by Andrew Moravcsik Department of Government and Center for International Affairs Working Paper Series #21

Transcription

1 NEGOTATNG THE SNGLE AO': NATONAL NTERESTS AND CONVENTONAL STATECRAFT N THE EUROPEAN COMMUNTY by Andrew Moravcsk Department of Government and Center for nternatonal Affars Workng Paper Seres #21 The am of ths paper s to explan the unexpected "relaunchng" of the European Communty whch took the form of the Sngle European Act and the program for completng the nternal market by The data presented here challenge the common vew that the Sngle Act was the result of an elte allance between the Commsson Parlament and supranatonal busness nterest groups-a vew consstent wth neofunctonalst regonal ntegraton theory. An alternatve vew s presented whereby EC reform rests on nterstate bargans between Brtan France and Gennany. The essental precondton for reform was the convergence of European economc polcy preferences followng the reversal of French domestc polcy n 1983 combned wth the barganng leverage that France and Germany welded aganst Brtan by explotng the threat of creatng a "two-track" Europe and excludng Brtan from t. These fndngs suggest that neofunctonalst theores of regonal ntegraton must be supplemented or perhaps supplanted by a "modfed structural Realst" approach drawn from regme theory whch stresses more tradtonal conceptons of natonal nterest and power.

2 The European Communty s experencng ts most mportant perod of reform snce the completon of the Common Market n 1968.' Ths new mpulse toward European ntegraton-vthe "relaunchng" of Europe as the French call t--was wholly unexpected. The late 70s and early 80s were the era of "Europessmsm" and "Euroscleross" when poltcans and academcs alke lost fath n ts nsttutons. Wthn a few years ths malase has been replaced by optmsm and nsttutonal momentum. What explans the sudden and unexpected relaunchng of the Communty?. The 1992 ntatve and Problem of Unexpected Reform The blueprnts for the new European reforms can be found n two documents: the European Commsson's Whte Paper on the nternal Market of 1985 and the Sngle European Act (SEA) sgned by the member states n These documents lnk a programme of market lberalzaton wth procedural reforms desgned to streamlne Communty decson-makng. The frst half of ths reform package ntally set forth n the Whte Paper ams to create "an area wthout nternal fronters n whch the free movement of goods persons servces and captal s ensured." To realze a "Europe wthout fronters" European leaders have commtted themselves to address ssues never successfully tackled n a multnatonal forum such as comprehensve lberalzaton of trade n servces and the removal of domestc regulatory non-tarff barrers.f The second half of the reform package consstng of procedural reforms outlned n the Sngle Act s desgned to facltate smoother decson-makng. Prevous attempts to set detaled and unform European standards for nternal regulatons ("harmonzaton") had proven tme-consumng and frutless. Accordngly the Commsson's Whte Paper called for "mutual recognton" a more modest yet potentally Qute sgnfcant form of lberalzaton whereby only mnmal standards are harmonzed after whch any product servce or frm produced or ncorporated n accordance wth the natonal regulatons of one member state cannot be barred from the markets of the others.

3 Even more mportant than mutual recognton are procedural changes n decson-makng. The SEA expands the use of majorty votng n the Councl of Mnsters and at least mplctly suppresses the natonal veto. Snce January 1966 majorty votng where foreseen n theory by the Treaty of Rome had been lmted n practce by the nformal "Luxembourg Compromse" n whch France unlaterally asserted that any member state could veto a proposal n the Councl of Mnsters by declarng that a "vtal" or "very mportant" nterest was at stake. The expanson of majorty votng under the SEA seeks to lmt the role of the natonal veto but s lmted almost entrely to decsons relatng to the nternal market. Wth the excepton of a few mnor ntatves (such as the ncluson of collaboratve research-and-development programs under the treaty) other potental areas of European ntegraton such as poltcal cooperaton socal legslaton monetary polcy and further procedural reform as well as fundamental consttutonal ssues such as enlargement are subject to nether the new approach nor majorty votng. 3 Accordng to the publc statements of European leaders the plan for market lberalzaton by 1992 was prmarly a response to the perceved economc weakness of Europe. Poltcans perceved ths falure through persstent hgh unemployment and long-term declne n nternatonal compettveness vs-a-vs the Unted States and Japan partcularly n hgh-technology ndustres such as electroncs and telecommuncatons. The prescrpton found n the 1992 ntatve was derved from classcal economc lberalsm: what holds Europe back s nternal barrers whch generate admnstratve costs for governments and frms and whch preserve suboptmal economes of scale." To compete wth Amercan and Japanese frms European frms must be encouraged to explot an "nternal" market of Contnental proportons. Accordngly the Whte Paper offers a wde-rangng package of measures desgned to remove admnstratve techncal fnancal and personal barrers to cross-border trade and ownershp. Yet awareness of possble economc benefts dd not automatcally call forth a European program of lberalzaton or reform of EC decson-makng. Free-trade 2

4 lberals had been callng for further lberalzaton snce West European economes had been n crss for over a decade. Durng ths perod the Commsson repeatedly proposed programmes much lke the Whte Paper and approprate polcy responses lberal and non-lberal were proposed and debated among the member states. All these efforts were wthout result. What needs to be accounted for therefore s not the exstence of a new European ntatve ~ but ts precse tmng and specfc content. After years of Quescence why were sgnfcant reforms approved n 1985? Why dd the ntatve focus on nternal market lberalzaton? How were the heads of member states convnced to renounce ther veto rght and accept supranatonal decson-makng over these ssues? The am of ths paper s to answer these emprcal Questons and to relate the fndngs to theores of nternatonal cooperatonf Specfcally the data presented s used to challenge the vew that the Sngle Act and Whte Paper resulted from an elte allance between the Commsson Parlament and supranatonal busness nterest groups--a vew consstent wth neo-functonalst regonal ntegraton theory. An alternatve vew s presented whereby EC reform rests on nterstate bargans between Brtan France and Germany. The essental precondtons for reform were the convergence of economc European polcy preferences followng the reversal of French domestc polcy n 1983 combned wth the negotatng leverage that France and Germany ganed by explotng the threat of creatng a "two-track" Europe and excludng Brtan from t. These fndngs suggest that neo-functonalst ntegraton theory must be supplemented or perhaps supplanted by a "modfed structural Realst" approach drawn from regme theory whch stresses more tradtonal conceptons of natonal nterests and power.. New Evdence for Ree:onal ntegraton Theory Journalstc reportage academc analyss and ntervews wth European offcals reveal a bewlderngly wde range of explanatons some contradctory for the tmng and content of the Sngle Act and the Whte Paper. As one French offcal ntervewed n Brussels Qupped "When the lttle boy turns out well everyone clams paterntyl'f' But 3

5 three factors consstently recur: pressure from wthn European nsttutons partcularly the Parlament for procedural reform the lobbyng of transnatonal busness nterest groups and the poltcal skll of Commsson Presdent Jacques Delors.7 Let us consder these factors n more detal. The Role of Communty nsttutons: Between 1980 and 1985 pressure for reform could be dscerned wthn varous EC nsttutons. The most actve was the European Parlament n whose resolutons and reports can be found two programmes- one "maxmalst" and one "mnmalst." The "maxmalsts" ncludng many talans and Qute a number of Germans were European federalsts. They advocated an expanson of Communty actvtes and procedural reform focusng partcularly on ncreasng the power of the Parlament.f These actvsts followng a Europarlamentary penchant for anmal names came to be called the "Crocodle group" after the Strasbourg restaurant where they frst met. Ther efforts led by venerable Altero Spnell one of the foundng fathers of the Communty culmnated n the European Parlament resoluton of February 1984 proposng a "Draft Treaty Establshng the European Unon"--a new more ambtous document to replace the Treaty of Rome. The actvtes of the Crocodles was gven new mpetus by the advent of Europe-wde drect electons to Parlament n 1979 whch endowed the body wth a new democratc legtmacy. A second group of parlamentarans the "mnmalsts" were skeptcs of federalsm and parlamentary reform. nstead they favored workng wth natonal leaders to lberalze the nternal market. Founded late n 1981 the "Kangaroo Group" (named for the Australan marsupal's ablty to "hop over borders") was funded by a group of! sympathetc (largely Brtsh and Dutch) busness nterests and counted Basl de Ferrant a leadng Brtsh ndustralst and Tory parlamentaran among ts teaders." Kangaroos encouraged Parlamentary studes on economc topcs and n 1983 they launched a publc campagn to n favor of a detaled EC tmetable for abolshng admnstratve techncal and fscal barrers a reference to 'whch was ncluded n the Draft Treaty.'o The 4

6 1992 and Regonal ntegraton Theory Anecdotes such as these are often cted as evdence that Sngle Act and Whte Paper emerged from an elte allance between bg busness the Commsson and other; European nsttutons. Delors the story goes created a compellng reform program by: \ lnkng the procedural reforms proposed by Parlament wth the nternal market' ' : lberalzaton advocated by busness and elaborated by Cockfeld and then convnced the member states to accep~ t. 16 These factorl-nterest group pressure nsttutonal momentum and poltcal leadershp n Brussels-c-are famlar to students of nee-functonalst regonal ntegraton: theory whch remans the most sophstcated socal scentfc attempt to account for: European ntegratlon.v Space does not permt a detaled dscusson of neo-functonalsm but ts essence les n wo premses. The frst s that of nterest-group functonalsm. Democratc captalst st!ltes cooperate to form nternatonal nsttutons because they offer the optmal way to satsfy the socoeconomc needs of poltcal groups.18 Over tme the expanson of group loyaltes expectatons and actvtes across borders wll lead to the! creaton of poltcal organzatons prvate and publc at the supranatonal level and subsequently ncreases n ther strength and autonomy. Neo-f'unctonalsts assert that classcal nterstate dplomacy s beng dsplaced by actors actng "above" and "below" the naton-state. ncreasngly the key actors are not to be found among dplomats and poltcans but ether among supranatonal offcals and multnatonal nterest-groups or among domestc nteres groups and poltcal partes. 19 The second key nee-functonalst premse s that of spllover. Spllover s a process of self-sustanng feedback whereby ntal ntegraton begets more of the same. The boundares between ssue areas and between natons are flud and f successful at meetng the needs of grbups nternatonal cooperaton wll expand to nclude new ssue areas ("functonal spllover") and new countres ("geographcal spllover"). What dstngushes neo-functt>nalst theory s the clam that ths expanson takes place because of a feedback loop endogenous to the process of ntegraton rather than because of 7

7 changes n exogenous varables. Once ntated ntegraton s self-sustanng. Haas! explaned systems change--fundamental moments of reform n whch new ssues are taken up new decson-makng procedures adopted or new members admtted--as the result of spllover. 20 Spllover can work through varous mechansms two of whch concern us here. The frst s nherent n the nature of economc development. Once ntegraton begns n a certan sector t s argued the economc and socal lnkages between ssue areas wll requre regulaton n new areas to preserve the gans that have been made. A second mechansm s the creaton and empowerment of supranatonal organzatons both prvate and publc whch eventually supplant ther domestc counterparts. These organzatons then shape the further path of ntegraton.f" Haas predcted that as ntegraton advances nterstate bargans are no longer lmted to the mnmum common denomnator of natonal preferences or a smple compromse between opposng postons but move toward a pattern of accommodaton n whch the partcpants refran from uncondtonally vetong proposals and nstead seek to attan agreement by means of compromses "upgradng common nterests.22 n other words governments engage n a process of log-rollng. The wllngness of governments to make postve trade-offs n turn creates opportuntes for supranatonal admnstrators to act as "nsttutonalzed medators" and to "seze upon crses" as opportuntes for "creatve personal acton... the soluton of whch upgrades common nterests among the actors.23 Hence neo-functonalsm at least n ts most systemc varant would lead us to expect to observe exactly what the commentators above have descrbed: ncreasng domestc and nternatonal nterest group nfluence for nternal market lberalzaton and pressure from wthn supranatonal nsttutons lke the.european Parlament and leadershp by an actve European Commsson would propel ntegraton beyond the stage of lowest-common-denomnator barganng.f" 8

8 As we shall see later n ths paper there are mportant emprcal reasons to beleve that these neofunctonalst factors were not decsve n the case of the Sngle Act. n ths context t s worth brefly notng that the experence of the Communty snce the md-1960s does not support neo-functonalst predctons-s-at least n ther most systemc form. European ntegraton dd not proceed steadly and ncrementally but n starts and stops. Moreover for at least two decades after the Luxembourg compromse n 1966 the Communty moved toward confederatonalsm and more ntergovernmental ("state-tostate") decson-makng centered n the Councl and summt meetngs rather than toward ncreasng grants of authorty to supranatonal bodes such as the Commsson and Parlament. 25 One detaled study concluded that systems change n the Communty has n fact proven more "poltcal" and less "techncal" than Haas predcted. Whle spllover and forward lnkages may n some cases suffce to prompt the contnued ntensfcaton of supranatonal decson-makng wthn a gven sector they playa "mnmal role" n the process of openng new ssues reformng decson-makng procedures or ratfyng the accesson of new members all of whch generally prompt actve nterventon by heads of state and a consderable amount of non-technocratc nterstate barganng. n 1976 n part as a result of these crtcsms Haas hmself proclamed the "obsolescence of regonal ntegraton theory" and called for t to be subsumed wthn a "general theory of ntegraton.26 Regme Theory as an Alternatve EXPlanaton s there any alternatve to regonal ntegraton theory? Attempts to develop the general theory of ntegraton called for by Haas have been made--mostly under the general rubrc of "regme theory." Much of ths theorzng was based on a return to the neo-realst emphass on the calculaton of nterests and the dynamcs of nterstate barganng and on the convcton that Realst assumptons need not lead to pessmstc. conclusons about the possblty for cooperaton. Yet despte the emprcal weakness of regonal ntegraton theory as a predctor of systems change no attempt has been made 9

