European Union Politics

Palgrave Foundations Series

by John McCormick

Chapter 6: Paving the Way to European Union

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The building of the single market was at the core of European integration in the 1960s, but there had been only slow progress. Continued efforts to achieve exchange rate stability pushed monetary union up the agenda, leading to the launch in 1979 of the European Monetary System.With worries about rising international competition and inflexible European labour markets, there was a renewed effort in the 1980s to complete the single market, resulting in agreement on the first new treaty since Rome, the 1986 Single European Act (SEA). This gave the European Economic Community – now more often known as the European Community, or simply ‘the Community’ – a new sense of mission and identity.

Meanwhile, the collapse of the Berlin Wall in 1989 symbolized the end of the Cold War division of the continent, and emphasized the urgent need for the Community to assert itself on the global stage. But serial embarrassments followed as the Community failed to agree on what action to take in the 1990–91 Gulf War or in the crisis in the Balkans. New leadership brought new ideas, leading to the agreement in 1992 of the Maastricht treaty. This confirmed plans for the creation of a single European currency, gave new emphasis to building a common foreign policy, and brought a change of name: the Community would now be part of a broader-based European Union.

There was also a new focus on enlargement, with EFTA members given access to the single market through a new European Economic Area in 1994, followed in 1995 by the accession of Austria, Finland and Sweden. But there was also a backlash against integration, and signs that many Europeans had increasing doubts about the decisions being taken in their name by their leaders.
  • Exchange rate stability had been central to western economic and monetary policy since Bretton Woods. The first attempt to pave the way to a single currency – the 1972 ‘snake in the tunnel’ – failed mainly because of bad timing, and it was replaced by the 1979 European Monetary System.
  • In the mid-1980s an attempt was made to refocus attention on completion of a European single market. The result was the signature in 1986 of the Single European Act, the first major amendment to the founding treaties of the European Community. Its key goal was a single market by the end of 1992.
  • Concerned about the slowness with which borders were being opened within the EEC, several member states signed the Schengen Agreement in 1985, aimed at a fast-track lifting of customs and immigration checks.
    The political revolutions of 1989 brought an end to the Cold War and began lifting the divisions between western and eastern Europe.
  • The signature of the 1992 Treaty on European Union confirmed the three stages to the achievement of a single currency, expanded the policy reach of integration (notably into foreign and security policy), and created a new three-pillar European Union. The treaty proved controversial, and was delayed by a negative vote (later reversed) in a Danish national referendum.
  • With more countries hoping for EU membership, the European Economic Area was created in 1994 to give EFTA members access to the single market, and 1995 saw the entry of Austria, Finland and Sweden.
  • The process of integration had at first attracted little public attention. But the passage of the Single European Act made the headlines, paving the way for a heated debate over Maastricht that changed the nature of the debate. Supporters and opponents of integration became more vocal, and national governments had no choice but to pay more attention to public opinion.