Comprehensive Study Guide on European Integration and the European Union

Theories of Integration and the Obsolescence of the Nation-State

• The Influence of Transformational Theories: Integration is heavily influenced by transformational theories, which suggest that nation-states are becoming increasingly obsolete in the modern world. The idea is that mankind will eventually transition away from the traditional state model.

• Shifting Sovereignty: There is a observed gradual shifting of sovereignty upward from individual states to larger regional structures. This occurs as people are absorbed into larger entities.

• The Role of Global Organizations: Because global entities like the UN have not been an absolute success, proponents of integration argue that states should voluntarily and gradually surrender parts of their sovereignty for the common good. This movement involves adopting commonly decided trade and foreign policies.

Functionalism and the Mechanism of Spillover

• Definition of Functionalism: Functionalism refers to the growth of technical organizations that cross national boundaries. It is defined as a process where technical and economic cooperation comes before political unity.

• The Spillover Process: This is the core mechanism of integration. The hope is to first achieve economic integration (functionalism). Once people become accustomed to cooperation on a functional level, they develop trust, which "spills over" into the higher level of political integration.

• Integration Progression: Technical/Economic cooperation $\rightarrow$ Increased trust $\rightarrow$ Higher-level political integration.

Global Disintegration Trends vs. Regional Integration

• The Paradox of Disintegration: While some regions integrate, many others are disintegrating into smaller parts.

  • Former Soviet Union (FSU): Often joked about as being Florida State University, the FSU disintegrated into multiple independent parts.

  • Eastern Europe: Czechoslovakia disintegrated into Czechia and Slovakia. (Note: The transcript mentions Slovenia in this context as well).

  • Africa: Somalia and Sudan have split; specifically, Sudan split to form South Sudan.

• Regional Integration Bases: Various attempts at integration exist globally, often on a regional basis:

  • NAFTA: Founded with the potential to expand into a SAFTA (South American Free Trade Organization).

  • ASEAN: The Association of Southeast Asian Nations.

  • Pacific Forum: For the smaller nations in Oceania.

  • European Union: Currently considered the region with the best chance for genuine, deep integration.

• Factors for European Success:

  • Common histórico background among members.

  • Reasonably well-developed economies.

  • Relatively stable state systems (e.g., despite concerns over French leadership changes, the underlying system remains stable).

The Founding Fathers and Early Economic Cooperation

• Historical Context: For centuries, Europe was defined by disunity and disharmony. Following the devastation of World War I and the even greater catastrophe of World War II, there was a sense that "if we don't work these things out, there's gonna be nothing left to us."

• Jean Monet and Robert Schumann: Two French statesmen who championed the idea of saving Europe from future wars through economic linkages (functionalism).

  • Jean Monet: Seen in portraits as pleasant and happy.

  • Robert Schumann: In portraits, looking stern. He served as the French Prime Minister in $1950$.

• European Coal and Steel Community (ECSC): Proposed by Schumann in $1950$ to coordinate the French and German steel industries.

  • Alsace and Lorraine: These regions are right near each other and have a blended Franco-German background/language.

  • Engineer-Led Integration: The idea was to have engineers rather than politicians run the coordination to focus on the greater economic good and avoid political squabbles over territories like the Saarland.

• Initial Membership: The ECSC took $2$ years to form. It consisted of $6$ states: France, Germany, Italy, and the Benelux countries.

  • Benelux Countries: Belgium, Netherlands, and Luxembourg. These small nations joined because they could not compete with giants like Germany or France on their own.

• The British Absence: Britain did not join initially. Reasons include the English Channel acting as a barrier and a geopolitical pull toward the Atlantic (Canada and the United States).

The Treaty of Rome and Expansion

• Treaty of Rome ($1956$/$1957$): Agreement reached in $1956$ and put into practice on $01/01/1957$. It founded the European Economic Community (EEC), also known as the Common Market or the EC.

• The Customs Union: The EEC functioned as a customs union with a unified set of tariffs.

• Timeline of Expansion:

  • $1973$: Britain, Ireland, and Denmark join, bringing the count to $9$ members. Note: De Gaulle's France had vetoed Britain's earlier applications in $1963$ and $1967$ due to a dislike of the "Anglo-Saxons."