9 apply the nsghts from the study of regmes to the European Communty.V! n ths paper elements of regme theory wll be used to construct an alternatve explanaton of systems change that offers an emprcally vald set of predctons about the process by whch the SEA was ntated and approved. [See Chart One.] Ths approach s based on three prncples: (1) Actors and nterests. The three largest states weld a preponderant nfluence and ther negotatng postons reflect nternatonal comparatve advantages the economc polcy preferences of the rulng coalton; (2) Barganng. Each of the three largest states exercses a veto over regme change unless threatened wth excluson from the reform by an allance of the other two; (3) Comolance. The resultng agreements wll restrct the possbltes for future transfers of soveregnty.28 Let us consder each n turn. Actors and nterests: Negotatons over systems change n the European Communty are essentally ntergovernmental. States are the most mportant actors and! moreover t s the three largest countres that possess the necessary resources to acheve ther goals n nternatonal negotatons. n ths vew the Communty has from ts ncepton been based on a set of nterstate bargans between the leadng member states -ntally blateral agreements between France and West Germany later trangular agreements ncludng the Unted Kngdom. Each vews the Communty through the lens of ts natonal nterests; Communty poltcs s the contnuaton of these nterests by other means. These natonal nterests are specfc to each country and do not result automatcally from technocratc decson-makng or nterest group barganng. nstead they reflect the natonal nterest as seen by the small group of poltcans who make European polcy. The key decson-makers are the head of government and hs or her closest advsors and mnsters generally from the rulng party party facton or rulng coalton. At least n the short term these poltcans have a consderable ablty to act autonomously of ther socetes. Thus whle t s true as neo- f" unctonalsts argue t hat there are general systemc ncentves for nternatonal cooperaton such ncentves are 10

10 CHART ONE PROCESS-LEVEL PREDCTONS OF ALTERNATVE APPROACHES! Regonal /ntegrat~on Theory Regme Theory Key Actors nterests Barganng nterest Groups and Supranatonal Eltes Specfc Elte Group nterests ncreasngly nfluenced by. prevous ntegraton Logrollng and Lnkages; Upgradng the common nterest Heads of Government Top Natonal Offcals Structural economc nterests economc polcy goals as defned by the rulng party leader's commtment to Europe Mnmum Common Denomnator (veto group) except where the threat of excluson s made Nature 0/ the Spllover ssue Agreement areas flud ssue areas rgd and subject to change only by further nterstate agreement under the unanmty rule loa

11 weak. A constant pressure for ntegraton s nevtable; the reacton of governments s not. Natonal nterests have two elements one structural and one poltcal. The structural element reflects the country's poston n the global economy. n the early years of the Communty for example Germany agreed to fnance a dsproportonate share of the budget much of whch went to France n the form of subsdes to ts relatvely effcent agrcultural sector n exchange for market lberalzaton for ndustral goods n whch Germany enjoyed a comparatve advantage. As the economes of the Communty evolved the real economc nature of these bargans changed wth powerful poltcal support for agrculture subsdes leadng Germany to become even more attached to the CAP and the spectacular growth n French ndustry leadng France to support the Common Market. The 1992 programme s concerned wth lberalzng servces an area n whch Brtan has tradtonally been qute compettve. But the European polces of the major European states do not smply mrror ther poston n the world economy. There s room as well for the "autonomy of poltcs.29 Natonal nterests are also nfluenced by the partc~lar economc and poltcal polcy preferences of the poltcal leadershp. Support for nternatonal lberalzaton goes hand-n-hand wth a polcy of economc lberalzaton at horne. As long as a large states favor nterventon and protecton over lberalzaton a consensus for EC lberalzaton would be dffcult to acheve. These economc polcy preferences generally reflect the polces of the governng party facton. Moreover the extent to whch the head of l government supports further European ntegraton as an end n tself s an mportant component n the natonal nterest. Barganng: n the absence of a "European hegemon" capable of provdng unversal ncentves or threats to promote regme formaton t~ere wll be few nstances of lnkages log-rollng or sde-payments between the major states. Whle small countres can be bought off wth sde-payments large states wll exercs~ a veto over fundamental changes n the scope or rules of the regme. Hence negotatons tend to converge toward

12 the mnmum common denomnator of large state nterests. The only tool that can force a state to accept an outcome on a major ssue outsde of the mnmum common denomnator s the threat of excluson. Once a regme has been created t s expensve to be excluded n part because the non-member thereby loses ts nput nto further decson-makng and n part because t s dened the benefts. f two major states can solate the thrd and threaten t wth excluson and f such excluson undermnes the substantve nterests of the excluded state the coercve threat may brng about an agreement at a level of ntegraton above the mnmum common denomnator. Complance: The decson to jon a regme nvolves a sacrfce of soveregnty n exchange for certan advantages. Negotatons about systems change are about settng the boundares of ssue areas and negotators seek to safeguard themselves aganst any future uncertanty by lmtng ts scope. Rather than postponng ssues for later decson -Haas's procedure of "upgradng the common nterest"--governments wll play t safe by ' clearly delneatng the boundares of reform.. Natonal nterests 'and 1992 The regme-theoretcal explanaton outlned above suggests that an analyss of the 1992 ntatve must begn by examnng the underlyng preferences of Germany France and Brtan. Recall that Delors dentfed four ssue areas that mght have served as the vehcle for major EC reform: monetary polcy defense cooperaton nsttutonal reform and nternal market lberalzaton. A glance at the natonal preferences for poltcal or defense cooperaton and monetary coordnaton suggest lttle possblty of a formal agreement snce n both cases France was opposed by both Brtan and Germany: [See Chart Two.] nter'nal market polcy and procedural reform of the Councl later the two components of the 1992 ntatve offered more promse. 12

13 CHART TWO NATONAL PREFERENCES OF MAJOR EUROPEAN STATES Germany France Unted Kngdom nternal Market Lberalzaton Favorable n prncple Weakly but ncreasngly favorable after Favorable n prncple but only once budgetary ssues were resolved. Strengthenng Monetary Coordnaton Slghtly stronger EMS after captal flows lberalzed. Movement toward a European central bank. Non-partcpan n the EMS; opposed to further coordnaton. Poltcal Cooperaton Favorable to codfcaton of current cooperaton. Favorable to creaton of Secretarat- General. Favorable to codfcaton of current cooperaton. Procedural Reform Treaty revson to provde for stronger role for Parlament repudaton of the Luxembourg Compromse and majorty votng. Treaty revson or new treaty to allow for "varable geometry" programs and after early 1984 to repudate the Luxembourg compromse and promote majorty votng n the Councl but no new powers to the Parlament. No revsons to' treaty support for Luxembourg compromse but also for nformal efforts to facltate more majorty votng. 12A

14 Germany's Support for Reform Both procedural reform and nternal lberalzaton found enthusastc supporters n West Germany. Economc lberalzaton had long been vewed by the major German poltcal partes and ther leaders as an economc opportunty for Germany. A greater role for the European Parlament s vewed both as desrable n tself and as a necessary step towards eventual poltcal unon. German Foregn Mnster Hans-Detrch Genscher s also a strong supporter of European poltcal cooperaton whch he vews as an mportant part of hs long-term strategy vs-a-vs Eastern Europe. On the other hand at the tme Germany was ambvalent about alterng the agrcultural polcy partcularly f t meant that Germany would pay more and was frmly opposed to further monetary ntegraton at least untl captal flows were lberalzed. 3D France and 'Brtan's vews toward the lberalzaton and procedural reform! were more problematc. Untl 1984 French leaders were ambvalent toward nternal lberalzaton and procedural reform and even after 1984 Brtsh leaders contnued to have doubts about the latter. To understand the roots of these preferences let us consder each country 'n turn. Mtterrand on the Road to Damascus Although tr~dtonally pro-european the French Socalst Party all but gnored Europe durng the frst few years of the Mtterrand presdency.31 The French government dd float an ntatve n October 1981 on a "European socal space"--a programme for employment through fscal stmulaton blled as the frst step toward a "socalst Europe"--and another n the Fall of 1983 on a European technology program. Both were mnor efforts. The frst reflected the agenda of the French Socalst Party at the tme but found fe~ frends n ether Bonn or London and was never dscussed at the Councl. The second 'even more modest n scope offered support for polces already n the process of adopton by the Communty. 13

15 France's role as a European outsder durng ths perod reflected ts unorthodox domestc economc polces whch ran counter to those of Germany and the Unted Kngdom. Untl 1983 French economc polcy was conceved by the more radcal wng of the Socalst Party led by poltcans lke Jean-Perre Chevenement and Perre Beregovoy. Natonalzaton drect nterventon to ncrease employment and ncreases n socal welfare spendng undermned nternatonal busness and fnancal confdence n the French economy. By March 1983 the French government had already negotated two devaluatons of the franc wthn the EMS and was rapdly headng for a thrd. Other European governments partcularly the German made t clear that a contnuaton of expansve polces was ncompatble wth contnued membershp n the EMS. Many Socalsts urged Mtterrand to adopt a strategy of autarky--mport protecton captal controls and repudaton of the EMS--to protect expansonst domestc polces. Others n the moderate wng of the Socalst party represented by poltcans lke Mchel Rocard and Jacques Delors on the other hand backed nearly unanmously by French economc technocrats advocated contnued EMS membershp external openness and an austerty polcy consstng of wage restrant and cuts n publc expendtures. Some moderates also realzed that the economc fundamentals underlyng French support for EC agrcultural polcy were changng. Though domestc. poltcs dctated that the government not move too quckly aganst agrcultural nterests France was no longer a! large net benefcary from the EC budget wth even bleaker prospects ahead after the en try of Span and Portugal.32 Mtterrand's decson to reman n the EMS announced on 21 March 1983 marked a turnng pont n French domestc poltcs and wth t n French polcy toward the Communty.33 Economc decson-makng was vested ~ the hands of those lke Delors and Rocard convnced of the vrtues of conservatve economc polces and who beleved that France must work wthn Europe to acheve ts economc goals. Wth the advent n January 1984 of the French presdency n the Councl of Mnsters Mtterrand -true to the European dealsm he had espoused snce the 1940s but undoubtedly also 14

16 conscous of the poltcal advantage to be ganed by makng a vrtue out of necessty- announced a major dplomatc ntatve for a relaunchng of Europe...just a few months before the drect electons to the European Parlament.P' From that pont on the French Presdent played a decsve role n resolvng European dsputes. French leadershp and concessons helped to resolve the Brtsh agrcultural and budget dsputes and French negotators began to support nternal lberalzaton and collaboratve research' and development. Moreover Mtterrand began to promote procedural reform whch he defended wth rhetorc of European federalsm. He spoke of reconsderng of the Luxembourg compromse and supported procedural reform as long as t was lmted to the Councl and the Commsson and dd not mply a radcal democratzaton of EC poltcs. 35 Although commtted to usng the Communty to combat economc declne Mtterrand and the French government remaned uncertan whether monetary polcy nternal lberalzaton or cooperatve R&D should be the heart of the new ntatve. Thus Mtterrand wthout beng entrely sure where t was leadng became the prmary spokesman for relaunchng Europe. As one senor French dplomat observed drly: "Monseur Mtterrand's term as presdent of the European councl has become hs road to Da~ascus.36 Thatcher on the Road to Mlan Wth France converted to the European cause Brtan remaned the major obstacle an ntatve lnkng nternal lberalzaton and procedural reform. Brtan's entry nto the Communty n 1973 had expanded the Communty wthout strengthenng t. The nterstate bargan that brought the Brtsh n was the same as that offered the Germans n the 1950s--a defct n agrcultural sector n exchange for new opportuntes for Brtsh ndustry. nsofar as Thatcher was pro-european t was largely because she saw the Communty almost exclusvely as an organzaton for promotng economc lberalsm n the ndustral and servce sectors. By Brtsh standards however ths represented a consderable commtment snce the opposton Labour Party was opposed to both trade. 15

17 lberalzaton and to European ntegraton. Havng begun lberalzaton of telecom servces wth the Telecommuncatons Act of 1981 havng abolshed exchange controls n 1979 havng publcly promsed to lower European ar fares and last but not least beng fully aware that Brtan enjoyed hghly compettve bankng and nsurance sectors Thatcher partcularly favored the deregulaton of servces. 37 The Brtsh government also favored strengthenng European poltcal cooperaton although wthout an ndependent bureaucracy. The most mportant Brtsh objecton to Communty polcy stemmed from the heavy Brtsh defct from the Communty's Common Agrcultural Polcy (CAP). Brtan wth ts small effcent agrcultural sector concentrated n areas such as sheep husbandry not generously subsdzed by the CAP ganed lttle from agrcultural programs whch made up 70% of the EC budget. Thus Brtan found tself by far the largest per capta lltl contrbutor to the Communty budget. Thatcher's frugalty bolstered Brtsh opposton; when she entered offce she demanded "her" money back from the Communty. She nssted that two-thrds of the Brtsh defct over the past few years be rebated and that permanent adjustments be made to prevent future budgetary dsequlbra. EC agrcultural spendng would have to be lmted and redrected before the Brtsh would contemplate any other reforms. The Thatcher government lke most Brtsh governments before t was also! suspcous of strengthenng the Commsson or Parlament or expandng Communty competence nto areas not drectly connected wth trade such as ndrect taxaton and socal legslaton. Thatcher frmly opposed formal changes n Councl procedures as wel -n part out of an ngraned suspcon of wrtten consttutons common to most Englsh conservatves--but she was senstve to the need for more majorty votng. Hence she favored nformal means of encouragng majorty votng but opposed any treaty changes that undermned the prerogatves of natonal soveregnty that allowed the Luxembourg compromse to be nvoked n cases where a vtal natonal nterest was at stake.! 16

