Prerequisites for The European Union Formation and Its Development - Research Paper Example

The European Union stands out as a political economic phenomenon and a historic testimony to the fact that regional integration, despite challenges and resistance from within, can transform from a dream to a reality. Originally envisioned in 1948, the process of gradual integration began in 1952. As Herbert Biggs explains, the Treaty of Paris was proposed and passed at a time when Europe, politically and economically weakened by World War II, realized that it would not be able to restore its previous political and economic influence were it not to enter into closer regional economic cooperation and plan for political and economic integration. At this stage in history, and despite realization of the importance of integration, only six European countries, Belgium, France, the Federal Republic of Germany, Italy, Luxembourg and the Netherlands, signed the Treaty of Paris (Biggs, 110-111). Great Britain, possibly encouraged by the fact that it was not part of continental Europe, refrained from signing this treaty. The second major stage in the formation of the EU, came in the form of the Treaty of Rome in 1957 and the subsequent creation of the European Economic Community. This treaty, as Gordon Weil explains, established the principles, laws and institutions for much closer economic cooperation, leading towards integration, between the member states. Again Britain refused to sign the treaty and rejected the prospect of European integration. As Loukas Tsoukalis explains, Britain's resistance, as was the case with other European countries, was based on the simple fact that it feared that it would loose its national identity and that the British state would loose its sovereignty over the country. Quite simply stated, resistance to integration was based on the fear of the consequences of integration to national identity and sovereignty (439-441). However, by 1973 and following the economic success and growth of the European Economic Community, Britain realized the benefits of membership and became a full-member of the ECC (437-438). From the treaties of Paris and Rome, the European Union was born. Currently comprised of 25 countries, with a population of almost half a billion, it is regarded as a superpower, both economically and politically. Britain is, needless to say, one of the EU's most prominent members and within the framework of the union, is a power in its own right. Despite the fact that it is a fully integrated EU member, not to mention an extremely influential one, and has benefited both politically and economically from its membership, Britain remains resistant to the deeper economic and political integration which monetary unification represents. Lee Miles, conceding that "Economic and Monetary Unification has always been a sensitive policy area" due to the fact that it entails the resignation of a substantial amount of sovereignty over domestic economies, argues that the economic benefits outweigh the loss to sovereignty (3). Even though monetary integration would necessitate Britain's conceding large parts of its economic sovereignty to the EU, the facts seem to indicate that Britain, as a signatory of the Single European Act and as a member state which is obligated to accept the supremacy of EU law, is not safeguarding its sovereignty over its domestic economy through its rejection of monetary unification. Quite simply stated, it has already resigned a significant amount of that sovereignty and has already accepted the supremacy of EU law. This leads to the conclusion that rejection of monetary unification, while partly related to domestic fiscal and monetary policies, expresses Britain's commitment to its national identity and heritage and its refusal that this identity be overwhelmed by the European one. Through an examination of the implications of the Single Europe Act and the doctrine of supremacy, the paper shall seek to prove this point. The Single Europe Act and Supremacy of EU Law The Single European Act [SEA], entered into force in 1987, had two fundamental goals. According to Pinder the first of these goals was the creation of a single European market, characterized by legislative harmony, and common practices, ultimately giving rise to that level of intra-regional economic, commercial and labor as required for the establishment, and subsequent sustenance, of a single monetary regime. Within the matrix of the stated goal, the SEA effectively obliterated artificial and national boundaries to the movement of goods, labor and services, across and between EU member states (Pinder). It establishes the legal basis for the unrestricted movement of capitals goods and services between member states, effectively declaring the legal obliteration of intra-EU national boundaries and the replacement of the aforementioned with a single EU regional/supra-national boundary. The first goal of the SEA, as articulated in the above was not just the establishment of a single EU market but the solidification of the region's singularity of market. As Westlake explains, the creation, and subsequent fortification, of the envisioned EU market was deemed impossible were the economic aspect of the integrative process not accompanied by the establishment of legal and political institutions and policies as would facilitate and legitimize the latter. Within the contextual