member states to extend the EEC to the areas of foreign policy, military, criminal justice, and judicial cooperation. This desire was met with misgivings by some member states, notably the United Kingdom, who thought some areas were too critical to their sovereignty to be managed by a supranational mechanism. The agreed compromise was that instead of completely renaming the European Economic Community as the European Union, the treaty would establish a legally separate European Union comprising the European Economic Community and entities overseeing intergovernmental policy areas such as foreign policy, military, criminal justice, and judicial cooperation. The structure greatly limited the powers of the European Commission, the European Parliament, and the European Court of Justice.

Euro Convergence Criteria

Euro banknotes (2002): The euro was introduced in 2002, replacing 12 national currencies.

The Maastricht, or convergence, criteria established the minimum requirements for EU member states to enter the third stage of European Economic and Monetary Union (EMU) and adopt the euro as their currency. The four criteria are defined in article 121 of the treaty establishing the European Community. They impose control over inflation, public debt and the public deficit, exchange rate stability, and the convergence of interest rates. The purpose of this criteria was to maintain price stability within the Eurozone even with the inclusion of new member states.

• Inflation rates: No more than 1.5 percentage points higher than the average of the three best performing (lowest inflation) member states of the EU.
• Government finance:

1. Annual government deficit: The ratio of the annual government deficit to gross domestic product (GDP) must not exceed 3% at the end of the preceding fiscal year. If not, it must reach a level close to 3%. Only exceptional and temporary excesses would be granted for exceptional cases.
2. Government debt: The ratio of gross government debt to GDP must not exceed 60% at the end of the preceding fiscal year. Even if the target cannot be achieved due to specific conditions, the ratio must have sufficiently diminished and be approaching the reference value at a satisfactory pace. As of the end of 2014, of the countries in the Eurozone, only Estonia, Latvia, Lithuania, Slovakia, Luxembourg, and Finland still met this target.

• Exchange rate: Applicant countries should have joined the exchange-rate mechanism (ERM II) under the European Monetary System (EMS) for two consecutive years and should not have devalued its currency during the period.
• Long-term interest rates: The nominal long-term interest rate must not be more than 2 percentage points higher than in the three lowest-inflation member states.

Lisbon Treaty and Beyond

The Lisbon Treaty: In 2009, the Lisbon Treaty entered into force.

On December 1, 2009, the Lisbon Treaty reformed many aspects of the EU. In particular, it changed the legal structure, merging the three pillars system into a single legal entity provisioned with a legal personality; created a permanent President of the European Council; and strengthened the position of the High Representative of the Union for Foreign Affairs and Security Policy. During the 2010s, the cohesion of the EU has been tested by several issues, including a debt crisis in some of the Eurozone countries, increasing migration from the Middle East, and the United Kingdom’s withdrawal from the EU. As of December 2016, the UK has not yet initiated formal withdrawal procedures.