130-660: The European Exchange Rate Mechanism ( ERM II ) is a system introduced by the European Economic Community on 1 January 1999 alongside the introduction of a single currency , the euro (replacing ERM 1 and the euro's predecessor, the ECU ) as part of the European Monetary System (EMS), to reduce exchange rate variability and achieve monetary stability in Europe. After the adoption of
260-697: A gentlemen's agreement permitted members to use a veto on areas of national interest. On 1 July 1967, when the Merger Treaty came into operation, combining the institutions of the ECSC and Euratom into that of the EEC, they already shared a Parliamentary Assembly and Courts . Collectively they were known as the European Communities . The Communities still had independent personalities although were increasingly integrated. Future treaties granted
390-568: A referendum in France narrowly supported the ratification of the treaty, with 50.8% in favour. This narrow vote for ratification in France, known at the time as the ' petit oui ', led Jacques Delors to comment that "Europe began as an elitist project in which it was believed that all that was required was to convince the decision-makers. That phase of benign despotism is over." In the United Kingdom parliament ratification did not command
520-596: A shared European citizenship , for the eventual introduction of a single currency , and (with less precision) for common foreign and security policies , and a number of changes to the European institutions and their decision taking procedures, not least a strengthening of the powers of the European Parliament and more majority voting on the Council of Ministers . Although these were seen by many to presage
650-541: A " federal Europe ", key areas remained inter-governmental with national governments collectively taking key decisions. This constitutional debate continued through the negotiation of subsequent treaties (see below), culminating in the 2007 Treaty of Lisbon . In the wake of the Eurozone debt crisis unfolding from 2009, the most enduring reference to the Maastricht Treaty has been to the rules of compliance –
780-460: A clear majority. In protest against the social-policy opt out, Labour opposed, while "anti-federalists" split the governing Conservatives . Prime Minister John Major was able to face down his " Maastricht Rebels " only by tying ratification to the survival of the government in a vote of confidence. (Researchers and observers suggest that, in the United Kingdom, the Maastricht Treaty represented "a critical turning point" in terms of divisions within
910-680: A common defence". Title II, Provisions Amending the Treaty Establishing the European Economic Community, reformulates the EEC as the central "pillar" of the Union. It amends the EEC's Treaty of Rome constitution, renaming it the European Community to reflect the Union's broader ambition. Amendments incorporate (as detailed in attached protocols) a staged progression toward monetary union including
1040-503: A full summary of all applying exchange-rate regimes for EU members , since the European Monetary System with its Exchange Rate Mechanism and the related new common currency ECU came into being on 13 March 1979. The euro replaced the ECU 1:1 at the exchange rate markets, on 1 January 1999. Between 1979 and 1999 the D-Mark functioned as a de facto anchor for the ECU, meaning there was only
1170-530: A huge boost to Euro-scepticism; and made currency traders like George Soros rich. The ERM was the centrepiece of the European Monetary System (EMS), set up on voluntary basis in 1978 to reduce the "barrier" that exchange-rate volatility presented for intra-Community commerce (and for the management of payments under the Common Agricultural Policy ). Britain had signed up to the ERM in 1990 as
1300-488: A minor difference between pegging a currency against the ECU and pegging it against the D-Mark. Sources: EC convergence reports 1996-2014 , Italian lira , Spanish peseta , Portuguese escudo , Finnish markka , Greek drachma , Sterling The eurozone was established with its first 11 member states on 1 January 1999. The first enlargement of the eurozone , to Greece, took place on 1 January 2001, one year before
1430-539: A number of anomalous issues. Provided that all Member States ratify, it rules that the Treaty should come into force on 1 January 1993. Articles within the Treaty were referred to by using the letters A to S. Annexed to the Treaty is a Protocol, and an Agreement, on Social Policy. With a view to ensuring that the dynamic of the European single market respect certain minimum social and employment protections, these allow
SECTION 10
#17327834857931560-399: A presumption that action will be taken at European level only where national efforts cannot achieve the objective in question. Sceptics note that the Treaty offers no legally actionable definition of subsidiarity. Rather there are "a series of tentative indications for Community action in a document full of imprecise concepts: 'sufficiently', 'better achieved', 'what is necessary', 'to achieve
1690-467: A series of EU treaty ratification crises. Having "resolved to continue the process of creating an ever closer union among the people of Europe", the Treaty proposes "further steps to be taken in order to advance European integration" under seven titles. Title I, Common Provisions, establishes the European Union (EU) on the foundation of the three, already partially merged, European Communities:
1820-551: A token of the government's commitment to control inflation (then running at three times the rate of Germany). From the beginning of 1990, high German interest rates, set by the Bundesbank to counteract inflationary impact of the expenditure on German reunification , caused significant stress across the whole of the ERM. By the time of their own ratifications debates, France and Denmark also found themselves under pressure in foreign exchange markets, their currencies trading close to
1950-653: The Community budget had been correctly spent by the Community's institutions. The ECA provided an audit report for each financial year to the Council and Parliament and gave opinions and proposals on financial legislation and anti-fraud actions. It is the only institution not mentioned in the original treaties, having been set up in 1975. At the time of its abolition, the European Community pillar covered
2080-461: The Deutsche Mark and adopt a common currency. Without consulting Karl Otto Pöhl , President of the Bundesbank , Kohl accepted the deal. Despite this win for France, it was widely perceived that the cost of German cooperation was German dictation of the rules for a single currency. The Bundesbank had signalled that Germany's economic success would come before being "a good european". In
