Fit at 50? A special report on the European Union March 17th 2007 Republication, copying or redistribution by any means is expressly prohibited without the prior written permission of The Economist The Economist March 17th 2007 A special report on the European Union 1 Fit at 50? Also in this section Are you sitting comfortably? A brief refresher course on the workings of the European Union. Page 2 The quest for prosperity Europe’s economy has been underperform- ing. But whose fault is that? Page 3 Constitutional conundrum Damned if they do and damned if they don’t. Page 5 The ins and outs The EU’s most eective foreign-policy instru- ment has been enlargement. But how far can it go? Page 8 Four Ds for Europe Dealing with the dreaded democratic decit. The European Union has been far more successful than anyone Page 11 expected when the Treaty of Rome was signed half a century ago. But, argues John Peet, it now has three big problems to solve The European Union at 100 N MARCH 25th 1957 a gaggle of lead- the project’s historyworse than the per- Is the best yet to come? Page 14 Oers from six European countries iod of Charles de Gaulle’s empty chair in (France, West Germany, Italy and the Be- 1965, or Margaret Thatcher’s persistent de- nelux trio) met in the great hall of the Hora- mands for our own money back be- tii and the Curiatii in Rome’s Capitoline tween 1979 and 1984. museum. Behind them two 17th-century Yet today’s diculties should not be al- frescoes depicted ancient Rome’s bloody lowed to obscure Europe’s achievements history: a suitable backdrop, since one of of the past 50 years. True federalists actu- their concerns was to prevent a recurrence ally saw the Treaty of Rome as a move of Europe’s internecine wars. They signed away from the building of a European su- a treaty to establish a European Economic perstate that they had hoped would de- Community (EEC), soon to become velop from the European Coal and Steel known as the common market. Next week- Community, set up in 1951. But in fact the end the present crop of European Union EEC grew out of two other events: the leaders will gather in Berlin (because Ger- French National Assembly’s rejection of many holds the rotating EU presidency) to the proposed European Defence Commu- Acknowledgments mark the 50th anniversary of this historic nity in 1954 and the Suez crisis of 1956. The The author wishes to thank those who gave time for inter- views, not all of whom are mentioned in the text. Special step towards European integration. rst pointed to a reassertion of nation- thanks are due to José Manuel Barroso and his fellow Euro- The German chancellor, Angela Mer- states at the heart of Europe; the second led pean commissioners; to Martin Schulz, Graham Watson, El- kel, wants the Berlin summit to issue a France to conclude that a European com- mar Brok, Alain Lamassoure, Bronislaw Geremek, Inigo Mendez de Vigo and James Elles at the European Parlia- ringing declaration about the values and munity was in its vital interest. ment; to the Danish foreign ministry; to François Heis- successes of the EU. She sees this as a way A bigger objection to the EEC was that it bourg, Charles Grant, Pavel Swieboda, Paul Hofheinz, Jean to relaunch the European project, which covered only a small part of Europe. So- Pisani-Ferry and André Sapir among think-tankers; and to Jacques Delors, Peter Sutherland, Chris Patten, John Kerr, many think has been in serious trouble viet-dominated eastern Europe was ex- Patrick Messerlin and Timothy Garton Ash. ever since French and Dutch voters re- cluded, as were fascist Spain and Portugal, jected the draft EU constitution in the sum- because they were not democracies. But A list of sources is at mer of 2005. Shortly afterwards Jean- Britain and others chose to stand aside, ei- www.economist.com/specialreports Claude Juncker, prime minister of Luxem- ther because they disliked the political bourg, which then held the EU’s integration implicit in the new grouping or An audio interview with the author is at presidency, declared solemnly that the because they wanted to preserve their www.economist.com/audio EU is not in crisis; it is in deep crisis. neutrality. Indeed, two years after the Jacques Delors, who was president of the Treaty of Rome came into force, seven A brieng on the EU is at European Commission from 1985 to 1994, countries (Austria, Britain, Denmark, Nor- www.economist.com/europeanunion says that the present crisis is the worst in way, Portugal, Sweden and Switzerland)1 2 A special report on the European Union The Economist March 17th 2007 A brief refresher course on the Are you sitting comfortably? workings of the European Union HE nuts and bolts of