18 t s mportant to see that more was at stake n the Brtsh objectons than temporary budgetary mbalances. Up to that tme the Communty's substantve agenda had been shaped by the orgnal Sx and partcularly by France and Germany. n 1973 Brtan had been forced to accept the agrcultural and budget polces as part of the acgus communautare--the corpus of exstng Communty nsttutons. f Brtan had joned n 1957 and partcpated n subsequent negotatons the ~ surely would have..looked very dfferent and Thatcher's demand for juste retour--n the form of a mandatng that any naton's gans from the budget reman roughly proportonal to ts. contrbuton--was n effect a demand that Brtan be allowed to have ts say ex post ~. But for those who had worked for decades n the Communty and who saw the CAP as part of the ntal Franco-German bargan at the heart of the Communty the Brtsh demand called nto queston ts nsttutonal foundatons. As Claude Cheysson the French Foregn Mnster stated emphatcally n 1982 "the Unted Kngdom [seeks] juste retour whch s not a Communty dea. We and the Brtsh are not speakng of the same communty.38! The Brtsh barganng poston had one vulnerable pont however namely the threat that France and Germany would go ahead wthout Brtan. 39 As Brtan became' ncreasngly solated between the Fontanebleau meetng n February 1984 and the sgnng of the Sngle Act Mtterrand and Kohl repeatedly nvoked the threat to move toward a two-ter Europe ("Europe a deux vtesses") whereby those wllng to move ahead wth European ntegraton would conclude ther own agreements leavng behnd those who refused. Such an arrangement would have left Brtan wthout a say n the detals of the new agreements. The experence of the 1950s when Brtan refused to jon the Communty had demonstrated that ths course could be costly n the long-run. Twenty years later the Brtsh were stll tryng to reverse prortes set n ther absence. As Paul Taylor has observed: "Brtsh dplomacy...had to balance two objectves: that of satsfyng specfc nterests and that of stayng n the game. A measure of compromse n the former had become necessary to acheve the latter.40 Ths threat was manpulated wth' 17

19 great fnesse by Mtterrand but t was effectve largely because t was credble. n ths perod a flexble Communty had found a number of promnent exponents among European academcs and commentators and ntatves of ths knd had long been vewed favorably by the French especally n the area of hgh technology.f' V. Settng an Agenda for Europe; A Polcy Hstory of 1992 The decsve mportance of the shft n French preferences and the threat of excluson aganst Brtan became evdent n the course of the negotatons. 42 From the Heght of Europessmsm to the French Presdency n the early 1980s at the heght of "Europessmsm" the member states of the Communty were unable to resolve dsputes over agrcultural polcy and the accesson of Span and Portugal. deas of splttng the EC nto subgroups prolferated: "Europe adeux vtesses" "a two-ter Communty" "abgestufte ntegraton." Wth the excepton of the launchng of the ESPRT program n 1983 varous appeals by the Commsson and some member states for a renewed commtment to Europe came to nought. The most sgnfcant was the Genscher-Columbo ntatve of The talan and German foregn mnsters proposed wth support from the Commsson a "European Act" to relaunch European ntegraton through strengthened nternal market lberalzaton poltcal cooperaton harmonzaton of domestc laws and a number of other ntatves. " The ntatve fell on deaf ears n France where nterest n Europe was stll lmted to sporadc proposals for steps towards a socalst Europe and n Brtan where resoluton of the budget wrangle remaned a sne qua non for a relaunchng of the Communty. Andre Chandernagor the French Mnster for European Affars observed sarcastcally before the Assemblee Natonale that the other Europeans were tryng to buld Europe from the roof down. 43 The Councl dd set up an ad hoc workng group to look nto the proposal but when t reported back to the Stuttgart summt of June 1983 ts recommendaton dd lttle 18

20 more than codfy the status QUO. The Councl ssued a "Solemn Declaraton on European Unon" based on the ad hoc group's report whch reaffrmed n general terms the member states' desre to reenforce and develop both economc and securty cooperaton. t called for the completon of the nternal market alongsde numerous other proposals ncludng coordnated reflaton socal programs reenforcement of the monetary system and a European ndustral polcy. But there was no consensus for changes n decsonmakng procedures. Although the document was entrely rhetorcal consstng only of a suggeston that member states voluntarly abstan rather than nvoke the veto t nonetheless elcted mmedate proces-verbaux reaffrmng the Luxembourg Compromse from France and from the four more recent members--brtan Denmark reland and Greece. Shortly thereafter French Prme Mnster Perre Mauroy spoke out publcly aganst the Stuttgart Declaraton reassertng the veto rght. 44 Thus the only sold achevement of the conference was acceptance of the German proposal to lnk together four outstandng ssues n the Communty--an ncrease n Communty funds agrcultural reform nternal lberalzaton and the entry of Span and Portugal. Genscher hoped- n van--that all four could be resolved as a package at the Athens summt later that 45 year. The Turnng Pont: The French Presdency The turnng pont was France's accesson to the revolvng presdency of the EC n January 1984 less than a year after the moderate wng of the Socalst Party assumed power n France. Mtterrand's extraordnary personal nvolvement n the sx-month presdency prompted one French observer to call hm a "one-man orchestra."46 He began the year wth a personal tour of all the European captals to seek a consensus for relaunchng the Communty. Throughout 1984 he and hs foregn mnster Roland Dumas practced "shuttle dplomacy" between Pars Bonn and London. 47 Mtterrand gave a number of speeches most notably before the European Parlament n Strasbourg n May n whch he emphaszed the economc nature of the current crss and elaborated 19

21 a vson of the future European Communty as a way of combattng the economc declne! of Europe. "Europe" he warned "s begnnng to look lke ~n abandoned buldng ste." The speeches ncluded proposals for poltcal cooperaton technologcal programmes and! reform of CAP but two constant refrans were decson-makng and nternal market reforms. 48 The outlnes of an nterstate bargan were becomng clear. Bonn and London were agreed on the need for lberalzaton wth weak support from Pars whle Bonn and Pars were agreed on procedural reform wth weak support from London. But Mtterrand's plan to resolve these ssues by callng a conference to "preserve Europe" was blocked by the longstandng dsputes over fxng the Brtsh compensaton reformng the CAP concludng the negotatons on enlargement and augmentng EC resources. Wthn a year however each of these ssues had been dealt wth n each case largely due to ' an unexpected French wllngness to compromse.t? The frst steps were taken n early 1984 the French government put ts farmers on notce that France would no longer unquestonngly support ther nterests n Brussels. "The revtalzaton of agrcultural polcy" stated Mchel Rocard then Mnster of Agrculture '.'can no longer serve as the nstrument of European unfcaton."! Under Rocard's drecton a compromse was reached n March 1984 whch marked the frst steps toward brngng agrcultural spendng under contro1. 50 Agrcultural dsputes were also at the heart of the enlargement ssue. Farmers n Southern France threatened by the sudden mportaton of cheap vegetables and wne from Span and Portugal had long encouraged the French government to stall. These conflcts manfested themselves through threats and counterthreats over the budget. EC fnances were overextended so much so that a decson was taken n October 1983 to delay payments under CAP for lack of funds. Germany's had nssted at Stuttgart that Span and Portugal enter by the end of 1985 and threatened to block ncreases n Communty fundng untl the enlargement ssue ~as settled. Thatcher also promsed to block any such ncreases untl the budget ssue was resolved. France whch 20

22 had opposed ncreased fnancng but reversed ts polcy n md-1983 after the pro- European turn was thus under tme pressure. Mtterrand announced that he would complete the negotatons by September 1984 and from that moment tme began to work n favor of an agree~ent.51 But the Brtsh budget ssue appeared as ntractable as ever. At Brussels n March 1984 French negotators tabled a seres of concessons agreeng for the frst tme that the Brtsh net contrbuton should be cut permanently and should reflect Brtan's lower per capta ncome. But France also kept up the pressure by jonng taly n blockng the Brtsh rebate for 1983 whch totalled L 457 mllon. Thatcher consdered retalatng by blockng the Brtsh budget contrbuton for 1984 but was reportedly dssuaded by Cabnet opposton and by the fear of losng a challenge before the Brtsh or European courts. (Brtan dd delay payments of an emergency levy requested by the Commsson.)52 The heads of government agreed to a system for lmtng future agrcultural spendng that would keep any growth n Brtsh contrbuton roughly n lne wth ts percentage of Communty GOP but the budget rebate for 1984 and followng years remaned unsettled wth the others offerng ECU bllon and Thatcher demandng ECU 1.5 bllon. After days of face-to-face hagglng by heads of government a deal at ECU 1.2 bllon seemed all but made. Brtsh offcals were draftng a communque announcng the success when t was blocked by Kohl's sudden refusal to pay Germany's share of any sum larger than ECU bllon. Hs unexpected stubbornness grounded the negotatons leavng an angry Thatcher the scapegoat.53 After the Bruxelles meetng Mtterrand ncreased the pressure on the Brtsh by nvokng the threat of a two-track Europe. He called for a conference to dscuss relaunchng the Communty among those member states would "stand up and be counted." n hs May speech to the Parlament he spoke frankly about the possble need for a Europe "a geometre ~arable." Dumas announced that f a budget agreement was not reached hs government would call a meetng wthout the Brtsh to dscuss varous ' 21

23 proposals and boldly rased the possblty of a two-track Europe durng Thatcher's vst to the Elysee. For hs part Kohl spoke out n favor of takng a "decsve step" toward greater European unty wthn a year whether or not all countres agreed. The Brtsh press pcked up the theme and a Brtsh parlamentary report called for a more conclatory negotatng poston to head off the excluson of Brtan from future European ntatves.54 The Perod of Crss: Fontanebleau. the Dooge Commttee and Mlan n the weeks leadng up to the Fontanebleau summt of July 1984 Thatcher seemed sobered by the experence at Brussels. She exhbted a new postve sprt quetly crculatng a paper enttled "Europe: the Future" outlnng her government's vson for relaunchng Europe. At the head of the lst of prortes was the lberalzaton of the nternal market as foreseen n the Treaty of Rome stressng the deregulaton of servces. Brtsh Foregn Mnster Howe called for the removal of "all--and mean all economc barrers" suggestng 1990 as a deadlne. These proposals were quetly supported by France. "Europe: the Future" also addressed the decson-makng ssue callng for majorty votng to be respected where the Treaty provdes for t. Natons should be able to veto "where a very mportant natonal nterest s at stake" but "should be requred...to set out ther reasons fully" before the other Councl members. 55 t has been argued that Mtterrand choreographed the Fontanebleau summt n order to remnd Brtan of the possblty of a "two-track" Europe. The openng for example was delayed for two hours. Heads of government cooled ther heels whle Mtterrand "confessed what The Tmes...descrbed n scoffng tones as hs 'dreams of Europe.".s6 Whatever the cause Thatcher was more conclatory than she had been at Brussels. The decsve ssue whch took more than a day-and-a-half to resolve was agan the sze of the Brtsh rebate. A compromse was fnally reached at a fgure roughly equvalent to what the Brtsh had been offered (and had rejected) n Brussels wth the French assumng a szable porton of the burden. Moreover the Councl agreed 22

24 to generalze the prncple of juste retour to payments nto the budget: no member state should be requred to sustan a "budgetary burden whch s excessve n relaton to ts relatve prosperty."5? t was at ths pont at the latest that the Councl began to develop clear momentum toward nternal market lberalzaton. The heads of state called for a package of nternal lberalzaton coordnated stmulaton and collaboratve research desgned to gve the Communty "an economc mpulse comparable to that gven by the Common Market n the 1960s." t was further agreed to abolsh customs controls at some future date. Mtterrand also sought agreement on expandng majorty votng but due to lack of tme he settled for the creaton of two commttees. The frst the Ad hoc Commttee on a People's Europe (later the Adonnno Commttee) receved a mandate to nvestgate those aspects of the Communty whch are drectly vsble to the common ctzen: customs formaltes for ndvduals equvalence of unversty dplomas the creaton of European symbols and European volunteer programs. The second and ultmately far more mportant commttee the Ad hoc Commttee for nsttutonal Affars (later called the Dooge Commttee after ts rsh charman) had a mandate to consder nsttutonal poltcal ~nd economc reform. The symbolc sgnfcance of the commttee was enormous. Accordng to the Fontanebleau communque t was to be set up on the lnes of the "Spaak Commttee" the group formed n 1955 by the Councl of the European Coal and Steel Communty (ECSC) to develop proposals for the "Relance Europeenne" of that decade. The Spaak Commttee proposals eventually led n 1957 to the sgnng of the Treaty of Rome and the foundng of the European Economc Communty.58 At ther summt meetng n Saarbrucken shortly after Fontanebleau Mtterrand and Kohl renewed the threat of a two-ter Europe (as well as demonstratng the serousness of the Franco-German nterest n nternal market reform) by enterng nto negotatons over the abolton of all controls on normal goods traffc harmonzaton of 23