2210-612: The European Atomic Energy Community (EURATOM) as one of the European Communities under the 1965 Merger Treaty (Treaty of Brussels). In 1993 a complete single market was achieved, known as the internal market , which allowed for the free movement of goods, capital, services, and people within the EEC. In 1994 the internal market was formalised by the EEA agreement. This agreement also extended
2340-656: The European Communities (EC), which were founded in the 1950s in the spirit of the Schuman Declaration . Maastricht Treaty The Treaty on European Union , commonly known as the Maastricht Treaty , is the foundation treaty of the European Union (EU). Concluded in 1992 between the then-twelve member states of the European Communities , it announced "a new stage in the process of European integration " chiefly in provisions for
2470-598: The European Community , continuing to follow the supranational structure of the EEC. The EEC institutions became those of the EU, however the Court, Parliament and Commission had only limited input in the new pillars, as they worked on a more intergovernmental system than the European Communities. This was reflected in the names of the institutions, the council was formally the "Council of the European Union " while
2600-545: The European Economic Community (EEC), the European Coal and Steel Community (ECSC) and the European Atomic Energy Community (Euratom). It confirms among its objectives are "the introduction of a citizenship of the Union" common to the nationals of the Member States; "economic and monetary union, ultimately including a single currency"; and "a common foreign and security policy including the eventual framing of
2730-558: The European Free Trade Association ). The six were France, West Germany, Italy and the three Benelux countries: Belgium, the Netherlands and Luxembourg. The first enlargement was in 1973, with the accession of Denmark, Ireland and the United Kingdom. Greece, Spain and Portugal joined in the 1980s. The former East Germany became part of the EEC upon German reunification in 1990. Following the creation of
SECTION 20
#17327834857932860-517: The European Parliament "co-legislator with the Council of Ministers" and have since been developed and extended to nearly all areas where the Council decides on legislation by qualified majority voting. The "foundations of co-decision in the Maastricht Treaty" have led to ways to reconcile differences between the Parliament and the Council, formally through a "conciliation procedure" and informally through "trialogues" involving negotiations between
2990-451: 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, French President 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 20 September 1976
3120-677: The Institutions of the ECSC in that the Common Assembly and Court of Justice of the ECSC had their authority extended to the EEC and Euratom in the same role. However the EEC, and Euratom, had different executive bodies to the ECSC. In place of the ECSC's Council of Ministers was the Council of the European Economic Community , and in place of the High Authority was the Commission of the European Communities . There
3250-724: The Intergovernmental Conference on the Common Market and Euratom at the Val Duchesse conference centre, which prepared for the Treaty of Rome in 1957. The conference led to the signature, on 25 March 1957, of the Treaty of Rome establishing a European Economic Community. The resulting communities were the European Economic Community (EEC) and the European Atomic Energy Community (EURATOM or sometimes EAEC). These were markedly less supranational than
3380-671: The Messina Conference in 1955, Paul-Henri Spaak was given the task to prepare a report on the idea of a customs union . The so-called Spaak Report of the Spaak Committee formed the cornerstone of the intergovernmental negotiations at Val Duchesse conference centre in 1956. Together with the Ohlin Report the Spaak Report would provide the basis for the Treaty of Rome . In 1956, Paul-Henri Spaak led
3510-630: The Pound sterling ). The signatory nations were represented by: In consequence of the Dutch Presidency of the Council of the European Communities during the previous six months of negotiation, the Treaty was signed in the Netherlands , in the city of Maastricht . The twelve members of the European Communities signing the Treaty on 7 February 1992 were Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, Portugal, Spain,
3640-633: The eurozone , and hence left ERM II: Slovenia (1 January 2007), Cyprus (1 January 2008), Malta (1 January 2008), Slovakia (1 January 2009), Estonia (1 January 2011), Latvia (1 January 2014), Lithuania (1 January 2015), and Croatia (1 January 2023). As of January 2023, two currencies participate in ERM II: the Danish krone and the Bulgarian lev . The currencies of Sweden (the Swedish krona ),
3770-515: The franc . Since then, Mitterrand had been committed to drawing Germany into a currency partnership. After the fall of the Berlin Wall in late 1989, Germany sought re-unification. France, the UK, and the rest of Europe expressed their concerns over re-unification. When German Chancellor Helmut Kohl asked for re-unification in 1990, Mitterrand would only accept in the event Germany would abandon
3900-588: The treaties . It was designed to be independent, representing the interest of the Community as a whole. Every member state submitted one commissioner (two from each of the larger states, one from the smaller states). One of its members was the President , appointed by the council, who chaired the body and represented it. Under the Community, the European Parliament (formerly the European Parliamentary Assembly) had an advisory role to
4030-456: The "Maastricht criteria" – for the currency union . Against the background of the end of the Cold War and the re-unification of Germany , and in anticipation of accelerated globalisation , the treaty negotiated tensions between member states seeking deeper integration and those wishing to retain greater national control. The resulting compromise faced what was to be the first in
European Exchange Rate Mechanism - Misplaced Pages Continue
4160-415: The 1960s the council also began to meet informally at the level of heads of government and heads of state; these European summits followed the same presidency system and secretariat as the council but was not a formal formation of it. The Commission of the European Communities was the executive arm of the community, drafting Community law , dealing with the day to running of the Community and upholding
4290-516: The Colonels . A year later, in February 1962, Spain attempted to join the European Community. However, because Francoist Spain was not a democracy, all members rejected the request in 1964. The four countries resubmitted their applications on 11 May 1967 and with Georges Pompidou succeeding Charles de Gaulle as French president in 1969, the veto was lifted. Negotiations began in 1970 under