the European tates every six months, so each country aairs, the parliament has no say. The TUnion are hardly riveting, but a basic now gets to be in the chair once every 13½ parliament has to approve the choice of knowledge of its institutions is essential years. The council often makes decisions commission president and can dismiss to understanding how it works, so here is by qualied majority, a weighted system the entire commission, but not individual a quick reminder. of national votes, but on some issues (eg, commissioners. At the heart of the EU, as envisaged by taxation) it has to be unanimous. The European Court of Justice, based its French founding father, Jean Monnet, As part of the council, the high repre- in Luxembourg, acts as the EU’s supreme is the European Commission, to which sentative for foreign policy reports to na- court in areas for which the union is each national government appoints one tional governments and may (or may not) responsible (which does not include commissioner for a ve-year term. The work closely with the commissioner for criminal law, for example). There is one college of 27 commissioners sits atop a external aairs. The common foreign and judge per country. A court of rst instance 20,000-strong bureaucracy that consti- security policy he runs is not part of the helps with the caseload. Cases are de- tutes the EU’s executive. The commission classic Monnet machinery (sometimes cided by simple majority. Luxembourg also has the sole right of initiating legisla- known as the community method), but also hosts the Court of Auditors, which tion, administers the budget and has is formulated by the member govern- checks EU spendingand qualies the ac- other independent powers including de- ments. The same is true for most policies counts every year. ciding competition cases and represent- on justice and home aairs. The EU has a plethora of other agen- ing the union in trade negotiations. The other law- and budget-making cies, as well as the Luxembourg-based The commission takes its political cue body is the European Parliament. It has European Investment Bank, the world’s from the European Council, made up of 785 members, directly elected in rough biggest multilateral borrower. Among the the 27 heads of government, which meets proportion to each country’s population. more puzzling are two Brussels-based ad- four times a year and also nominates the Like the commission, the parliament visory bodies: the Economic and Social commission president. The European serves for ve years; unlike the commis- Committee, which brings together the Council is, in practice, the highest incar- sion, which is in Brussels, it holds its ple- social partners, and the eponymous nation of the Council of Ministers, the nary meetings mostly in Strasbourg, Committee of the Regions. Between them main law- and budget-making body, though committees meet in Brussels. they cost some 150m ($200m) a year to which brings together national ministers Most EU laws are subject to co-decision run, and nobody can remember what (eg, of nance, foreign aairs or agricul- by the council and parliament, but in they are for. But this being the EU, nobody ture). The presidency of the council ro- some areas, including justice and home dares to scrap them either. 2 set up the rival European Free-Trade Asso- they would instantly qualify for member- change. It has sent troops as far aeld as ciation (EFTA). Seven and Six was how ship are Iceland, Norway and Switzerland. Aceh and Congo and co-ordinated big na- this newspaper greeted the news. The European Union has also moved tional deployments in Lebanon. It has Fifty years later the European Econ- far beyond the economic sphere. The com- started membership negotiations with omic Community has changed out of all pletion of the single market was set in train Croatia and, most momentously, with Tur- recognition, having metamorphosed into only in the 1980s and remains a work in key. Claims that this club has been unable the European Union and grown far be- progress. But just as the American govern- to function since 2005 seem overblown. yond the original six members. Despite ment used the constitution’s interstate the EFTA experiment, Britain applied for commerce clause to expand its powers, so The 50-year itch membership only four years after the the European institutions have exploited Yet the EU does face three huge, related pro- Treaty of Rome, but was blocked by de single-market rules to extend their respon- blems. The rst is what to do about its draft Gaulle’s veto and did not join until 1973, sibilities into such areas as social policy, constitution, which was signed in October along with Denmark and Ireland.