framework of the aforementioned, the second goal of the SEA was articulated as the reformation of existent EU political institutions for the explicit purpose of maximizing efficiency of supra-national intra-EU operations, the legitimization and fortification of the sovereignty of EU law and the integration of foreign policy into EU regional treaties for the purpose of increased harmonization between political and economic institutions and operations across the member states (Westlake). In terms of its goals, SEA has been successful. In affirming the success of the SEA, Huelshoff argues that SEA must be comprehended as the first of the series of radical treaties which transformed the European Economic Community from a bloc of economically interdependent countries which sought the harmonization of economic policy in specific areas, to the European Union, a sprawling regional bloc characterized by deep economic and political integration and harmonization. The SEA succeeded in the stated primarily due to the fact that it fortified the linkage between the Union's economic and political institutions, thereby ensuring that the one will no function as an impediment to the others, even as it introduced the notion of the sovereignty of EU law (Huelshoff). From this perspective, therefore, the SEA can be safely judged a success insofar as established the supremacy of EU law over certain aspects of national law, especially as relates to economic and fiscal policy, and solidified the inextricable co-dependant interrelationship between EU political and economic institutions so that, instead of their conflicting with one another as had often occurred prior to the passage of the SEA, they would complement one another, with each facilitating the success of the other. In other words, the SEA established the legal framework for the evolution o the EU, not just as an economic bloc but as a deeply integrated regional and political unit. Largely agreeing, Kreppel contends that the SEA achieved both the first and the second through the establishment of the European Parliament's [EP] co-equal status with the Council of Ministers, further endowing the latter with the legal authority to take the initiative in the formulation, discussion and passage of legislature. The aforementioned co-equal status, concomitant with the legislative powers and discretions awarded, functioned to establish, not just the supra-national institutional framework of the EU but the sovereignty of European Union law, ultimately allowing for harmonization throughout the EU and paving the way for expansion of membership. It did so consequent to the fact that the establishment of supra-national institutions, fortified by the sovereignty, or supremacy of EU law, enabled the relevant legislative, executive and judiciary EU bodies to establish the uniformity of law and institutions throughout the EU simply by affirming that EU law superseded national law as pertained to the movement and treatment of goods, labor, services and capital (Kreppel, 2003). In doing so, the SEA effectively fortified the EU's supranational institutions and established the legal parameters within which existent and future members must operate and by which they must abide. Effect on Britain Moravcsik writes that Britain, as is the case with the other EU signatories of the Single Europe Act, is in a position where it has to redefine the concept of national sovereignty. Certainly, unlike those EU members which have adopted monetary unification, Britain has retained a greater degree of sovereignty over its fiscal and monetary policy but, as a signatory of SEA it has not retained sovereignty as such. SEA has established the British economy as part of the wider European service, goods and labor economy. It is not simply a domestic economy which is influenced by regional affairs but, within the context of integration, supremacy of EU law over national laws and SEA, largely inseparable from the European economy. In emphasizing this point, Moravcsik highlights the fact that the movement of labor, for example, across national economic borders, does not simply impact domestic economic performance but introduces factors into the economic which must be considered when devising monetary and fiscal policies. As just one theoretical example, the movement of labor into the United Kingdom could exacerbate unemployment while the movement of labor out o the United Kingdom could lead to labor shortage. In either case, be it shortage of labor or shortage of employment opportunities, the fact is that domestic economic and fiscal policies must respond to either of these phenomena and must be focused on resolving any potential problems which they my pose to the economy. In other words, through its ratification of SEA and its acceptance of economic and political integration, not to mention the supremacy of EU law, Great Britain has already resigned a significant amount of its economic sovereignty and its capacity to exert direct control over its fiscal and its monetary policies. In this case, and as Aspinwall argues, the resistance to monetary unification is more about national ideology than it is about concern over the effect of monetary unification on the domestic economy. To further establish the fact that Britain's resistance to monetary integration is based on concerns over national identity, rather than a determination to retain economic