25 domestc veternary and santary legslaton free movement of people common streamlned admnstratve procedures and eventual accesson to the Benelux customs unon. Ths would create a "super EEC" among the fve states. The Benelux countres assented n late October 1984 and a memorandum settng out objectves was approved n 12 December Mtterrand sgnalled grand ambtons for the Doege Commttee by appontng Maurce Faure a strong pan-european and a sgnatory to the Treaty of Rome as hs representatve. Faure clearly had Mtterrand's personal support and he arrved at the second meetng wth a proposed draft report reportedly approved by Mtterrand hmself over the objectons of the Qua d'orsay t soon became clear that whle the member states dffered over poltcal cooperaton monetary polcy defense and procedural reform all (possbly exceptng Greece) were n substantal agreement about the need for nternal market lberalzaton. On detaled ponts of nternal market polcy the report contans many Brtsh proposals such as common EC standards lberalzaton of transport servces open publc procurement and common market n nsurance. Though the Commttee devoted most of ts tme to procedural reform whch t vewed as ts "real task" t was unable to agree on the decsve ssues of majorty votng and veto rghts. The Brtsh delegaton came expectng to fnd themselves comfortably located n the center of the spectrum on procedural Questons alongsde France and perhaps Germany. But France joned Germany n sgnalng ts wllngness to accept majorty votng on nternal market ssues and whle droppng ts earler support for a completely rewrtten Treaty of European Unon was favorable to amendments. n the end seven of the ten member states were wllng to renounce the Luxembourg compromse and expand majorty votng through treaty changes; Brtan Greece and Denmark stuck by the Brtsh program reassertng the rght to veto when "very mportant natonal nterests" are at stake and acceptng only the voluntary nformal steps to encourage majorty votng already acknowledged n the Stuttgart Declaraton. 24

26 The majorty of seven also called for an ntergovernmental conference to negotate a draft treaty of European Unon. 60 As the Dooge Commttee delberated t came tme for a new European Commsson and above all a new Presdent of the Commsson to be named. Domestc coaltonal poltcs prevented Germany whose nformal turn t was from nomnatng a sutable canddate for Presdent. On the other hand Davgnon the self-nomnated frontrunner lacked natonal poltcal experence was consdered by some to be an nsuffcently nsprng leader and was ted to nterventonst economc polces. The French and German governments concerned about the progress of the "relance europeenne" pressed for a Presdent from a large country to gve the job poltcal status. Delors freed just n tme by a mnsteral reshuffle n France was nomnated at the last mnute by Mtterrand.. Hs stature as a poltcan wth senor mnsteral experence hs years as a member of the EC Economc and Socal Commttee and hs reputaton for sensble economc polcy-makng led Germany and Brtan to sgnal ther approval mmedately but Thatcher nonetheless quckly took the precauton of namng Lord Cockfeld--a strong canddate wth Cabnet level experence despte press commentary to the contrary-vas a lberal counterweght.p" Delors got to work quckly. He dstrbuted portfolos to hs fellow commssoners--usually the occason for extended hagglng--wth unprecedented swftness. 62 He detected the emergng European consensus for lberalzaton and n hs maden speech to the European Parlament delvered wthn two weeks of comng nto offce he set the deadlne of 1992 for ts completon alongsde contnued monetary ntegraton and reform of decson-makng n the Councl of Mnsters. At the Luxembourg summt of March 1985 France and Germany unveled an ntatve to support the Dooge Report and relaunch the Communty by lmtng the Luxembourg compromse extend EC competence n foregn affars and completng the nternal market. 63 n response the Councl requested the Commsson to develop a detaled tmetable for completng the nternal market--a task assgned to Lord Cockfeld. 25

27 n the last days of June 1985 wth the Mlan summt scheduled for the followng month proposals began to multply. From the Commsson came Delors' plan for doublng EC research and development fundng and Lord Cockfeld's Whte Paper. Cockfeld construed the Councl mandate to draft proposals for lberalzng the nternal market broadly; he ncluded nearly 300 measures ncludng VAT harmonzaton and mutual recognton of regulatons.p" n hs publc statements Delors ted together nternal lberalzaton and majorty votng stressng that the frst was mpossble wthout the second. The Brtsh government feelng that t was beng margnalzed and hopng to channel momentum away from amendments to the Treaty of Rome launched a counteroffensve to the Dooge Report based on ts prevous plan for nternal market reform and "gentleman's agreements" to abstan rather than nvoke the veto. Ths proposal now ncluded two new elements: voluntary restrant n nvokng the Luxembourg compromse at lower levels of the Councl once the chefs of state had set an objectve and a separate treaty codfyng prncples of nformal poltcal cooperaton. 65 taly rejected the Brtsh procedural proposals outrght callng them poltcally and legally nadequate. Separate statements by France and the Benelux advocated broad economc reform and a return to majorty rule as set forth n the orgnal Treaty of Rome. On poltcal cooperaton the French and Germans evdently concerned about the Brtsh havng stolen ther publcty quckly pasted together ther own draft treaty on poltcal cooperaton. t repeated entre segments of the Brtsh proposal but wth small changes: the creaton of a "Secretary-General of the European Unon" to manage poltcal cooperaton and stronger rhetorc about the role of the European Parlament.P'' At Mlan the Brtsh proposal on nformal mprovements to decson-makng was mmedately accepted but only as a startng pont. Genscher sought to acheve a more ambtous agreement by proposng a compromse based on a "return to the decsonmakng procedure whch exsted before the so-called Luxembourg dsagreement" majorty votng on nternal market ssues and nformal agreement to abstan from nvokng the 26

28 veto. Ths was submtted to the heads of government but some--presumably ncludng Thatcher--found renuncaton of the Luxembourg compromse unacceptable. The text along wth some amendments suggested by the Brtsh was rejected. 67 At ths moment talan Foregn Mnster Andreott--skeptcal of mere declaratons of ntenton and anxous to avod a falure under the talan Presdencyv-unexpectedly called for a majorty vote to convene an ntergovernmental conference under Artcle 236. Germany taly and the Benelux countres mmedately supported the measure France and reland hestatngly joned them whle three natons--brtan Denmark and Greece--remaned opposed. Brtsh protests (on procedural grounds) aganst majorty votng were rejected and the conference was called. 68 Thatcher returned from Mlan n a fury but allowed herself to be persuaded that Brtan should attend the Conference. The reasons were vared. Frst Brtan had lttle to lose from majorty votng on the nternal market programme whch t favored n general and n whch there were relatvely few areas where Brtsh nterests could be placed n jeopardy. n other areas t was assumed reform proposals were smply rhetorcal. Nor were the Brtsh deaf to Delors' constant remnders throughout 1985 that procedural changes were needed to assure mplementaton of the nternal market plan.! Second the procedure 'for amendment under Artcle 236 (as opposed to negotaton of a new treaty) offered two advantages to the recalctrant: t excluded the Parlament and t requred unanmty. No government could be excluded from the fnal decson. Thrd Mtterrand contnued to feed speculaton about a two-tered Europe callng the decsons at Mlan ta test of truth." Faced wth the threat of excluson the prorty n Brtsh dplomacy was to preserve ts power of veto over the shape of the agenda. The only way to do ths was to attend constructve role. 69 the conference where Brtan played a skeptcal but ultmately 27

29 The nter20vernmental Conference: Vctory for the Mnmalsts A draft of the Sngle Act was wrtten durng the frst month of negotatons the remanng detals were worked out between the foregn mnsters and heads of state at fve meetngs between 21 October and December and the document was sgned n February The speed and success of the negotatons whch resolved most of the central ssues wthn the frst two months can be explaned n large part by the actve role played by the Commsson led by Delors. n part ths support was smply logstcal; the Commsson proposed and revsed texts and managed Quetly to slp some new ssues nto the treaty such as R&D and envronmental programs. But more mportantly n late September and early October Delors proposed lmtng nsttutonal reform to nternal market polces and tyng the program to a massve ncrease n structural funds necessary to gan the support of Greece and other Southern European countres. Ths compromse helped convnce Brtan to accept lmtatons on the rght of natonal veto. The substance of the Sngle Act negotatons s perhaps best nterpreted as a " process of lmtng the scope and ntensty of reform--a process necessary to gan the acceptance of Brtan but also of other member states who when t came to actually sgnng a treaty proved Qute jealous of ther soveregnty. n ths process the goals of the "maxmalsts" who favored broad procedural and substantve reforms were progressvely sacrfced n favor of those promoted by a "mnmalst" program lmted to those changes necessary to lberalze the nternal market. The lmtatons negotated by the ntergovernmental Conference took place n three stages: frst the negotators contnued the trend evdent snce the Dooge Commttee toward excludng from any sgnfcant commtments all areas of cooperaton not drectly connected wth the nternal market; second they blocked the extenson of majorty votng to a number of contentous nternal market ssues such as fscal and socal regulaton; and thrd they offset the mplct suppresson of the veto wth generous exemptons and safeguard provsons regardng the harmonzaton of nternal legslaton. 28

30 Lmtng the ScoDe of Substantve Reform The frst task faced by negotators was to lmt the scope of substantve reform: The Sngle Act followng the Whte Paper contaned enablng legslaton for the lberalzaton of fnancal nsurance busness professonal communcatons and transport servces publc procurement the movement of people exchange polces and captal movements; the elmnaton of admnstratve and techncal barrers; and the harmonzaton of do~estc legslaton?' At the same tme however the negotators reduced all mportant commtments n areas other than the nternal market to a mnor or symbolc level. n each case the lack of a consensus among the major member states prevented reform. Monetary Polcy: A more closely coordnated monetary polcy ted to the ECU as a common currency had long been a personal nterest of Delors. A "certan monetary capacty" for the Comnunty was stressed n Delors' openng speech to the Conference: The Commsson's proposals codfed the exstng European Monetary System wthn the treaty and made future development toward a common monetary fund subject to unanmous approval of those who choose to partcpate--a "two-track" proposal would have allowed a some countres to go ahead on ther own. France taly and others felt that even ths proposal was too weak but Germany Brtan and the Netherlands opposed any menton of monetary polcy at all. Germany and the Netherlands consdered that freedom of captal markets and coordnated economc polcy must precede any consderaton of further monetary coordnaton and Thatcher felt that Brtan whch does not partcpate n the exstng exchange-rate mechansm of the EMS should not surrender any soveregnty. Delors' attempt to push the ssue was curbed shortly after the openng of the conference by an nformal meetng of the Mnsters of the Economy and of Fnance who nssted that they be consulted before any monetary proposals were made to the conference. n n the face of Anglo-German opposton only strong Franco-talan pressure backed by the Commsson kept the ssue open for dscusson past the openng 29

31 sessons of the meetng. When Germany and Brtan lost patence and threatened to te any monetary agreement to the complete lberalzaton of captal markets by the end of 1986 the others quckly agreed to a compromse that ncluded no concrete steps beyond exstng polces. Reference to eventual monetary unon was ncluded n the preamble to the revsed treaty but so was language lmtng the EMS to ts present functons. 73 The Commsson proposals permttng a "two-track" monetary system were rejected. Moreover the SEA by placng the EMS under the unanmty rule of Artcle 236 grants Brtan a naton that does not partcpate n the exchange rate mechansm. veto power over ts future evoluton. Ths has led some to argue that progress toward monetary unon "seems lkely to be checked rather than encouraged." The most one can say s n Delors' words that the revsed treaty makes "allowance for [ther] evoluton when ths becomes necessary."74 Poltcal Cooperaton: The poltcal cooperaton provsons of the Sngle Act were placed n a separate "self-supportng" secton whch reflects a compromse between Brtan reland and Denmark (supported by Greece) who preferred a complete separaton between nternal market lberalzaton and poltcal cooperaton and the others who wanted a sngle ntegrated document. All the proposals n ths area (one each from Brtan France and Germany taly and the Netherlands) dd lttle more than to codfy the structure of nformal European Poltcal Cooperaton that had developed snce The Franco-German proposal for a poltcal "Secretary-General" of Europe was rejected by the others even taly. The Sngle Act creates no supranatonal nsttutons-vbeyond a small admnstratve secretarat unconnected wth the rest of the Communty--to handle poltcal ssues. Other dfferences concerned only the language wth whch poltcal cooperaton s descrbed. Although the stronger language was generally chosen-> ncludng for example securty under Communty concerns--t remans essentally a rhetorcal exhortaton not a substantve ntatve. 7S Structural. Socal Envronmental and Technology Polces: Essental to the passage of the nternal market program was the expanson of structural funds amed at 30

32 poorer regons of the Communty--the so-called "convergence polcy." Ths provson was necessary not because t was an essental element of economc lberalzaton as the Commsson at tmes clamed but because t was the poltcal prce of support from Greece reland and Portugal. The rcher countres were hestant to pay more but n the end t was agreed that regonal structural and development funds would be "sgnfcantly ncreased n real terms wthn the lmts of fnancal possbltes"--a phrase that lad the foundaton for a massve ncrease n transfers approved n On socal polcy Brtan's prncpled opposton to polcy drected from Brussels and the lack of consensus between France and Germany precluded any strong statement. A Dansh programme for economc stmulaton n tmes of unemployment and a halfhearted French ntatve to ncorporate a socal dalogue wthn the Communty were blocked whle a broad mandate for envronmental polcy and R&D programs suggested by the Commsson wts replaced wth mnmal commtments.p The Commsson supported by Denmark proposed an extensve program of envronmental regulaton--an area where t had not prevously been actve. The member states sharply curtaled the lst of areas for nterventon and the unanmty rule was retaned at least for the moment. The new R&D capabltes of the Communty developed under ESPRT RACE and other programs of the early 1980s were brought under the treaty but any decsons on the "framework" and fnancng of these programs contnued to requre unanmous consent. Other ssues such as cultural polcy human rghts development ad and energy were dropped for lack of tme. 77 Lmtng the Scope of Procedural Reform Havng dsmssed from the agenda all areas of potental substantve reform other than the nternal market the second step taken by the negotators was to strctly lmt the powers of the Parlament and the applcaton of the potent combnaton of the "new method" of qualfed majorty votng and mutual recognton wthn ths area. Ths ssue that requred the most tme durng the ntergovernmental Conference and was the 31