4420-538: The Community and began the longest application process for any country. With the prospect of further enlargement, and a desire to increase areas of co-operation, the Single European Act was signed by the foreign ministers on 17 and 28 February 1986 in Luxembourg and The Hague respectively. In a single document it dealt with reform of institutions, extension of powers, foreign policy cooperation and
4550-651: The Community. Prior to 2004, the larger members (France, Germany, Italy and the United Kingdom) have had two Commissioners. In the European Parliament , members are allocated a set number seats related to their population, however these ( since 1979 ) have been directly elected and they sit according to political allegiance, not national origin. Most other institutions, including the European Court of Justice , have some form of national division of its members. There were three political institutions which held
4680-641: The Conservative Party over European integration and the ruling party' ultimate fragmentation in 2016 into Leave and Remain factions). In Germany, the Maastricht Treaty passed the Bundestag on December 2, 1992, with a majority of 543 out of 562, and the Bundesrat with unanimity. The Bundestag was required to amend the Grundgesetz (German Basic Law) to “legalize Germany’s membership in
4810-458: The Council agreed part of the necessary instruments for election, deferring details on electoral systems which remain varied to this day. During the tenure of President Jenkins , in June 1979, the elections were held in all the then-members (see 1979 European Parliament election ). The new Parliament, galvanised by direct election and new powers, started working full-time and became more active than
4940-409: The Council and Commission. There were a number of Community legislative procedures , at first there was only the consultation procedure , which meant Parliament had to be consulted, although it was often ignored. The Single European Act gave Parliament more power, with the assent procedure giving it a right to veto proposals and the cooperation procedure giving it equal power with the Council if
5070-545: The Council of Ministers to approve relevant proposals from the European Commission on the basis of a qualified majority rather than unanimous consent. The United Kingdom was not a party of the Agreement on Social Policy and secured an "opt out" from the protocol. It was to do the same with respect to the obligation to enter the final, single-currency, stage of monetary union (the UK would not have to give up
5200-467: The Council on Community matters. This replaced the informal parliamentary blocking powers established by the 1979 Isoglucose decision. It also abolished any existing state like Simple Majority voting in the EEC, replacing it with Qualified Majority Voting , a procedure more commonly used in international organisations. The Treaty of Amsterdam transferred responsibility for free movement of persons (e.g., visas , illegal immigration , asylum ) from
5330-449: The EC, were collectively made to constitute the first of the three pillars of the European Union , which the treaty also founded. The EC existed in this form until it was abolished by the 2009 Treaty of Lisbon , which incorporated the EC's institutions into the EU's wider framework and provided that the EU would "replace and succeed the European Community". In April 1951, the Treaty of Paris
European Exchange Rate Mechanism - Misplaced Pages Continue
5460-451: The ECB, nor a national central bank, nor any member of their decision-making bodies, shall seek or take instructions from Community institutions or bodies from any Government of a Member State or from any other body." Seeming to further preclude any possibility of the single-currency banking system being used to regulate European financial markets in support of potentially inflationary policies,
5590-694: The ECB, since Sweden has no opt-out like Denmark. EU members are required to join the ERM by the Maastricht convergence criteria . In theory, most of the currencies are allowed to fluctuate as much as 15% from their assigned value. In practice, however, the currency of Denmark deviates very little. The former members of ERM II are the Greek drachma , Slovenian tolar , Cypriot pound , Estonian kroon , Maltese lira , Slovak koruna , Latvian lats , Lithuanian litas , and Croatian kuna . European Economic Community The European Economic Community ( EEC )
5720-435: The ECSC and Euratom were merged with that of the EEC, creating a single institutional structure governing the three separate Communities. From here on, the term European Communities were used for the institutions (for example, from Commission of the European Economic Community to the Commission of the European Communities ). The Council of the European Communities was a body holding legislative and executive powers and
5850-681: The ERM II on 28 June 2004; the Cypriot pound , the Latvian lats and the Maltese lira on 2 May 2005; the Slovak koruna on 28 November 2005. On 10 July 2020 it was announced that the Bulgarian lev (which had joined the EU on 1 January 2007) and Croatian kuna (which had joined the EU on 1 July 2013) would be included in the ERM II. These states (with the exception of Bulgaria) have all since joined
5980-568: The ERM in October 1990, but was forced to exit the programme within two years after sterling came under major pressure from currency speculators . The ensuing crash of 16 September 1992 was subsequently dubbed " Black Wednesday ". There was some revision of attitude towards this event given the UK's strong economic performance after 1992, with some commentators dubbing it "White Wednesday". Some commentators, following Norman Tebbit , took to referring to ERM as an "Eternal Recession Mechanism", after
6110-522: The ERM was also blamed for prolonging the recession at the time, and Britain's exit from the ERM was seen as an economic failure which contributed significantly to the defeat of the Conservative government of John Major at the general election in May 1997, despite the strong economic recovery and significant fall in unemployment which that government had overseen after Black Wednesday. In August 1993,
6240-491: The EU in 1993, it has enlarged to include an additional sixteen countries by 2013. Member states are represented in some form in each institution. The Council is also composed of one national minister who represents their national government. Each state also has a right to one European Commissioner each, although in the European Commission they are not supposed to represent their national interest but that of
6370-417: The EU. This made the Union the formal successor institution of the Community. The Community's initial aim was to bring about economic integration, including a common market and customs union , among its six founding members : Belgium , France , Italy , Luxembourg , the Netherlands and West Germany . It gained a common set of institutions along with the European Coal and Steel Community (ECSC) and