sovereignty, Niels and ten Kate look at EU competition laws from the perspective of the doctrine of EU supremacy. As they explain, following the implementation of SEA, the EU took measures that would ensure that competition across the EU would be fair and free and that no monopolies would develop. To understand the implications of this as far as Britain is concerned, the British Airways example is very useful. Quite simply stated, through its customer loyalty scheme which provided customers with holiday discounts, British Airways soon gained a monopoly over the British holiday sector. Virgin Airlines took British Airways to the European Court which subsequently ruled that the loyalty scheme, as it was practiced and insofar as it targeted British holidayers, was unfair competition and contrary to the EU's competition law. British Airways was forced to redesign its marketing strategies following that (Niels and ten Kate). The point here, and as this example illustrates, is that the British economy and the activities of British companies within it have to abide by European Union law. Britain has lost a great deal of its economic sovereignty. Its economic policies have to be consistent with the EU policies and the activities of British corporations, even within the British economy, have to be consistent with European policies. The implication, therefore, is that to interpret Britain's rejection of monetary integration as concern over loss of sovereignty over the domestic economy or over fiscal and monetary policy is wrong. To a large degree and because Britain must ensure that its economic, fiscal and monetary policies, not to mention the laws governing the activities and behaviors of domestic corporation, must be consistent with EU policies, it has already lost a large part of this type of sovereignty. Furthermore, and because it can no longer control the movement of labor, goods and services from within the EU into its own economy, it has also lost a large degree f the control it can exert over the factors which influence economic performance. Accordingly, one has to determine that there is another reason for its rejection of monetary integration. Conclusion: National Identity Discussing the question of European monetary integration and reviewing the concerns that some countries expressed over their membership in it, Louis Quaglia mentions the factor of national identity. A national currency is a national symbol; it represents a country, its independent identity and is an indicator of its own national economic performance (Quaglia). In other words, a national currency has nationalistic symbolic meaning. Giving up the national currency, accordingly, could also symbolize giving up independent national identity. Certainly, to say that Britain refuses to join the European Monetary Union because of nationalistic reasons does not sound pragmatic but, Aspinwall and Miles argue that this is he case. As Miles writes, Britain has decided that it will be a "Euro-outsider," not because it wants to retain sovereignty over its monetary, fiscal and economic policies, although these are a concern but, because it wants to retain its independent national identity. Further, as Aspinwall explains, Britain wants to be a part of the European Union because of the political and economic advantages of membership but, it does not want to replace the British identity with the European one. If it adopts the European currency, it could be doing just that. Bibliography Aspinwall, Mark. "What's the Matter With the British Ideology and Government Support for the European Monetary System." European Journal of Political Research. 42. 2003. Academic Search Premier. EBSCOhost. Briggs, Herbert W. "The Proposed European Political Community." The American Journal of International Law. 48, 1. Jan. 1954. JSTOR. Huelshoff, Michael G. "Domestic Politics and Dynamic Issue Linkage: A Reformulation of Integration Theory." International Studies Quarterly. 38. 1994. Academic Search Premier. EBSCOhost. Kreppel, Amie. "Necessary but not sufficient: Understanding the impact of treaty reform on the internal development of the European Parliament." Journal of European Public Policy. 10, 6. 2003. Academic Search Premier. EBSCOhost. Miles, Lee. "Introduction: Euro-Outsiders and the Politics of Asymmetry." European Integration. 27, 1. March 2005. Academic Search Premier. EBSCOhost. Moravcsik, Andrew (1991). "Negotiating the Single European Act: National interests and conventional statecraft in the European Community." International Organizations. 45, 1. 1991. Academic Search Premier. EBSCOhost. Niels, Gunner and Adrian ten Kate. "Introduction: Antitrust in the US and the EU - Converging or diverging paths" AntiTrust Bulletin. 49, . Spring/Summer 2004. Academic Search Premier. EBSCOhost. Pinder, John. A Short Guide to the European Union. Oxford: Oxford University Press, 2001. Quaglia, Lucia. "Italy's Policy Towards European Monetary Integration: Bringing Ideas Back In" Journal of European Public Policy. 11, 6. December 2004. Academic Search Premier. EBSCOhost. Tsoukalis, Loukas. "A Community of Twelve in Search of An Identity." International Affairs. 54, 3. Jul. 1978. JSTOR. Weil, Gordon W. "The Merger of the Institutions of the European Community." The American Journal of International Law. 61, 1. Jan. 1967. JSTOR. Westlake, Martin. A Modern Guide to the European Parliament. London: Pinter Press, 2004. Read More