33 last to be resolved ultmately requrng requred the nterventon of the heads of government. 78 The Powers of the Parlament: France Brtan and others easly blocked Germany's publc proposals for strengthenng the Parlament. Even Germany however favored a much smaller parlamentary role than had been envsaged n the Crocodle proposals. To be sure the Sngle Act does grant the Parlament a new role n Communty decson-makng whereby any pece of legslaton accepted by the Councl by majorty vote and rejected by the Parlament must subject to the decson of the Commsson be approved agan by unanmous vote. But the condtons under whch ths provson would be decsve are unlkely to arse very often. Nonetheless some member states felt that even ths granted the Parlament too much power or who felt that any powers granted the Parlament to be taken from the Commsson.Y Majorty Votng and the Veto: The orgnal Treaty of Rome already mandates qualfed majorty votng for certan aspects of nternal market polcy as well as some agrcultural ssues and a number of other areas. At the ntergovernmental Conference the member states generally agreed to lmt further extensons of majorty votng to nternal market ssues. The Commsson's proposal retaned the unanmty rule only on treaty ssues and ssues nvolvng on the movement of people but ths broad reform was opposed by all three major countres. n he end majorty votng was not extended to fscal harmonzaton the movement of people or the mutual recognton of agrcultural regulatons. (Fscal polcy was ntally exempted from any mplct tme lmt but at the last mnute t was ncluded under the actons to be completed by 1992.) n exchange for the power of proposton on the external tarff the Commsson agreed not to block Councl demands for modfcatons. Brtan nssted that natons have the rght to apply ther own regulatons concernng occupatonal safety and the rghts of workers (ncludng worker partcpaton)--an ssue ntally ncluded n order to wn over the recalctrant Danes. At the last mnute however Brtan accepted majorty votng on ths ssue gven that the proposals dd not affect small and medum enterprses. The Brtsh and rsh 32

34 governments succeeded n mandatng unanmty rule on matters concernng anmal and plant health. Natonal prerogatves were protected n matters of mmgraton from thrd countres crme and t~rrorsm and commerce n arts and antques. 80 Safeguard Clauses and Exemptons to Mutual Recognton The thrd step taken by the ntergovernmental Conference to lmt the Sngle Act nvolved negotatons over the exact method for applyng the mutual recognton clauses. Under the Commsson's ntal proposal the mutual recognton provsons would have come nto force automatcally at the end of 1992 but ths was rejected by the member states along wth all other efforts to gve the date 1992 legal status. nstead the Commsson s mandated to examne the legslaton and regulatons n each member state startng n 1992 to determne whether they consttute obstacles to trade and to propose varous "equvalences" f they do whch would then be subject to Councl approval by qualfed majorty. Ths s perhaps the most far-reachng extenson of Communty power: begnnng n 1993 a qualfed majorty of the Councl actng on the Commsson's recommendaton can demand that recalctrant member states recognze foregn regulatons as bndng on mported goods and more sgnfcantly on foregn frms operatng n ther terrtory.81 All member states agreed on the need for exemptons and safeguards. Germany backed by Denmark called for a de facto veto rght regardng propostons that! forced any state below what t consders a mnmally acceptable "qualty of lfe." such clause was ncluded n the SEA but two provsons that move far n the same drecton were. Frst the Commsson agreed to consder "elevated" standards of publc' health and safety envronmental and consumer protecton n the more advanced states as bndng. Second a wde-rangng safeguard clause based on [he preexstng Artcle 36 allows derogatons from applyng the mutual recognton provsons for the protecton of: publc moralty order and securty of natonal treasures and propretary materals as well as health safety envronmental concerns and consumer protecton. 82 No 33

35 The negotators delberately avoded dscussng the Luxembourg Compromse or the procedures for callng a majorty vote. nstead the veto rght was mplctly transformed nto Artcle 100(4) of the Sngle Act whch permts natons outvoted n the Counclor wshng to nvoke a safeguard clause to retan ther domestc regulatons for reasons of "exgences mportantes" under Artcle 36. f they do so however they must nform the Commsson whch then determnes whether t~e measures consttute an arbtrary form of dscrmnaton or a dsgused restrcton on commerce rather than a legtmate case of derogaton. The Commsson or any government that beleves a naton has abused the safeguard clause may seek relef before the European Court usng a specal accelerated procedure. Ths clause shfts the locus of conflct over the veto from the ratfcaton by the Councl to ts mplementaton by each naton. And the ultmate arbter has changed: t s now the Court and the Commsson--not the member states as under the Luxembourg compromse-vthat ultmately determnes what consttutes proper justfcaton for exemptng a state from a Communty decson. 83 At the Luxembourg summt of December the heads of government resolved the fnal dffcultes over the revsed treaty. The ratfcaton of the amendments was unproblematc although t was delayed by Denmark whch had to fulfl consttutonal oblgatons to hold a referendum and by taly whch crtczed the draft for not gong far enough. n the wake of the Luxembourg summt Kohl and Mtterrand stated--though perhaps only for posterty--that they would have been prepared to go further on the powers of the Parlament and monetary polcy respectvely as well as on majorty votng. talan Prme Mnster Crax voced doubts that the Sngle Act ncluded enough of the maxmalst agenda and promsed support for the SEA only f the European Parlament approved t. Thatcher by contrast haled the results as "clear 'and decsve." roncally though predctably (gven the lowest common denomnator barganng characterstc of systems change n the Communty) the fnal agreement on substantve ssues came closest to satsfyng the Brtsh. The outcome of the agrcultural budget negotatons for 34

36 example reflected the other member states' acknowledgement of the legtmacy of the Brtsh clam to reshape the acgus communautare n fundamental ways as well as changes n the perceptons of France whch came to see lmts on agrcultural spendng -as long as t appeared to be due to the demands of others-vas n ther nterest. Tme and tme agan n negotatng the SEA the Brtsh got ther way on substantve and procedural ssues--only n part because the commtment of other countres turned out to be weaker than ther rhetorc--untl the fnal draft looked very much lke the plan for elmnatng all barrers to trade that Geoffrey Howe had called for n early n the areas where the Brtsh government favored reform such as lberalzaton of servces trade majorty votng was secured. Elsewhere t was lmted. Although Brtan dd not succeed n blockng treaty revsons altogether ts negotators dd succeed n preventng an explct revocaton of the Luxembourg compromse. We cannot know for sure how far the French and Germans would actually have been prepared to go to carry out the threat of a two-ter Europe but certanly they are now hampered from dong so by the SEA partcularly n monetary polcy.84 V. nterpretng the Negotatons The case study offers consderable support for the predctons of the neorealst regme theoretcal model. The Sngle European Act was negotated by heads of government and ther drect representatves apparently wthout a great deal of publc debate or nterest group actvty. t s the largest states whose ntatves and objectons appear to have shaped the fnal agreement. The mportance of French German and Brtsh preferences s also demonstrated by the lack of any case--wth the possble excepton of the Dansh stand on workers' rghts--of a sngle smaller naton ether ntatng or vetong an mportant ntatve. The Southern natons and reland were appeased en masse wth the promse of ncreased structural funds; the Benelux countres would have been prepared n any case to go further. 35

37 The preferences of the large states reflected structural economc nterests the polcy preferences of the party n power and the vews of the head of state. Structural economc nterests--german ndustral compettveness and Brtsh comparatve advantage n servces (ted to a small agrcultural sector)--explan some of the postons taken. But the nstablty of conceptons of the natonal nterest suggest that natons were guded by more than world market poston or ncremental changes n nterest group nfluence. nstead the success of the negotatons reflects above all the fact that n the md-1980s for the frst tme n more than a decade the partes n pow~r n the three major states were deologcally commtted to lberal economc polces and though to varyng degrees and for dverse reasons to Europe. n each case the party facton n power was decsve: Had the Labour Party been n power n Brtan or ether the Gaullsts or left-wng Socalsts n France the Sngle European Act would have be~n unthnkable. Moreover there was consderable room for ndvdual leaders to nfluence the outcome. The commtment to federalsm--or lack thereof--on the part of European heads of government clearly played an mportant role as the decsve mpetus gven by the French presdency (as well as the opposton of Thatcher) demonstrate. Both leaders repeatedly overruled ther technocrats. The SEA represents the mnmum common denomnator of French German and Brtsh preferences at the tme except on ssue of treaty amendments to promote majorty votng and suppress the veto where the Brtsh yelded to Franco-German! pressure to convene an ntergovernmental Conference n part because they saw t as a means to attan market lberalzaton and n part because the Franco-German demand for consttutonal reform was backed by the threat of excluson. The steady narrowng of the fnal agreement to a "mnmalst" poston that restrcts majorty votng to nternal market polcy and thus hampers future spllover to areas lke monetary polcy suggests the endurng mportance of natonal nterests and concerns about soveregnty.! 36

38 Assessna Neo- Functonalsm n contrast the process by whch the Sngle Act was adopted does not support the neo-functonalst vew that pressure from the European Parlament multnatonal busness nterests and the Commsson was decsve. The European Parl1ament: The evdence suggests that the Sngle Act dd not result from the pressure or momentum generated n Communty nsttutons. From Fontanebleau on parlamentarans were delberately and systematcally excluded from negotatng process. One of the Dooge Commttee's frst actons was to reject the Draft Treaty on European Unon as a startng pont and wth t the procedure of submttng! changes n Communty procedures drectly to the Parlament and to negotate from a French draft nstead. 85 These reformulatons were not merely cosmetc. The representatves felt that the Parlament's proposals were too open-ended ("real reform...requres a treaty encompassng all Communty polces and the nsttutons needed to mplement them") too' democratc (the powers of the European Parlament should be "extended to new spheres of actvty") and too automatc (the European Parlament draft treaty would have gone nto effect wthout unanmous approval).86 The ntergovernmental Conference followed the same polcy. Maxmalst pressure n the Crocodle Group the Draft Treaty of European Unon and the Adonnno Commttee to transfer power from the Councl whch was seen as neffcent and beholden to natonalst nterests to t'he Parlament faled utterly. The Parlament's nearly contnuous protests aganst the em!asculaton of the ntatve and ther excluson from the "real partcpaton" n the dscussons were gnored. 87 The Parlament overwhelmngly passed a resoluton crtczng the Sngle Act whch "n no way represent the real reform of the Communty that our peoples need."88 Multnatonal Busness nterest Groups: The nternal market programme lke : the European Economc Communty tself thrty years prevously appears to have been launched despte the apathy or opposton of major European and natonal busness nterest groups.89 t s dffcult to assess the amount of behnd-the-scenes pressure but ' 37

39 f publc statements are any ndcaton the major busness nterest groups n Europe or n the leadng member states dd not take strong stands untl 1985 by whch tme the support for market lberalzaton and (n all countres except Brtan) for majorty votng was evdent. Almost no groups rased procedural ssues. On market lberalzaton the Kangaroo Group remaned relatvely small untl after the 1992 ntatve was launched and establshed no formal lnks wth the Councl untl The Roundtable of European ndustralsts strongly represents non-ec European busness and was therefore based n Geneva rather than Brussels where t dd not move untl 1988 upon Dekker's accesson to ts presdency. Before 1985 ts work focused manly on European nfrastructure projects lke the Channel tunne1. 90 By the tme Dekker delvered hs oftquoted speeches nearly a year after the start of the path-breakng French presdency the work of the Dooge Commttee was nearly complete and the member-state support for nternal market lberalzaton and more majorty votng (except n Brtan) was fxed. To be sure a few busness nterest groups such as UNCE had been pushng vanly for lberalzaton for a long tme. But what needs to be explaned s why governments fnally lstened. Delors and the Commsson: There s no doubt that Jacques Delors s an extraordnary poltcan. But as we have seen the essental breakthrough toward the relaunchng of the Communty had already been made by the tme Delors entered offce. (ndeed hs actons as Fnance Mnster of France may well have contrbuted more to the Sngle Act than hs actons as Presdent of the Commsson.j'" Delors' most mportant contrbutons as Presdent resulted from keen awareness of the extreme constrants under whch he was actng. Hs judgment despte hs own long-tme attachment to European monetary cooperaton that only nternal market lberalzaton could gan a consensus s characterstc of hs dstnctve poltcal genus whch les n hs ablty to temper hs pan-european dealsm wth poltcal realsm. Ths gave hm the flexblty needed to gude the Communty through the negotatons.v 38