6500-471: The European Parliament, Council and Commission, which have become standard in most legislative procedures. In establishing the European Union the Maastricht Treaty amended the treaties that had established the European Communities in the 1950s. Following the EU accessions of Austria, Finland, and Sweden, it was in turn amended by the treaties of Amsterdam (1997), and Nice (2001). Following
6630-553: The European Union (Article 23) as well as to install a European Monetary Union (Article 88).” The ratification was delayed by challenges at the German Federal Constitutional Court , the complainants claiming the amendments transferring sovereign competencies to the European Union violated democratic principles (Article 20 and 38(1)) of the Grundgesetz that were unamendable (Article 79(3)); hence
SECTION 50
#17327834857936760-449: The Eurozone – higher debts which, ultimately, have no relationship to higher growth. The Maastricht criteria, he insisted, were correct in placing the onus for growth on "competitiveness, structural reforms, investment, and sustainable financing". Set alongside the European Community, the cooperation proposed in the Maastricht Treaty on foreign and security policy, and on justice and home affairs, were characterised in official commentary as
6890-479: The Exchequer Denis Healey reportedly chose not to join the ERM in 1979 owing to concerns that it would benefit the German economy by preventing the Deutsche Mark from appreciating, at the expense of the economies of other countries. The UK did join the ERM in October 1990 under Chancellor John Major , in a move which at the time was largely supported by business and the press, but was forced to leave again two years later on Black Wednesday . The chart below provides
7020-411: The German Bundesbank ". Whereas the Bundesbank, under article 12 of its constitution, is "bound to support the general economic policy of the [German] Federal Government", the obligation of the ECB to "support the general economic policies in the Community" is to be "without prejudice" to price stability, the Bank's "primary objective". It is further conditioned by the express understanding that "neither
7150-435: The Justice and Home Affairs (JHA) pillar to the European Community (JHA was renamed Police and Judicial Co-operation in Criminal Matters (PJCC) as a result). Both Amsterdam and the Treaty of Nice also extended codecision procedure to nearly all policy areas, giving Parliament equal power to the Council in the Community. In 2002, the Treaty of Paris which established the ECSC expired, having reached its 50-year limit (as
7280-434: The Maastricht Treaty in 1993, these institutions became those of the European Union, though limited in some areas due to the pillar structure. Despite this, Parliament in particular has gained more power over legislation and security of the commission. The Court of Justice was the highest authority in the law, settling legal disputes in the Community, while the Auditors had no power but to investigate. The EEC inherited some of
7410-401: The Maastricht Treaty opened up "debates about whether this strengthened the states, regions or local government vis-à-vis the EU or vice versa". Subsidiarity can be read as a federalising principle. For every endeavour it poses the question of whether national or Community policy is the most effective means, and elevates simple utility above any deference to national or local feeling, albeit with
7540-403: The Maastricht Treaty should be inadmissible. The court delivered its judgment on October 12, 1993 ruling the Maastricht Treaty compatible with the Grundgesetz, but provided that the European Union could not endow itself with more powers without the Bundestag’s approval. The court also confirmed its Solange II decision accepting the supremacy of European Court of Justice decisions while retaining
7670-441: The Netherlands and the United Kingdom. The Treaty noted that it should be "ratified by the High Contracting Parties in accordance with their respective constitutional requirement". In the cases of Denmark, France and Ireland this required referendums. In the first Danish referendum , on 2 June 1992, the treaty was rejected by a margin of 50.7% to 49.3%. Concessions secured by the end of year in Edinburgh including, critically,
7800-421: The TEC as the Treaty on the Functioning of the European Union (TFEU). Since the end of World War II , sovereign European countries have entered into treaties and thereby co-operated and harmonised policies (or pooled sovereignty ) in an increasing number of areas, in the European integration project or the construction of Europe ( French : la construction européenne ). The following timeline outlines
7930-409: The Treaty expressly prohibits the ECB or any Member State central extending "overdraft facilities or any other type of credit facility" to "Community institutions or bodies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States", or the purchase from them debt instruments. Critics felt that, in limiting the role of
SECTION 60
#17327834857938060-414: The UK fell into recession in 1990. The UK spent over £6 billion trying to keep the currency within the narrow limits with reports at the time widely noting that the controversial Hungarian-American investor George Soros 's individual profit of £1 billion equated to over £12 for each man, woman and child in Britain and dubbing Soros "the man who broke the Bank of England". Britain's membership of
8190-401: The UK, the Maastricht rebellion drew on the experience of Black Wednesday . On 16 September 1992 the British government had been forced to withdraw the pound sterling from the European Exchange Rate Mechanism (ERM), after a failed and costly attempt to keep the pound above its mandated exchange rate limit. Sterling 's exit from the ERM was the defining failure of John Major's government;
8320-501: The Western and Eastern blocs, other than reconcile Member States such as France and Germany after WW2. The tasks entrusted to the Community were divided among an assembly, the European Parliament, Council, Commission, and Court of Justice. Moreover, restrictions to market were lifted to further liberate trade among Member States. Citizens of Member States (other than goods, services, and capital) were entitled to freedom of movement. The CAP, Common Agricultural Policy, regulated and subsided
8450-442: The accession of a further twelve states, ten from the former Eastern Bloc – Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia – plus Cyprus and Malta, and an aborted Treaty on a European Constitution , the Treaty on European Union and the Treaty Establishing the European Community (TEC) were more comprehensively revisited. The 2007 Treaty of Lisbon amends both again and renames
8580-416: The agricultural sphere. A European Social Fund was implemented in favour of employees who lost their jobs. A European Investment Bank was established to "facilitate the economic expansion of the Community by opening up fresh resources" (Art. 3 Treaty of Rome 3/25/1957). All these implementations included overseas territories. Competition was to be kept alive to make products cheaper for European consumers. For