  • $1981$: Greece is admitted.

  • $1986$: Portugal and Spain join.

• The "PIGS" and Expansion to $15$:

  • PIGS: An acronym for the "Poor Four": Portugal, Ireland, Greece, and Spain. These were economically poorer than France, Germany, and Britain.

  • Further Growth: Finland, Sweden, and Austria later joined. These were well-developed economies, not part of the "PIGS" group. Membership reached $15$.

  • The Flag: Discussion regarding the flag having $12$ stars representing the original members rather than expanding the star count for every new member.

The Single European Act ($1985$) and the $1992$ Market

• Purpose: Passed in $1985$, the Single European Act aimed to establish a true common market in Europe by the end of $1992$.

• Necessity for Delay: The delay from $1985$ to $1992$ was required because approximately $300$ specific measures needed to be addressed and negotiated before the market could be fully unified.

• Goal: Achieving this would make Europe the single largest trading market in the world.

• The Truck Driver Example: In $1988$, a truck driver in Western Europe might need as many as $27$ documents to cross from one country to another. After the Act, only a driver's license would be required, benefiting commerce, companies, and consumers.

The Maastricht Treaty ($1991$) and the Birth of the EU

• Signing in Maastricht: Held in the Dutch city of Maastricht in December $1991$. The city is located at the border of Germany, the Netherlands, and France. It is noted for its German Gothic architecture that escaped World War II bombing.

• Formal Renaming: At the Maastricht Treaty, the EC was formally renamed the European Union ($EU$). The "birthday" of the EU is identified with this treaty.

• Timeline and Objectives: The treaty established a plan to begin a single market on $01/01/1993$ and laid the groundwork for further economic integration and eventual political assimilation.

• Significance: It was the most significant step toward integration since the Treaty of Rome.

Post-Maastricht Backlash and Cultural Sovereignty

• The "Maastricht High": Reflects the initial optimism following the treaty. Similar to a "champagne high," this feeling of elation quickly dissipated.

• Referendum Failures and Narrow Wins:

  • June $1992$: Denmark held a referendum and voted down the treaty.

  • September $1992$: France held a referendum. Despite heavy campaigning by the French president (described as "the petit deserved"), it passed by a very narrow margin, similar to a $5$ to $4$ Supreme Court decision, undermining confidence in the treaty.

• Currency Chaos: Periodic chaos in currency markets disrupted plans for exchange rate cooperation. The British were notably opposed to currency cooperation.

• Resistance to "Brussels": The backlash was against the centralization of regulations in Brussels. Citizens feared the loss of national symbols and traditions:

  • British Sausages: Concern over maintaining specific standards for "bangers and mash" (sausage and mashed potatoes served in greasy newspaper).

  • Beer: Specificity of glassware and formulas for beer, particularly in Belgium.

  • Language/Typography: Protectiveness over diacritical marks like the Spanish tilde or Danish circles.

• Bismarck's Quote: "Policymaking is like making sausage. You don't want to know what goes into it."

Migration, Security, and the Schengen Agreement

• The Conflict of Free Movement: While the Single European Act intended free movement of goods, services, people, and capital, unexpected issues arose regarding refugee flows and "Gypsies" (Travelers).

• Concerns over Travelers: In European history, there is significant ill-feeling toward Gypsy caravans, often associated with fear (e.g., stories of children being given to Gypsies if they misbehaved).

• Border Control Friction: The single market was supposed to end border controls by $1995$.

  • Britain's Stance: Britain refused to abolish border controls, citing the risk of admitting potential terrorists.

• The Schengen Agreement: Seven countries (including France, Germany, and Portugal, but notably not Denmark or Britain) abolished border controls and passports between each other. This created a special "Schengen line" at airports that is faster than the lines for others.

• The Sunday Bread Example: German bakeries are closed on Sundays, while Danish bakeries are not. Before the strict system, Germans would cross into Denmark and merely wave their bread at the border; now they would have to show passports if Denmark had not signed.

Economic Principles: Reciprocity and "Fortress Europe"

• Reciprocity: If a bank is chartered in Britain, it can operate in any other EU country. If a product is made to German health standards, it can be exported throughout the EU.