40 The ntal draft amendments submtted by the Commsson to the ntergovernmental Commttee were maxmalst (except on the powers of the Parlament) a fact whch hardly lends credence to Delors' clam that he foresaw all n January On the other hand ths crtcsm may underestmate Delors' skll n settng the agenda -the major source of Commsson power--where aggressveness dd pay dvdends. Cockfeld and Delors tossed many proposals out on the table n the course of Some were successful such as the Commsson decson to expand the Whte Paper to nclude as many ssues as possble. But even more mportantly Delors knew when to compromse. That tme came n late September and early October 1985 when he fnally dropped strong support for monetary and socal reform and stressed nstead the lnkages between nternal market reform majorty votng and convergence polces. 93 On balance then Delors and Cockfeld helped on the margn to broaden the 1992 ntatve and they certanly contrbuted decsvely to the remarkable speed of decson-makng at the ntergovernmental Conference. But on the general shape of the ntatve they had lttle room to maneuver. The fundamentals were proposed negotated and approved by heads of government. None of these three varables--nsttutonal momentum supranatonal nterestgroup actvty and leadershp at the Commsson--seems to account for the tmng and content of the Sngle Act. Ths calls nto doubt the long term hstorcal predcton of underlyng neo-functonalst arguments namely that over tme the poltcal processes of ntegraton be facltated by changes n the roles of actors and organzatons. Perhaps the most strkng aspect of the SEA negotatons n ths regard les n the parallels to the stuaton n the early 1950s when the ECSC was founded. Even regonal ntegraton theorsts are nclned to accept that the ntal foundng of the ECSC was an extraordnary act of poltcal statesmanshp but contend that once t occurred t sparked a qualtatvely dfferent and potentally self-sustanng process of spllover. The negotatng hstory of the Sngle European Act however suggests that thrty-fve years later the factors that encouraged further commtments to the Communty appear to have remaned essentally 39

41 the same--natonal economc nterests the pro-european dealsm of heads of government and the decsve role of the large states. The Domestc Roots of nternatonal Ree;mes The mportant role n relaunchng the EC played by power and nterests rases a fundamental theoretcal problem n studes of nternatonal cooperaton more generally namely the locaton of the "theoretcal dvdng lne" between nee-realsm and neofunctonalsm. Under what condtons does each apply? n response to ths queston. there are at least three competng approaches. The frst and smplest theory s that all barganng wthn the Communty even the most mundane reflects power and natonal nterests and s thus best explaned by the neo-realst regme theoretcal model. A neo-realst explanaton of ths knd s clearly dstngushed from a neo-functonalsm one by the fact that the development of nterests s treated as an exogenous factor wth respect to the ntegraton process tself. Wthout exogenous shocks the ntegraton process would naturally slow to a halt and reman n a poltcal and nsttutonal equlbrum. Clams about a self-sustanng process of ntegraton are n ths vew smply false. Such an explanaton mght begn by tracng the way changes n economc nterests regnng economc paradgms or poltcal allances on ether a natonal regonal or global scale work ther way nto nterstate bargans whch are then negotated between the major states. 94 t dfferently. A second approach would attempt to vndcate neo-functonalsm by specfyng Neo-functonalst theory asserts that classcal dplomacy s beng! supplanted by factors actng "above" and "below" the naton-state. Rather than focusng on factors above the state--systemc dynamcs supranatonal actors and the formaton of multnatonal nterest-groups--as was done n ths artcle analysts mght vew ntegraton as a process takng place exclusvely below the state and consstng entrely of domestc changes n atttudes values expectatons nsttutons and nterests. 95 Accordng to ths domestc neo- functonalst vew ntegraton s self-sustanng because t alters the nterests 40

42 and deas of domestc actors so as to promote further ntegraton. Whle ths artcle presents some evdenceaganst ths vew--partcularly regardng the mportance of sudden changes n polcy as a' response to changes n party coaltons--t cannot be ruled out. Some versons of ths hypothess mght offer a way of reconclng neo-realst regme theory and neo-functonalsm by usng the former to account for state nterests and the later to explan the resultng barganng outcomes. 96 A thrd approach (and another possble method of reconclng the two theoretcal tradtons) s to post the exstence of a fundamental dstncton between the "extraordnary poltcs" of systems change n whch long-term ntergovernmental bargans defne the broad future drectons of the EC and the "normal poltcs" of Communty decson-makng n whch those bargans are elaborated and mplemented n detal. t s possble that the forhter s best explaned by the neo-realst regme theory and the latter by the neo-fun'ctonalst feedback mechansms.v Ths dualst hypothess s consstent not only wth the emprcal fndngs of some prevous researchers but wth the fundamental dstncton underlyng regme theory tself whereby the costs of creatng and reformng regmes he hgher than the costs of mantanng them. 98 Regme creaton and change some regme theorsts argue entals neo-realst barganng wthn an essentally anarchc settng whle regme mantenance entals more nsttutonalzed forms of accommodaton. Only further emprcal research can determne whether the neo-realst domestc neo-functonalst or dualst hypothess s most accurate. t s worth notng however that these hypotheses cannot be operatonalzed and tested wthout ntegratng a theoretcal and emprcal analyss of domestc poltcs to a greater degree than n the bulk of the exstng lterature on nternatonal economc cooperaton. Ths s so prmarly because each of these theoretcal approaches s dfferentated above all by dstnctve clams about the nature of the underlyng domestc poltcal bargans that defne the "natonal nterest." Most theores of nternatonal cooperaton ncludng regme theory have neglected the problem of domestc nterest formaton electng nstead to specfy nterests by 41

43 assumpton. 99 Yet testng these clams about ntegraton nvarably rases many questons " tradtonally treated by students of comparatve poltcs: Whch domestc actors take the lead n promotng and opposng economc lberalzaton? Are they state or socetal actors? How do they perceve ther nterests? How do they nfluence one another? What s ther relaton to the world economy? These questons necessarly connect the lterature on nternatonal cooperaton wth that on state-socety relatons n an nterdependent world economy The mportance of party poltcs and domestc economc reform n the emergence of the Sngle European Act suggests the need to combne the nsghts of comparatve poltcs wth those of nternatonal relatons theory. V Concluson: The Sne:le European Act n Perspectve At the moment the nterstate bargan whch lmts the scope of the 1992 ntatve appears sold despte several recent attempts on the part of the Commsson and certan natonal governments to reopen certan questons.l'" Ths s not to say that shfts n domestc perceptons of nterest and barganng leverage cannot lead certan ssues to be reopened--as may happen wth monetary polcy-c-or that the Sngle Act has not led to unexpected consequences. But ths case study suggests that any future systems change wll not be the drect result of functonal spllover or nsttutonal accreton. nstead such changes wll requre yet another extended negotaton--an act of new foundng a supremely poltcal act n whch each member state wll make a soveregn decson whether to partcpate.102 The standng of neo-functonalst theory among poltcal scentsts s a lagged functon of the standng of the Communty n the eyes of Europeans. When thngs go badly for the Communty as they dd n 1975 scholars speak of the obsolescence of regonal ntegraton theory; when thngs go well as they do today they speak of the obsolescence of the naton-state. Regonal ntegraton theory one reads today has been "unjustly consgned to the dustbn."103 The artcle challenges the noton mplct n these statements that progress n the Communty necessarly supports the clams of neo 42

44 functonalsts. But other theores of cooperaton based on classcal notons of power and nterests can account for ntegraton. Although the negotatons leadng up to the 1992 ntatve do not support the process-level predctons of nee-functonalsm the outcome was nonetheless a decsve push toward further European ntegraton. 104 Ths vew may allow us to reconsder much of the conventonal wsdom about the Communty. t s often argued for example that EC decson-makng has become more dffcult as the number of members ncreased--a result that s supported by recent applcatons of game theory to nternatonal cooperaton. Coercve barganng at the heart of the Communty as llustrated n ths case may appear to be a symptom of ths unwelcome trend. Yet the success of the SEA negotatons suggests paradoxcally that decson-makng n a Communty of Twelve may n some ways be easer than decsonmakng n the old Communty of Sx for coercve barganng may offer strkng new opportuntes for creatve statecraft. f for example as ths case suggests the threat by two of the large member states to exclude the thrd s credble t may more than offset ; the ncreased dffculty' of reachng a consensus. ndeed f such threats were completely' credble and preferences were randomly dstrbuted agreement would be twce as lkely' wth three natons where two are needed to adopt a proposal as wth two natons each ' wth a veto. 10S For the moment ths potental advantage s masked by the fact that preferences are not randomly dstrbuted; Brtan generally though not always acts as a constant drag' on Franco-German ntegraton. (To ths extent those who argue that Franco-German cooperaton remans a precondton for further European ntegraton are for the moment correct.) But should Brtan decde at some future date to propose ts own reforms as t dd brefly on the deregulaton of servces ths may open the possblty for new allances--and thus paradoxcally for faster progress n a Communty of Twelve than' had been possble among the Sx. 106 Ths fnal paradox suggests that t s not necessary to transform the nature of nternatonal poltcs n order to transform Europe. 43

45 FOOTNOTES. am grateful to Kalypso Ncolatds for collegal encouragement and crtcsm from the begnnng and to Davd Dessler Peter Hall Stanley Hoffmann Robert Keohane Dane Orentlcher Joseph Nye Helen Wallace and the partcpants n the Ford Foundaton European nsttutons Semnar at Harvard Unversty for comments on an earler draft. would also lke to express my apprecaton to the Center for European Studes at Harvard Unversty the Krupp Foundaton and the Morrs Abrams Fellowshp for essental research support and to the European Communty Vstor's Programme for organzng and fnancng a research trp n January Ths artcle s based n large part n ntervews wth European offcals conducted at that tme. Deser Aufsatz st menem Uronkel Andreas Flessg gewdmet der de Notwendgket ener gesamtkontnentaler europdscher Wrtschaftsgemenschaft vor enem halben Jahrhundert vorgesehen und analysert hat. 2. The quotaton s from Artcle 8A as amended by the Sngle Act. The general lterature on 1992 s explodng. The best negotatng hstory of the Sngle European Act wrtten by an ntellgent nsder who took comprehensve notes s Jean De Ruyt L'Acte UnQue Europeen: Commentare (Bruxelles: Edtons de l'unverste de Bruxelles 1987). For other useful hstores and commentares see Peter Ludlow Beyond 1992: Europe and ts Western Partners (Brussels: Center for European Polcy Studes 1989); Mchael Calngaert The 1992 Challenge from Europe: Development of the European Communty's nternal Market (Washngton DC: Natonal Plannng Assocaton 1988) and Angelka Volle GroBbrtannen und der europasche EngungsprozeB (Bonn: Forschungsnsttut der Deutschen Gesellschaft fur Auswartge Poltk February 1989) pp For a collecton of mportant German artcles and documents between 1985 and 1989 see Jochen Thes and Wolfgang Wagner eds. Auf dem Wege zum Bnnenmarkt: europasche ntegraton und deutscher Foderalsmus (Bonn: Verlag fur nternatonale Poltk 1989). For an excellent case study of the 1992 negotatons compared wth prevous experence see Roy Pryce ed. The Dynamcs of European Unon (London and New York: Croom Helm 1987). On the provsons of 1992 as a new form of multlateral economc negotaton see Kalypso Ncclads "Mutual Recognton: The New Fronter of Multlateralsm?" n Network Poltcs (Pars: Promethee Perspectves No. 10 June 1989) pp The Luxembourg compromse whch was announced to the world n a press communque has no legal standng. Qute the opposte t has been nterpreted as an attempt to crcumvent legal procedures under Artcle 236 of the Treaty of Rome that were used to adopt the Sngle Act. For the text (n French) see Phlppe Moreau-Defarges Quel Avenr pour quelle Communaute? (Pars: nsttut Francas des Relatons nternatonales 1986) p. 50; for a dscusson of ts hstory see John Newhouse Collson n Brussels: The Common Market Crss of 30 June 1965 (London: Faber and Faber 1967) and Mchael Palmer and John Lambert et al. European Unty: A Survey of the European Organzatons (London: George Allen and Unwn 1968) pp. 251ff. 4. EC Commsson Drectorate-General for Economc and Fnancal Affars "The Economcs of 1992: An assessment of the potental economc effects of completng the nternal market of the European Communty" European Economy No. 35 (March 1988). 5. Ths artcle offers no more than a prelmnary attempt to apply nternatonal relatons theory to the negotaton of the Sngle European Act. A more defntve test of ths explanaton of systems change les beyond the scope of ths paper snce t would necessarly place the Sngle Act and the Whte Paper n the context of a systematc comparatve analyss of the success and falure of major EC nternal market ntatves between 1950 and the present. A process-tracng analyss of the Sngle Act negotatons s nonetheless a necessary frst step n ths research agenda. 46