8710-430: The bloc after the signing of the Maastricht Treaty in 1992 are obliged to adopt the euro under the terms of their accession treaties. However, the last of the five economic convergence criteria , which need to be complied with in order to qualify for euro adoption, is the exchange rate stability criterion. This requires having been a member of the ERM for a minimum of two years without the presence of "severe tensions" for
8840-454: The bottom of their ERM bands. Having "resolved to achieve the strengthening and the convergence and to establish an economic and monetary union including,... a single and stable currency", the Treaty ruled that "Member States shall regard their economic policies as a matter of common concern", and that the obligations assumed should be a matter for "mutual surveillance." Commonly known as the Maastricht criteria, these obligations represented
8970-451: The burden of adjustment upon wage-, and benefit-, dependent households. Greek finance minister Yanis Varoufakis credited the Maastricht criteria with framing of a union of deflation and unemployment. Taking issue in defence of the Maastricht criteria, German finance minister Wolfgang Schäuble argued that "the old way to stimulate growth will not work." There is a real "moral hazard" in allowing Member States to accumulate higher debts within
9100-474: The commission was formally the "Commission of the European Communities ". There are more competencies listed in Article 3 of the European Communities pillar than there are in Article 3 of the Treaty of Rome. This is due to the fact that some competencies were already inherent in the Treaty of Tome, some were referred to in the Treaty of Rome, and some were extended under Article 235 of the Treaty of Rome. Competencies were added to cover trans-European networks, and
9230-402: The community new powers beyond simple economic matters which had achieved a high level of integration. As it got closer to the goal of political integration and a peaceful and united Europe, what Mikhail Gorbachev described as a Common European Home . The 1960s saw the first attempts at enlargement . In 1961, Denmark , Ireland , the United Kingdom and Norway (in 1962), applied to join
9360-554: The concept of fixed currency exchange rate margins, but with exchange rates variable within those margins. This is also known as a semi-pegged system. Before the introduction of the euro, exchange rates were based on the European Currency Unit (ECU), the European unit of account, whose value was determined as a weighted average of the participating currencies. A grid (known as the Parity Grid) of bilateral rates
9490-400: The convergence criteria denied member states the resort to currency deflation to ease balance-of-payments constraints on domestic spending, and left labour market "flexibility" as the main mean of coping with asymmetric economic shocks. These constraints were to become the focus of political scrutiny and public protest in the new-century European debt crisis . Beginning in 2009 with Greece ,
9620-501: 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" whereby French representatives were withdrawn from the European institutions until the French veto was reinstated. Eventually, a compromise was reached with the Luxembourg compromise on 29 January 1966 whereby
9750-509: The council was not unanimous. In 1970 and 1975, the Budgetary treaties gave Parliament power over the Community budget . The Parliament's members, up-until 1980 were national MPs serving part-time in the Parliament. The Treaties of Rome had required elections to be held once the council had decided on a voting system, but this did not happen and elections were delayed until 1979 (see 1979 European Parliament election ). After that, Parliament
9880-446: The council, Parliament or another party place a request for legislation to the commission. The Commission then drafts this and presents it to the council for approval and the Parliament for an opinion (in some cases it had a veto, depending upon the legislative procedure in use). The commission's duty is to ensure it is implemented by dealing with the day-to-day running of the Union and taking others to Court if they fail to comply. After
10010-657: The currency exchange rate. To participate in the European Monetary System, Ireland chose to break the Irish pound 's parity with sterling in 1979, because the UK had decided not to participate. (The Irish Central Bank had maintained parity with sterling since the foundation of the state in 1922. "It was only in the 1970s, when high inflation in the UK threatened price stability in Ireland, that alternatives were seriously considered".) The United Kingdom entered
10140-418: The customs union, the treaty provided for a 10% reduction in custom duties and up to 20% of global import quotas. Progress on the customs union proceeded much faster than the twelve years planned. However, France faced some setbacks due to their war with Algeria . The six states that founded the EEC and the other two Communities were known as the " inner six " (the "outer seven" were those countries who formed
10270-438: The development of the Union", and asked it to help "elaborate and implement decisions and actions of the Union which have defence implications. Yet it is clear that nothing is to be construed as systematically constraining the foreign or defence policies of the individual Member States. "Failing a Council decision", which would require unanimity, a Member State is free to take such action as it considers "necessary". This, in part,
10400-401: The environment. In these and other areas which do not fall within Community's "exclusive competence", in accordance with "the principle of subsidiarity " action is to be taken only if, "by reason of the scale or effects", the objectives cannot be more "efficiently" achieved by the Member States themselves. In several of these areas, the Treaty seeks to enhance the "democratic functioning" of
10530-414: The establishment of a common (and later single) European market. In time, the tension between the transferred worker as "a mobile unit of production" contributing to the success of the single market, and the reality of the Community migrants as individuals, seeking to exercise "a personal right" to live and work in another state for their own, and their families', welfare, asserted itself. The Treaty built on
10660-496: The euro are expected to participate for at least two years in ERM II before joining the eurozone . On 1 May 2004, the ten national central banks (NCBs) of the new member countries became party to the ERM II Central Bank Agreement . The national currencies themselves were to become part of the ERM II at dates to be agreed. The Estonian kroon , Lithuanian litas , and Slovenian tolar were included in