• "Rush to the Bottom" vs. High Standards:

  • Germany: Concerns that cheaper Spanish goods (due to lower factory inspection and safety costs) would flood the market.

  • Spain: Complaints that they were being forced to meet "ridiculous" German standards.

• Common Standards Necessity: Critical areas like telecommunications require common standards so that technology (like old fax machines) operates across borders without turning messages into "gobbledygook."

• Fortress Europe: Critics charge that rather than promoting free world trade, the EU behaves like a "fortress," protecting sensitive industries (steel, textiles, clothing, footwear) behind a high tariff wall.

• Managed Liberalization: The EU calls its policy "managed liberalization," but critics argue this simply reduces competition in sectors that need efficiency. Millions were spent on French microchips that could not compete with East Asian versions.

The Common Agricultural Policy (CAP)

• Origins: Derived from Article $39$ of the Treaty of Rome ($1957$). It aimed for stable markets and a "fair standard of living for the agricultural community."

• Structure of CAP: Based on high external tariffs, high export subsidies, and internal price support through "intervention buying."

• Intervention Buying: The government collects and stores tens of millions of tons of excess production to keep it off the market and maintain high prices.

• Economic Impact: In $1990$, agriculture accounted for only $4\%$ of France's GDP, yet France insisted on keeping the CAP, nearly jeopardizing GATT global trade talks. Critics argue the EU is a failure if CAP is its only major achievement.

• U.S. Demands: The American government asked for a $75\%$ cut in CAP and a $90\%$ cut in export subsidies for farmers.

• Quid Pro Quo: Historically, the U.S. would back down on CAP demands in exchange for European support against the Soviet Union. By $1990$, with the Soviet Union collapsing, the U.S. became more consistent and firm in its demands.

The Challenges of German Reunification

• Geopolitical Debt: Some in the George H.W. Bush ($41$) administration felt Germany owed the U.S. a favor for supporting reunification when the Soviet Union and other European states (concerned about sports competition and historical wars) were against it.

• The "Champagne High" of Reunification: Initially celebrated with the singing of Beethoven's "Ode to Joy," the reality was difficult.

• Troyhand (Fiduciary): An organization set up to oversee the restructuring and sale of about $2,500$ East German state-owned industries, covering $4,000,000$ employees (including properties owned by the Stasi secret police).

• East vs. West Friction:

  • West Germans viewed East Germans as "lazy and ungrateful."

  • East Germans felt they were being "colonized" by the West.

  • Unemployment in the East reached $20\%$ to $25\%$, comparable to the Great Depression in the U.S. ($25\%$\text{ unemployment in } 1929).

• Result: Despite the friction, reunification succeeded. Angela Merkel, an "Austi" (East German), became Germany's longest-serving prime minister.

Monetary Union, the Central Bank, and "Esperanto Money"

• Monetary Prospects: Maastricht offered the prospect of a common European currency (Euro) and a common central bank.

• German Reluctance: Many Germans did not want to replace the Deutsche Mark—a symbol of postwar success—with what they called "Esperanto money."

• Definition of Esperanto: A post-World War II movement to create a single common language to reduce international disagreements. It merged French, Italian, and Spanish elements but was criticized as being impractical for communicating with people from places like Mumbai, Hong Kong, or Shanghai.

• Economic Realities: John Maynard Keynes once said, "In the long run, we're all dead." This is applied to the long-term hope for common financial management vs. short-term economic pain.

Questions & Discussion

• Q: What was the difference between the EC and the EU?

• A: The instructor clarified that at Maastricht, the European Community (EC) was formally renamed the European Union (EU). While they laid out plans for future economic integration and political assimilation, the actual date of the name change and the establishment of the formal union was the Maastricht Treaty.

• Q: What was the result of the Sudan split?

• A: A student identified that it split into South Sudan.

• Discussion on the Flag: A student (Liv) was counting stars on the flag; the instructor and students discussed whether the number of stars ($12$) represented the original members or stayed static to avoid a "nice flag with all the gold stars in."

• Clarification on the Single European Act: A student asked for the name and date ($1985$) and verified the goal of a common market by the end of $1992$.