46 6. Among the factors mentoned are declnng Amercan hegemony ncreasng competton from US and Japan the emergence of servces on the GAT agenda the success of the EMS the elmnaton of other ssues from the EC agenda changes n the nature of trade from goods to servces economc stagnaton snce 1973 the begnnngs of economc recovery n the md-1980s the abandonment of Europe at the Reykjavk summt ncreased German assertveness the decson to te the ntatve to a clear deadlne the clarty of Lord Cockfeld's prose and many others. For summares of some of these arguments see Mchael Calngaert 1992 Challenge p. 7; Economst (9 July 1988) p. 8; Peter Ludlow "Beyond 1992" European Affars (Autumn 1988) pp Calngaert and Ludlow and others stress these forces. n addton see Axel Krause " What after European ntegraton?" European Affars (Autumn 1988) pp For strong clams about the mportance of ths group n nsprng reform see Marna Gazzo "ntroducton" n Towards European Unon: From the "Crocodle to the European Councl n Mlan (Brussels-Luxembourg: Agence Europe 1985) pp Among the most nfluental parlamentary reports s Mchel Albert and James Ball Toward European Economc Recovery n the 1980s: Report presented to the European Parlament (31 August 1983). Chapter 5 of the report wrtten by Albert does focus on the mportance of research programs lke ESPRT as well as standards fronter barrers and employs the expresson "the costs of Non-Europe." See also "Resoluton on the need to mplement the nternal European market" Offcal Journal of the European Communtes (OJEC) [C27/9 9 Aprl 1984]; "Report...on consoldatng the nternal market" European Parlament Workng Documents [A 2 50/85 and A 2-50/85 31 May 1985]. 10. There were nascent trends toward reform n other EC nsttutons as well. n the landmark Casss de Djon case of 1979 the European Court had ntroduced the prncple of mutual recognton of certan knds of legslaton whereby members states could be compelled to recognzed functonally smlar legslaton n foregn countres as bndng. n the Councl of Mnsters there had been a steady ncrease n majorty votng. Ten decsons were taken by qualfed majorty between 1966 and between 1974 and 1979 and more than 90 between 1980 and n addton two more subtle arguments have been advanced. Helen Wallace vews the Sngle Act as "a return on nvestments made over many prevous years" n developng a dstnctve nternal negotatng culture wthn the EC. See "Makng Multlateralsm Work: Negotatons n the European Communty" (mmeo. August 1988) p. 6. Roy Pryce sees the Councl as havng been trapped by ts own rhetorc n documents lke the "Solemn Declaraton" at Stuttgart: "...the cumulatve effect of repeated rhetorcal commtments was to make some form of acton eventually nescapable." See "Past Experence and Lessons for the Future" n Pryce ed. Dynamcs p But t s unclear whether ether of these arguments s ntended as an alternatve to the argument advanced here (e.g. see Pryce p 278 on the role of member states).. On the role of busness see Lawrence G. Franko "Europe 1992: The mpact on Global Corporate Strategy and Multnatonal Corporate Strategy" (mmeo. Unversty of Massachusetts at Boston September 1989); Wayne Sandholtz and John Zysman "1992: Recastng the European Bargan" (manuscrpt to appear n World Poltcs no date) pp. 9-10; Fnancal Tmes (14 February 1984); Axel Krauss "Many Groups Lobby on mplementaton of Market Plan" Europe Magazne (July/August 1988) pp ; Ludlow Beyond 1992 pp ; Calngaert The 1992 Challenge p. 8; Wallace "Makng Multlateralsm Work" p For Dekker's proposals see "Europe 1990: An Agenda for Acton" (Phlps 1984) and hs speeches at the Deutsche Gesellschaft fur Auswartge Poltk e.v. Bonn 9 October 1984; Center for European Polcy Studes Brussels January 1985; The nsttute of Drectors London 30 May 1985; The Assocaton of Corporate Treasurers London 22 May The four aspects of the Dekker plan were admnstratve smplfcaton of border formaltes harmonzaton of TV A 47

47 ("suppremr par etapes a fluctuatons de a TV A aux fronters") standardzaton of techncal norms and lberalzaton of government procurement. On Dekker's vew of the role of busness see Dekker's "Europe's Economc Power - Potental and Perspectves" (Speech at the Swss nsttute for nternatonal Studes 25 October 1988). 13. Jacques Delors et al. La France par l'europe (Pars: Bernard Grasset 1988) pp. SO See Calngaert The 1992 Challenge p. 9. For Delors' verson see Delors et al. La France Dar l'europe pp nsttutonal reform was opposed by the UK and Denmark; defense cooperaton by France reland Greece and others; and monetary reform by the UK Denmark and the Netherlands. ntervew wth Jacques Delors 22 September On Delors ntentons draw on an ntervew wth Delors 22 September See also the speech by Lord Cockfeld "The Completon of the nternal Market" nsttute for nternatonal Economcs Washngton 24 May 1988 cted n Calngaert The 1992 Challenge p Ludlow Beyond 1992 pp 27-30; Calngaert 1992 Challenge passm.; Dusan Sjansk "Communaute europeenne 1992: gouvernement de comtes" Pouvors 48/1989 pp ; Helen Wallace "Europasche ntegraton" n Thes and Wagner eds. Auf dem Weg pp ; Sandholtz and Zysman "1992: Recastng the European Bargan" pp Neo-functonalsm s a research programme of great emprcal and theoretcal rchness partcularly as regards the poltcal process by whch economc ntegraton between states takes place. t s not my purpose here to elaborate ths lterature further nor to attempt a comprehensve crtque but smply to demonstrate that the wdely-held vews about the causes of the 1992 ntatve outlned above are consstent wth the essental assumptons of neofunctonalsm. The locus classcus s Ernst B. Haas The Untng of Europe: Poltcal. Socal and Economcal Forces (London: Stevens and Sons 1958). For later crtque commentary and elaboraton see Leon N. Lndberg and Stuart A. Schengold Europe's Would-Be Polty: Patterns of Change n the European Communty (Englewood Clffs NJ: Prentce-Hall 1970); Lndberg and Schengold eds. Regonal ntegraton: Theory and Research (Cambrdge MA: Harvard Unversty Press 1971); Joseph S. Nye Jr. Peace n Parts (New York: The Free Press 1971); Mchael Hodges ed. European ntegraton (Harmondsworth Mddlesex: Pengun 1972); Charles Pentland. nternatonal Theory and European ntegraton (New York: The Free Press 1973); Paul Taylor. The Lmts of European ntegraton (Beckenham: Croon Helm 1983). For a current research agenda based on some of the same premses see Wllam Wallace "The Changng Shape of Western Europe" (Paper delvered at the SA Conference London 30 March 1989). 18. See Haas Untng Chapter One. The rchness of detal and ambguty of Haas' analyss m.ght lead one to argue that ths frst assumpton s the only one that characterzes neo-functonalsm. After all Haas appears to concede n the Untng of Europe that spllover can be postve or negatve and that functonal demands for further ntegraton wll prolferate only f the supranatonal organzaton's actons promote them. n ths form however nee-functonalsm s tautologcal. The nterestng clams are teleologcal and process-orented. For an attempt to address these crtcsms see Ernst B. Haas and Phlppe C. Schmtter "Economcs and Dfferental Patterns of Poltcal ntegraton: Projectons about Unty n Latn Amerca" nternatonal Organzaton (Autumn 1964) pp For elaboratons of ths vew see Nye Peace n Parts; Lndberg and Schengold Europe's Would-Be Polty. 20. See Haas Untng of Europe Chapter 8 ("The Expansve Logc of Sector ntegraton") especally pp n whch he argues that there was a "drect causal connecton" between the negotaton of the European Coal and Steel Communty (ECSC) n 1952 and the Euratom and 48

48 Economc Communty treates n 1957 resultng from a "clearly predctable nsttutonal and procedural mpact" of the ECSC. Thus he predcts "...the logc of ntergovernmental relatons wthn the framework of the EEC-Euratom-ECSC Councl of Mnsters ts assocated commttees of natonal experts workng under the proddng of supranatonal Commssons can lead only to more collectve decson-makng n the effort to overcome the nevtable crses and unforeseen contngences." t s true of course that Haas later retreated from ths poston argung for example that the process of functonal lnkages was mportant but the drecton of the effect ("spllover" or "spll back") was ndetermnate. Ths retracton does not blunt the crtque n ths paper snce t nonetheless mantans that nterest groups and supranatonal offcals wll spearhead any movement regardless of drecton. See also Haas "nternatonal ntegraton: the European and the Unversal Process" reprnted n Hodges ed. European ntegraton pp. 93ff; Haas "Technocracy Pluralsm and the New Europe" n Stephen R. Graubard A New Europe? (Boston: Houghton Mffln 1964). 21. On these nterpretatons of spllover. see Footnote 19. and Haas Untng of Europe. especally pp. x-xv; Haas and Schmtter "Economcs and Dfferental Patterns of Poltcal ntegraton" p For varatons see Joseph S. Nye Peace n Parts: ntegraton and Conflct n Regonal Organzaton (Boston: Lttle Brown and Co ) pp Changes n the nterests and expectatons of domestc actors comprse a thrd mechansm. nterest groups poltcans and and offcals moblzed by the ntal steps toward ntegraton wll alter ther vews thus breakng down natonalst nhbtons toward further ntegraton. Although the process of spllover may work n part through domestc poltcs n member states t s n all cases a systemc result of prevous ntegraton decsons and thus should proceed ndependently of dfferences n domestc poltcal arrangements. Ths more complex mechansm s not tested n ths artcle but see the secton below on "The Domestc Roots of Regme Theory." 22. Haas "nternatonal ntegraton: the European and the Unversal Process" pp. 93ff. 23. Haas and Schmtter "Economcs and Dfferental Patterns of ntegraton" p 707; Haas "nternatonal ntegraton" p Haas stressed both natonal and supranatonal dynamcs and the stress he lays on each remans open to debate. For example n the Untng of Europe he predcted the "untng" of supranatonal nterest groups but the predcton has the same ambguty as the ttle of the book. One can magne a varant of neo-functonalsm whch works entrely through changes n values expectatons and nterests at the natonal level and coordnaton between state polces at the supranatonal level wthout any power or nfluence beng transferred to EC offcals and organzatons or to supranatonal nterest groups. Ths paper seeks to assess the valdty of the systemc supranatonal varant of regonal ntegraton theory. For some throughts about an alternatve see also page See Julet Lodge "EC Polcymakng: nsttutonal Consderatons" n Lodge ed. The European Communty and the Challenge of the Future (London: Pnter 1989) p. 28; Taylor Lmts Chapters Three and Ten. 26. Lndberg and Schengold Europe's Would-Be Polty Chapters 5 and 6 especally pp. 243ff. n neo-functonalst language heads of state are "dramatc-poltcal actors." See also Keatnge and Murphy "European Councl's Ad Hoc Commttee" n Pryce ed. Dynamcs p On Haas' vews see The Obsolescence of Regonal ntegraton Theory (Berkeley CA: Unversty of Calforna 1975). 27. On the approprateness of regme theory see Stanley Hoffmann "Reflectons on the Naton State n Western Europe Today" Journal of Common Market Studes (September/December 1982) pp The closest varant of regme theory appled here s "modfed structural realsm" as set forth n Robert Keohane Neo-Realsm and ts Crtcs (New York: Columba Unversty Press 1986) pp and Keohane After Hegemony: Cooperaton and Dscord n the World Poltcal 49

49 Economy (Prnceton: Prnceton Unversty Press 1984) pp Keohane wrtes that "the concept of nternatonal regme s consstent both wth the mportance of dfferental power and wth a sophstcated vew of self-nterest." 28. For a defense of ths trpartte dstncton see Andrew Moravcsk "Dscplnng Trade Fnance: the OECD Export Credt Arrangement" nternatonal Organzaton (Wnter 1989) pp Hoffmann "Reflectons" p 26. See also Davd Dessler "What's at Stake n the Agent Structure Debate?" nternatonal Organzaton (Summer 1989) pp See Foregn Mnster Genscher's comments at the openng sesson of the ntergovernmental Conference summarzed n Gazzo Towards Eurooean Unty pp and also the German draft on new powers for the Parlament summarzed n Gazzo lll!. p On German vews toward the CAP see Gsela Hendrks "Germany and the CAP: natonal nterests and the European Communty" nternatonal Affars (Wnter ) pp The German stand aganst more ntensve monetary cooperaton softened n t mght be argued that taly too s a major state wth a veto. But ths hardly changes the analyss snce taly was a net benefcary from the EC budget and the Common Market and talan leaders were tradtonally among the Communty's most consstent supporters of a strong Parlament. 31. Ths account of the foregn polcy of the frst Mtterrand presdency draws heavly on Gabrel Robn La Dplomate de Mtterrand ou e tromphe des apparences (Pars: Edtons de la Bevre 1985). 32. One suspects that Mtterrand and hs mnsters were lookng for a way to lmt agrcultural spendng wthout appearng to have been responsble for t. Hence the attempts to cast Thatcher as a scapegoat and the fact that although the French government became more accommodatng of agrcultural reform and French mnsters spoke out occasonally overgenerous support they remaned one of the staunchest supporters of generous agrcultural subsdes as late as the Brussels summt of February Paul Taylor "The New Dynamcs of EC ntegraton n the 1980s" n Lodge ed. European Communty p The economc and poltcal reasons behnd Mtterrand's decson are dsputed. The decsve economc argument appears to have been made by the Treasury to Laurent Fabus who told Mtterrand that leavng the EMS would undermne confdence n the economy and ultmately compel the French government to mpose as much austerty as would contnued membershp. The decsve poltcal condton appears to have been the declne of the French Communst Party whch allowed Mtterrand to algn hmself wth the moderate wng of the Socalst Party. On ths ssue see Davd Cameron "The Colors of a Rose: On the Ambguous Record of French Socalsm" (Cambrdge MA: Center for European Studes Harvard Unversty 1987); Peter Hall Governng the Economy: The Poltcs of State nterventon n Brtan and France (New York: Oxford 1986) pp ff; Organzaton for Economc Cooperaton and Development Why Economc Polces Change Course (Pars: OECD 1988) pp 56-64; Phlppe Bauchard La guerre des deux roses: du reve a la realte ] (Pars: Bernard Grasset 1986). 34. The speed wth whch Mtterrand began to manpulate Europe as an electoral ssue s demonstrated by hs consderaton of a plan to hold a referendum on enlargement n early See Fnancal Tmes (6 March 1985). See also Moreau-Defarges Quel avenr pp See hs speech at the European Parlament 24 May 1984 reprnted n Gazzo ed. Towards European Unon pp