10790-402: The euro had physically entered into circulation. The zone's next enlargements were with states that joined the EU in 2004 , and then joined the eurozone on 1 January in the mentioned year: Slovenia (2007), Cyprus (2008), Malta (2008), Slovakia (2009), Estonia (2011), Latvia (2014), Lithuania (2015). Croatia, which joined in the EU 2013, adopted the euro in 2023. All new EU members having joined
10920-401: The euro in 2001, the Danish krone was left at that time as the only participant member. A currency in ERM II is allowed to float within a range of ±15% with respect to a central rate against the euro. In the case of the krone, Danmarks Nationalbank keeps the exchange rate within the narrower range of ± 2.25% against the central rate of EUR 1 = DKK 7.46038. EU countries that have not adopted
11050-402: The euro, policy changed to linking currencies of EU countries outside the eurozone to the euro (having the common currency as a central point). The goal was to improve the stability of those currencies, as well as to gain an evaluation mechanism for potential eurozone members. As of March 2024, two currencies participate in ERM II: the Danish krone and the Bulgarian lev . The ERM is based on
11180-463: The executive and legislative power of the EEC, plus one judicial institution and a fifth body created in 1975. These institutions (except for the auditors) were created in 1957 by the EEC but from 1967 onwards they applied to all three Communities. The Council represents the member state governments, the Parliament represents citizens and the Commission represents the European interest. Essentially,
11310-475: The first important accomplishments of the EEC was the establishment (1962) of common price levels for agricultural products. In 1968, internal tariffs (tariffs on trade between member nations) were removed on certain products. Another crisis was triggered in regard to proposals for the financing of the Common Agricultural Policy , which came into force in 1962. The transitional period whereby decisions were made by unanimity had come to an end, and majority-voting in
11440-435: The first treaty, it was the only one with a limit). No attempt was made to renew its mandate; instead, the Treaty of Nice transferred certain of its elements to the Treaty of Rome and hence its work continued as part of the EC area of the European Community's remit. After the entry into force of the Treaty of Lisbon in 2009 the pillar structure ceased to exist. The European Community, together with its legal personality ,
11570-524: The following areas; Since the end of World War II , sovereign European countries have entered into treaties and thereby co-operated and harmonised policies (or pooled sovereignty ) in an increasing number of areas, in the European integration project or the construction of Europe ( French : la construction européenne ). The following timeline outlines the legal inception of the European Union (EU)—the principal framework for this unification. The EU inherited many of its present responsibilities from
11700-654: The future ECB and euro in national, or Union-coordinated, reflationary policies, Maastricht affirmed what by the late 1980s was the general economic-policy orthodoxy within the Community. This has been described as a "reversed Keynesianism ": macro-economic policy not to secure a full-employment level of demand, but, through the restrictive control of monetary growth and public expenditure, to maintain price and financial market stability; micro economic policy, not to engineer income and price controls in support of fiscal expansion, but to encourage job creation by reducing barriers to lower labour costs. The commitment to monetary union and
11830-475: The governments of several Euro-zone countries (Portugal, Ireland, Spain and Cyprus ) declared themselves unable to repay or refinance their government debt or to bail out over-indebted banks without assistance from third parties. The " austerity " they had subsequently to impose as a condition of assistance from Germany and other of their trade-surplus EU partners, raised calls for new arrangements to better manage payment imbalances between member states, and ease
11960-506: The growing suggestion that there was a Community-wide basis for citizenship rights. The Treaty rules that "every person holding the nationality of a Member State shall be a citizen of the Union". This common and parallel citizenship accords the Member State migrants not only the civil right to take up residence and employment, but also, and for the first time, political rights. In a new EU country of residence Member-State nationals have
12090-438: The institutions by conceding the directly elected European Parliament rights not only of consultation but also of co-decision on some categories of European legislation. It also grants the Parliament the power to confirm (and therefore to veto) the Council's nominations for the European Commission , the Community's executive. Titles III and IV amend the treaties establishing the ECSC and Euratom to complete their absorption into
12220-453: The integration process. It was mentioned in the treaties for the first time in the Single European Act (see below). Greece re-applied to join the community on 12 June 1975, following the restoration of democracy, and joined on 1 January 1981. Following on from Greece, and after their own democratic restoration, Spain and Portugal applied to the communities in 1977 and joined on 1 January 1986. In 1987, Turkey formally applied to join
12350-474: The internal market to include most of the member states of the European Free Trade Association , forming the European Economic Area , which encompasses 15 countries. Upon the entry into force of the Maastricht Treaty in 1993, the EEC was renamed the European Community to reflect that it covered a wider range than economic policy. This was also when the three European Communities, including
12480-565: The margin was expanded to 15% to accommodate speculation against the French franc and other currencies. On 31 December 1998, the European Currency Unit (ECU) exchange rates of the eurozone countries were frozen and the value of the euro, which then superseded the ECU at par, was thus established. In 1999, ERM II replaced the original ERM. The Greek and Danish currencies were part of the new mechanism, but when Greece joined
12610-427: The modern Community) was to create a customs union while Euratom would promote co-operation in the nuclear power sphere. The EEC rapidly became the most important of these and expanded its activities. The first move towards political developments came at the end of 1959 when the foreign ministers of the six members announced that would be meeting quarterly to discuss political issues and international problems. One of
