From Common Market to European Union: Creating a New Model State? Author: Peter Moloney Persistent link: http://hdl.handle.net/2345/3797 This work is posted on eScholarship@BC, Boston College University Libraries. Boston College Electronic Thesis or Dissertation, 2014 Copyright is held by the author, with all rights reserved, unless otherwise noted. Boston College The Graduate School of Arts and Sciences Department of History FROM COMMON MARKET TO EUROPEAN UNION: CREATING A NEW MODEL STATE? A dissertation by PETER MOLONEY submitted in partial fulfilment of the requirements for the degree of Doctor of Philosophy May, 2014 © Copyright by PETER MOLONEY 2013 Dissertation Abstract From Common Market to European Union: Creating a New Model State? Peter Moloney Advisor: James Cronin In 1957, the Treaty of Rome was signed by six West European states to create the European Economic Community1 (EEC). Designed to foster a common internal market for a limited amount of industrial goods and to define a customs union within the Six, it did not at the time particularly stand out among contemporary international organizations.2 However, by 1992, within the space of a single generation, this initially limited trade zone had been dramatically expanded into the world’s largest trade bloc and had pooled substantial sovereignty among its member states on a range of core state responsibilities.3 Most remarkably, this transformation resulted from a thoroughly novel political experiment that combined traditional interstate cooperation among its growing membership with an unprecedented transfer of sovereignty to centralized institutions.4 Though still lacking the traditional institutions and legitimacy of a fully-fledged state, in many policy areas, the European Union (EU) that emerged in 1992 was nonetheless collectively a global force. 1 In 1952, the Treaty of Paris estblished the European Coal and Steel Community, (ECSC). In 1958, the Treaty of Rome created the EEC and the Euratom Treaty created the European Atomic Energy Community (EAEC). In 1965, the EEC, ECSC and EAEC were merged under a single treaty and thereafter called the European Communities (EC). In turn, these communities became part of the European Union (EU) under the Treaty of European Union (TEU) in 1993. 2 The UN and the GATT had a global impact, NATO had real military power. 3 According to Andrew Moravcsik, ‘The construction of the EC ranks among the most extraordinary achievements in modern world politics…’ Andrew Moravcsik, The Choice for Europe: Social Purpose and State Power from Messina to Maastricht (Ithaca: Cornell University Press, 1998) p. 1. 4 These included a parliament, a commission and a court of justice. My dissertation argues that the organization’s unprecedented transfer of national sovereignty challenged the very definition of the modern European state and its function. In structure and ambition, it represented far more than just a regional trade bloc among independent states: it became a unique political entity that effectively remodelled the fundamental blueprint of the conventional European state structure familiar to scholars for generations. How did such a dramatic transformation happen so quickly? I argue that three forces in particular were at play: the external pressures of globalization, the search for a new Western European and German identity within the Cold War world and the often unintended consequences of the interaction between member state governments and the Community’s supranational institutions. In particular, I examine the history of the EEC’s monetary union, common foreign policy, common social policy and the single market to explain the impact of the above forces of change on the EEC’s rapid transformation. In memory of Anna, with thanks to the priceless patience and support of Ainsley Table of Contents Introduction 1-44 1. European Integration, 1945-1969 45-105 2. The Roots of European Monetary Union, 1969-1992 106-161 3. The Quest for a Common EU Foreign Policy 162-230 4. Reassessing the British Contribution to the EEC, 1961-92 231-289 5. The Incorporation of Euro groups within the EU, 1958-92 290-348 Conclusion 349-360 Bibliography 361-377 i Introduction Argument In 1957, six West European states signed the Treaty of Rome, establishing the European Economic Community1 (EEC). Originally designed to foster a common internal market for a limited amount of industrial goods and to define a customs union within the Six, neither its reach nor its ambition seemed to single it out among contemporary international organizations as in any way remarkable.2 However, by 1992, within the space of a single generation, this initially limited trade zone had dramatically transformed into the world’s largest trade bloc and single market, on par with the United States and Japan in global economic fora, and also exercised political powers previously the exclusive domain of sovereign states.3 Most remarkably, this transformation resulted from a thoroughly novel political experiment that combined traditional interstate cooperation among its growing membership with a unique pooling of sovereignty under centralized institutions. Though still lacking the traditional legitimacy of an established state, in many areas, the descendent of the EEC, the European Union (EU), which emerged in 1992, was clearly more powerful than the sum of its parts. 1 In 1952, the Treaty of Paris created the European Coal and Steel Community, (ECSC). In 1958, the Treaty of Rome created the EEC and the Euratom Treaty created the European Atomic Energy Community (EAEC). In 1965, the EEC, ECSC and EAEC were merged under a single treaty and thereafter called the European Communities (EC). In turn, these communities became part of the European Union (EU) under the Treaty of European Union (TEU) in 1993. I will use the appropriate acronym according to the time period in question. 2 The UN and the GATT had a global impact, NATO had real military power. The EEC at first appeared to be a limited trade zone. 3 Under the Treaty of European Union (TEU), the new EU gained significant supranational power in areas such as monetary policy, agricultural policy, trade, competition policy, social policy and environmental policy as well as advanced international cooperation in foreign policy. It also granted European citizenship. According to Andrew Moravcsik, ‘The construction of the EC ranks among the most extraordinary achievements in modern world politics…’ Andrew Moravcsik, The Choice for Europe: Social Purpose and State Power from Messina to Maastricht (Ithaca: Cornell University Press, 1998) p. 1. 1 EU governance features a complex supranational institutional structure, including a directly elected representative parliament, a court of justice and a commission of unelected civil servants that exercises real and significant influence on the everyday lives of European citizens. While the overall structure of the EU after 1992 retained some traditional characteristics of a loose international organization, I argue that the unprecedented levels of national sovereignty transferred by member states to central authority since 1958 challenged the very definition of the modern European state and its function. By its structure and ambition, it represented far more than just a regional trade bloc among sovereign states: it had become a unique new political entity that effectively redefined the fundamental blueprint of the conventional European state structure familiar to scholars for generations. How did such a dramatic transformation happen so quickly? I argue that three forces in particular were at play: globalization, the search for a new Western European and particularly German identity within the Cold War world and the, often unforeseen, policy impact of the European Commission and the European Court of Justice (ECJ). These two institutions grew to assume the role of gatekeeper for the founding treaties’ expressed purpose of ‘ever closer union’ among member states. My dissertation traces the long roots of these forces that reshaped Western Europe and, by placing them in their historical context, explores their influence on decades of policy development and adaptation within the Community. While my research confirms that member state governments continued to play a pivotal role within the organization into the 1990s, I argue that the forces outlined above combined to create a genuinely new model of governance that has permanently altered the traditional political structure of 2 Western Europe from a collection of independent, sovereign states into a political union of increasingly integrated state structures that have voluntarily ceded sovereignty to a handful of core Community institutions.4 Methodology and Sources My methodological approach links several key policy areas, including economic policy, monetary union, foreign policy, regional development and social policy, none of which can be properly understood in isolation. As an organization, the EEC has always advanced by ‘bundling’ policies, each of specific importance to particular member states and Community institutions, into a more global and generally acceptable agreement. Though often carrying the tag of ‘lowest common denominator’ politics, this bargaining approach has been the Community’s modus operandi since the beginning. Consequently, any historical analysis of the EEC must proceed along a similar methodological path of viewing common policies in a broader context and from a more Community-based perspective. Moreover, important decisions