12740-477: The national central banks, but to include the prospective currency-issuing European Central Bank . As envisaged by the Treaty, the ECB replaced its shadow European Monetary Institute on 1 June 1998, and began exercising its full powers with the introduction of the euro on 1 January 1999. The Treaty dedicates the EU central banking system to price stability, and gives it "a degree of independence from elected officials" greater even "than that of its putative model,
12870-491: The national currency within "the normal fluctuation margins by the exchange-rate mechanism of the European Monetary System without severe tensions for at least the last two years"; and 4. nominal long-term interest rates no more than 2 percentage points higher than in the three Member States with the lowest inflation. These criteria in turn dictated the mandate of the European System of Central Banks comprising
13000-444: The objectives', subjective notions which leave the way wide open for interpretation or practical developments." Jacques Santer, Prime Minister of Luxembourg, conceded that consensus around the principle of subsidiarity had been possible only because "it conceals different interpretations". The 1992 Treaty may have introduced a more consequential constitutional principle in its promotion "co-decision". It introduced procedures that made
13130-415: The obligations are to maintain: 1. Inflation at a rate no more than 1.5 percentage points higher than the average of the three best performing (lowest inflation) Member States; 2. a "budgetary position" that avoids "excessive" government deficits defined in ratios to gross domestic product (GDP) of greater than 3% for annual deficits and 60% for gross government debt ; 3. the exchange rate of
13260-520: The performance thresholds for member states to progress toward the third stage of European Economic and Monetary Union (EMU), the adoption the common currency (designated at the 1995 Madrid European as the Euro ). The four "convergence criteria", as detailed in attached protocols, impose control over inflation, public debt and the public deficit, exchange rate stability and domestic interest rates. With limited leeway granted in exceptional circumstances,
13390-570: The plural European Communities , in spite of the latter designation covering all the three constituent entities of the first pillar. The EEC was also known as the European Common Market (ECM) in the English-speaking countries, and sometimes referred to as the European Community even before it was officially renamed as such in 1993. In 2009, the EC formally ceased to exist and its institutions were directly absorbed by
13520-522: The power to review secondary community law as to guarantee basic rights protection in close cooperation with the European Court of Justice. Germany was the last member state to ratify the treaty and it entered into force on November 1, 1993. From the establishment of the European Economic Community in 1957, integrationists argued the free movement of workers was the logical corollary of the free movement of capital, goods and services and integral to
13650-428: The previous assemblies. Shortly after its election, the Parliament proposed that the Community adopt the flag of Europe design used by the Council of Europe . The European Council in 1984 appointed an ad hoc committee for this purpose. The European Council in 1985 largely followed the committee's recommendations, but as the adoption of a flag was strongly reminiscent of a national flag representing statehood ,
13780-570: The previous communities, due to protests from some countries that their sovereignty was being infringed (however there would still be concerns with the behaviour of the Hallstein Commission ). Germany became a founding member of the EEC, and Konrad Adenauer was made leader in a very short time. The first formal meeting of the Hallstein Commission was held on 16 January 1958 at the Chateau de Val-Duchesse . The EEC (direct ancestor of
13910-465: The price-stability-first criteria for adoption of the single currency and for the operations of the prospective European Central Bank (ECB). Other amendments create the office of European Ombudsman , expand the Structural Fund assistance to the poorer EU regions; and broaden Community competencies in education, culture, public health, consumer protection, trans-European networks, industry and
14040-530: The pro-European UK government of Edward Heath , who had to deal with disagreements relating to the Common Agricultural Policy and the UK's relationship with the Commonwealth of Nations . Nevertheless, two years later the accession treaties were signed so that Denmark, Ireland and the UK joined the Community effective 1 January 1973. The Norwegian people had rejected membership in a referendum on 25 September 1972 . The Treaties of Rome had stated that
14170-434: The right to vote, and to stand, in both local and European elections. Unresolved in the Treaty is the question of their access to social rights. Political debate continued as to who should have access to public services and welfare systems funded by taxation. French President François Mitterrand was forced to abandon the centrepiece of his Socialist programme in 1983, a job creating reflation , due to speculation against
14300-560: The same exemption secured by Britain from the single currency (Denmark would not have to give up the krone ), allowed for a second referendum . On 18 May 1993, the Maastricht Treaty was endorsed by a vote of 56.7%. In Ireland, the Eleventh Amendment of the Constitution , allowing the state to ratify the Treaty, was approved in a referendum held on 18 June 1992 with the support of 69.1% of votes cast. In September 1992,
14430-453: The second and third "pillars" of the Union. The Treaty, however, proposed no significant departures in these areas. Coordination in foreign and security policy had taken place since the beginning of the 1970s under the name of European Political Cooperation (EPC), which had been first written into the treaties by the 1987 Single European Act . Cooperation on law enforcement, criminal justice , asylum, and immigration and other judicial matters
14560-527: The single market. It came into force on 1 July 1987. The act was followed by work on what would be the Maastricht Treaty , which was agreed on 10 December 1991, signed the following year and coming into force on 1 November 1993 establishing the European Union, and paving the way for the European Monetary Union . The EU absorbed the European Communities as one of its three pillars . The EEC's areas of activities were enlarged and were renamed
14690-424: The structure of European Community. Title V and VI extend existing intergovernmental consultations on foreign-policy, security and defence matters, and on "cooperation in the fields of justice and home affairs". In both cases, Member States are to "inform and consult one another within the Council [of Ministers] ", but otherwise cooperate independently of Community institutions. Title VII, Final Provisions, covers
14820-462: 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. Greece became the first country to join the EC in 1961 as an associate member, however its membership was suspended in 1967 after a coup d'état established a military dictatorship called the Regime of
14950-616: The three largest countries which joined the European Union on 1 May 2004 (the Polish złoty , the Czech koruna , and the Hungarian forint ), and Romania which joined on 1 January 2007 (the Romanian leu ), are required to join in accordance with the terms of the applicable treaties of accession. Sweden has voted in a referendum to stay out of the mechanism, despite being expected to join by
15080-419: The topic. For example, if agriculture was being discussed, the council would be composed of each national minister for agriculture. They represented their governments and were accountable to their national political systems. Votes were taken either by majority (with votes allocated according to population) or unanimity. In these various forms they share some legislative and budgetary power of the Parliament. Since
15210-539: The treaty for the latter was being drawn up by the Common Assembly , the ECSC parliamentary chamber, the proposed defence 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. Following
15340-550: The work of the Culture Committee and Education Committee that were previously sharing existing competencies. The only entry in Article 3 that represented something new is the competence covering the entry and movement of persons in the internal market. However, after the Treaty of Maastricht, Parliament gained a more formal role. Maastricht brought in the codecision procedure , which gave it equal legislative power with
15470-409: Was a regional organisation created by the Treaty of Rome of 1957, aiming to foster economic integration among its member states. It was subsequently renamed the European Community ( EC ) upon becoming integrated into the first pillar of the newly formed European Union (EU) in 1993. In the popular language, the singular European Community was sometimes inaccurately used in the wider sense of
15600-600: Was a concession to United Kingdom which continued to insist on the sufficiency of the North Atlantic alliance (supported by the non-aligned Member States, Ireland and Austria , at the 1997 Amsterdam summit, the UK prevented a merger of the WEU and the EU), As an implicit presumption subsidiarity may have been considered a check upon the supranational development of the EEC. But in making it an explicit constitutional principle
15730-523: Was absorbed into the newly consolidated European Union which merged in the other two pillars (however Euratom remained distinct). This was originally proposed under the European Constitution but that treaty failed ratification in 2005. The main aim of the EEC, as stated in its preamble, was to "preserve peace and liberty and to lay the foundations of an ever closer union among the peoples of Europe". Calling for balanced economic growth, this
15860-461: Was being pursued under the 1990 Schengen Agreement and Convention. The new provisions called on governments to "inform and consult one another within the Council of Ministers", but otherwise continued cooperation on the basis of intergovernmental liaison outside of the EC and its institutions. The West European Union , an until recently moribund club within NATO , is described as "an integral part of
15990-707: Was calculated on the basis of these central rates expressed in ECUs, and currency fluctuations had to be contained within a margin of 2.25% on either side of the bilateral rates (with the exception of the Italian lira , the Spanish peseta , the Portuguese escudo and Pound sterling , which were allowed to fluctuate by ±6%). Determined intervention and loan arrangements protected the participating currencies from greater exchange rate fluctuations. United Kingdom Chancellor of
16120-464: Was composed of one judge per state with a president elected from among them. Its role was to ensure that Community law was applied in the same way across all states and to settle legal disputes between institutions or states. It became a powerful institution as Community law overrides national law. The fifth institution is the European Court of Auditors . Its ensured that taxpayer funds from
16250-404: Was controversial, the "flag of Europe" design was adopted only with the status of a "logo" or "emblem". The European Council, or European summit, had developed since the 1960s as an informal meeting of the Council at the level of heads of state. It had originated from then- French President Charles de Gaulle 's resentment at the domination of supranational institutions (e.g. the commission) over
16380-526: Was elected every five years. In the following 20 years, it gradually won co-decision powers with the Council over the adoption of legislation, the right to approve or reject the appointment of the Commission President and the commission as a whole, and the right to approve or reject international agreements entered into by the Community. The Court of Justice of the European Communities was the highest court of on matters of Community law and
16510-399: Was greater difference between these than name: the French government of the day had grown suspicious of the supranational power of the High Authority and sought to curb its powers in favour of the intergovernmental style Council. Hence the council had a greater executive role in the running of the EEC than was the situation in the ECSC. By virtue of the Merger Treaty in 1967, the executives of
16640-411: Was signed, creating the European Coal and Steel Community (ECSC). This was an international community based on supranationalism and international law, designed to help the economy of Europe and prevent future war by integrating its members . With the aim of creating a federal Europe two further communities were proposed: a European Defence Community and a European Political Community . While
16770-476: Was thus the main decision-making body of the Community. Its Presidency rotated between the member states every six months and it is related to the European Council , which was an informal gathering of national leaders (started in 1961) on the same basis as the council. The council was composed of one national minister from each member state. However the Council met in various forms depending upon
16900-664: Was to be accomplished through: Citing Article 2 from the original text of the Treaty of Rome of the 25th of March 1957, the EEC aimed at "a harmonious development of economic activities, a continuous and balanced expansion, an increase in stability, an accelerated raising of the standard of living and closer relations between the States belonging to it". Given the fear of the Cold War, many Western Europeans were afraid that poverty would make "the population vulnerable to communist propaganda" (Meurs 2018, p. 68), meaning that increasing prosperity would be beneficial to harmonise power between
#792207