50 36. Robn La dolomate de Mtterrand pp For another equally ronc but more postve assessment see Phlppe Moreau-Defarges "'...J'a fat un reve...' le presdent Francos Mtterrand artsan de l'unon europeenne" Poltaue Etrangere (Fall 1985) 37. Thatcher supported the goal enshrned n Artcle 61(2) of the amended treaty by whch "the lberalzaton of bankng and nsurance polces shall be affected n step wth progressve lberalzaton of movements of captal." Cted n Taylor "New Dynamcs" pp and Department of Trade and ndustry The Sngle Market: the facts (London: HMSO 1988). Brtan had also created an ndependent regulatory agency OFTEL under the Telecommuncatons Act of 1984 presagng the Commsson recommendaton found n the Green Book of See also Fnancal Tmes (17 June 1985); Todd A Practcal Gude p. 1.4; nternatonal Herald-Trbune (2 July 1984). 38. Fnancal Tmes (26 January 1982) cted n Taylor Lmts p Geoffrey Howe echoed Cheysson's pont of vew: "The negotaton launched at Stuttgart and contnued at Athens n 1983 n December 1983 s not just about the budget and the CAP. t s about the whole future shape and drecton of Europe." Geoffrey Howe "The Future of the European Communty: Brtan's Approach to the Negotatons" nternatonal Affars (Sprng 1984) p Here draw heavly on Paul Taylor's nsghts n "New Dynamcs". For earler versons of the same thess see Corbett "1985 ntergovernmental Conference" p and Francose de la Serre La Grande-Bretagne et la Communaute eurooeenne (Pars: Presses Unverstares de France 1987) p The quotaton s from Taylor "New Dynamcs" p For a summary of the debate see Helen Wallace wth Adam Rdley Europe: The Challenge of Dversty (London: Routledge and Kegan Paul 1985) especally Chapter 5; Eberhard Grabtz ed. AbgestUrfte ntegraton: ene Alternatve zum nerzkommlchen ntegratonskonzept (Kehl am Rhen: Engel Verlag 1984); Moreau-Defarges Ouel Avenr. 42. Henz Stadlmann "De europasche Gemenschaft nach der franzosschen Ratsprasdentschaf't" Europa-Archv (8 October 1984) pp The Franco-German agreement on procedure was only partal snce France dd not support German efforts to strengthen the Parlament whle preferrng to replace Artcle 235 of the Treaty wth one that would have sanctoned the creaton of a "dfferentated Europe" wth dfferent sets of members nvolved n dfferent programs. The French tradtonally support dplomatc flexblty to facltate projects lke EUREKA whch nvolve only some countres of the Communty or countres outsde of the EC. See De Ruyt L'acte unque p Robn La dplomate de Mtterrand p. 219; Gann Bonvcn "The Genscher-Colombo Plan and the 'Solemn Declaraton on European Unon' ( ) n Pryce ed. Dynamcs pp Robn La dolomate de Mtterrand p. 219; De Ruyt L'acte Unque pp t s perhaps sgnfcant that n 1982 the French backed the other countres n overrulng a Brtsh veto on the queston of cereal prces. Ths decson reportedly taken by Mtterrand hmself suggests that the French government or at least ts Presdent already accepted that the veto be used only n exceptonal crcumstances. 45. Guardan (3 February 1984); Rudolf Hrbek and Thomas Laufer "De Enhetlche Europasche Akte" Europa-Archv (June 1986) pp

51 46. The standard was not a hgh one. Tradtonally the Presdency of the Councl had not been taken serously. See Colm O'Nuallan ed. The Presdency of the European Councl of Mnsters (London: Croon Helm 1985) especally the concludng chapter by Helen Wallace. 47. The mportance of the shuttle dplomacy s stressed by Delors who recalls that Mtterrand met sx tmes each wth Kohl and Thatcher. n France the key decsons taken n ths perod were n meetngs a guatre wth Mtterrand Dumas Delors and hs Mnster of European Affars. ntervew wth Delors 22 September The Quotaton s from "Speech of Francos Mtterrand before the Netherlands Government (7 February 1984)" released by the Ambassade de France a Londres (CTL/DSCOM/29/84). See also "ntervew wth Francos Mtterrand...(22 May 1984)" (CTL/DSCOM/93/84); hs address before the European Parlament on 24 May reprnted n Gasso ed. Towards European Unon pp ; and hs televson ntervew reprnted n Le Monde (23 March 1984). On the deal of a Europe that combnes the vrtues of market lberalsm and socal democratc welfare state. see the ntervew wth Mchel Rocard n nterventon (Feb-Apr 1984) p Mtterrand's concepton of the nternal market nonetheless remaned more nterventonst than the Sngle Act: he stressed manpower tranng technology programs and the common external tarff. 49. On the Mtterrand presdency see Stadlmann "De Europasche Gemenschaft"; De Ruyt L'acte unque p ; The Guardan (25 January 1984); Press Conference wth Mtterrand (2 Aprl 1984). For a contemporary crtque of these polcy changes see Robn La Dplomate Mtterrand pp especally pp See also Guardan (3 February 1984); De Ruyt L'Acte Unque p. 48; Rocard ntervew nterventon. 51. Robn La dplomate de Mtterrand p Ludlow Beyond 1992 p. x-x; Howe "The Future of the European Communty" pp Fnancal Tmes (12 March 1984); Observer (25 March 1984); Guardan (24 July 1984). t s unclear whether Kohl's refusal was due to hs falure to grasp all the detals to pent-up exacerbaton after years of hagglng or ndeed whether t was a stand on prncple. 54. Le Monde (18 March 1984) (5 May 1984). See also hs speech before the Bundestag on 28 June 1984 excerpted n Gasso ed. Towards European Unon p See "Europe: The Future--Unted Kngdom Memorandum (June 1984)" reprnted n Gazzo ed. Towards European Unon pp from whch the Quotatons are taken. Tmes (18 October 1984); Fnancal Tmes (22 March 1984); Chrstopher Tugendhat's artcle n Fnancal Tmes (9 January 1985); Malcolm Rfknd "Fur en starker geentes Europa-ven praktsches Programm" n ntegraton (Aprl 1985) pp ; Guardan (30 May 1984); Center for Polcy Studes Makng t Work: The Future of the European Communty (London: Center for Polcy Studes 1984); Statement by Mnster Roland Dumas (14 June 1984) ssued by the Ambassade de France a Londres (CTL/DSCOM/98/84); Le Monde (15 June 1984). At the same tme a Conservatve party thnk-tank ssued a report callng for a "relaunchng of Europe." 56. Taylor "New Dynamcs" p. 7. Taylor argues that the mood of conclaton was due to the fact that durng Brtsh and French falure n March at Brussels they had "looked nto the abyss and were shocked nto an awareness of the need to hold themselves back." By takng tme to confess hs personal deals Taylor argues Mtterrand was lettng Thatcher "see the future." 57. De Ruyt L'acte unque p The Commsson later adopted a standard measure of the burden. See EC Commsson Makng a Success of the Sngle Act p

52 58. "Conclusons of the European Councl at ts Meetng n Fontanebleau" (26 June 1984) reprnted n Gazzo ed. Towards European Unon pp On the Spaak Commttee see Hanns Jurgen Kusters "The Treates of Rome ( )" n Pryce ed. Dynamcs pp. 84ff. 59. Sunday Tmes (3 March 1985); nternatonal Herald-Trbune (21 March 1985); Fnancal Tmes (15 May 1985).Geoffrey Howe "GroBbrtannen und de Bundesrepublk Deutschland als europasche Partner" Europa-Archv (10 November 1984) p France reportedly nssted that taly be excluded for fear that talan partcpaton would slow the negotatons. 60. Fnancal Tmes (30 November 1984) (3 December 1984) (22 March 1985) and (10 May 1985); Le Monde (30 March 1985). On the Commttee's "real task" see Katherne Meenan "The Work of the Dooge Commttee" Admnstraton (Vol. 33 No.4) cted n Patrck Keatnge and Anna Murphy "The European Councl's Ad Hoc Commttee on nsttutonal Affars ( )" n Pryce ed. Dynamcs p. 227; De Ruyt L'acte unque p France too accepted that the frst prorty of the Communty must be the creaton of an "espace economque ntereur homogene." On the objectons of the Qua d'orsay presumably to the renuncaton of the Luxembourg compromse see Corbett 1985 ntergovernmental Conference p Daly Telegraph (12 July 1984); Fnancal Tmes (12 September 1984). 62. Fnancal Tmes (31 December 1984). 63. Daly Telegraph (4 March 1985). 64. Fnancal Tmes (17 June 1985). Both VAT harmonzaton and harmonzaton of regulatons had been dscussed frutlessly by the Councl for a decade.! 65. De Ruyt L'Acte Unque pp For the Brtsh proposals see "Europe: The Future" whch was resubmtted by Brtan and the "Draft Treaty on Poltcal Cooperaton" evdently the same paper that Brtsh Foregn Mnster Sr Geoffrey Howe had presented to the conference of foregn mnsters at Stresa earler n the month. For the proposals of taly the Benelux France and Germany and the Brtsh proposals above see Gazzo ed. Towards European Unon: Supplement. For commentary see Tmes (London) (21 June 1985). 66. See statement by Mme. Catherne Lalumere Secretary of State for European Affars before the Natonal Assembly (11 June 1985) released by the Ambassade de France Londres (CTL/DSCOM/96/85). The French evdently had a certan buldng n Pars n mnd to house the Secretarat-General. 67. See Gasso ed. Towards European Unon: Supplement pp De Ruyt L'Acte Unque pp The opton of nvokng Artcle 236 whch allows amendment by unanmous consent of the Councl had been prevously presented n the talan pre-summt memorandum as a possble compromse between a new treaty and the more ad hoc Brtsh approach. Nonetheless the vote does not seem to have been planned n advanced by the governments who voted affrmatvely. See Gasso ed. Towards European Unon: Supplement pp De Ruyt L'Acte Unque p. 68. The decson to nvoke Artcle 236 also reenforced the splt between poltcal cooperaton whch could nvolve a new treaty adopted by only some of the natons and nsttutonal reform whch now had to start from the exstng treaty and thus requred unanmty. On the Brtsh calculaton see Taylor "New Dynamcs" pp See De Ruyt L'Acte Unque pp

53 71. France brefly opposed deregulaton of ar servces but the~ backed down. 72. My account follows Corbett "1985 ntergovernmental Conference" pp Delors' speech s reprnted n Gazzo ed. Towards European Unty p. 24. See also Gazzo p. 38; Ludlow Beyond 1992 p. v. On Delors' characterzaton of the role of Germany and Brtan see hs press conference of 27 November 1985 reprnted n Gazzo bd. p There are subtle dfferences between Corbett's account and that of De Ruyt (L'acte unque pp ) whch follow here. 74. Gazzo Towards European Unon p De Ruyt L'acte unque p ; Corbett "1985 ntergovernmental Conference" pp Touleman "Le My the de 1992" p. 8; Corbett "1985 ntergovernmental Conference" p 248. See also the communque of the Luxembourg summt n December 1985 reprnted (n German) n Thes and Wagner eds. Auf dem Weg p Corbett "1992 ntergovernmental Conference" pp Ths secton draws on De Ruyt L'acte unque p and Corbett "1985 ntergovernmental Conference" pp The new nternal market artcles n queston are 8A 100A and 100B (nternal market) 28 (common external tarff) 57 (lberalzaton of professonal qualfcatons) 59 (lberalzaton of servces) 70 (lberalzaton of captal movements) and 84 (martme and ar transport polcy). De Ruyt ponts out that the Sngle Act smply extended and clarfed the use of majorty votng to areas where the Commsson had been actng under the broad mandate of Artcle 235 and the old Artcle 100. And he reports fscal harmonzaton mght have been absent altogether from the Sngle Act had t not been for the subrepttous pressure of some delegatons. 79. Corbett "1992 ntergovernmental Conference" p The Commsson was gven mplementng powers but these must be exercsed at the whm of the Councl snce Communty measures may specfy the mode of mplementaton n consderable detal. 80. De Ruyt L'acte unque pp ; Fnancal Tmes (28 November 1985); Corbett "1985 ntergovernmental Conference" PP Both Germany and France consdered tablng a proposal for majorty votng n all areas connected wth the extenson of the nternal market but ther postons tended to be more moderate once actual commtments were requred. 81. De Ruyt L'acte unaue p ; Gazzo Towards European Unon p De Ruyt L'acte unque pp ; Todd Practcal Gude p De Ruyt L'acte unque pp. 72ff. The fnal procedures for comng to a vote were not set untl December 1986 after a year of dscusson n the COREPER commttee of the Councl where t was decded that any member of the Councl or the Commsson can call for a vote subject to majorty acceptance by the Councl and two-weeks advance notfcaton of ssues that mght come to a vote. t s unclear whether there s any sgnfcance to the precse wordng of the condton for derogaton whch has been changed from "vtal natonal nterest" to "exgence mportant" as defned by Artcle 36. See De Ruyt pp For speculaton on Franco-German ntentons see De Ruyt L'Acte Unque p. 272; Corbett "1985 ntergovernmental Conference" p The vew that the outcome reflected "a trumph" for Brtsh negotators has been most cogently argued by Taylor n "New Dynamcs." 54

54 85. De Ruyt L' Acte Unaue p European Parlament's opnon of 9 July 1985 regardng the proposal for an ntergovernmental Conference reproduced n Gazzo Towards European Unon pp See the exchange between Pflmln and Poos ncludng the note of the Conference Presdency reprnted n Gazzo Towards European Unon pp See also Delors' explct denal of the democratc legtmacy of the Parlament n hs openng address to the Conference reprnted n Gazzo lll!. p. 27. On the pragmatst poston of the Brtsh see Foregn Mnster Sr Geoffrey Howe's comments at the openng sesson reprnted n lll!. p. 30. For a response see Spnell's speech on 2 October 1985 before the German Bundestag" reprnted n Gazzo llll. p. 41. Proposals to strengthen the Parlament were dscussed f at all n large part due to pressure from the talans who were actng n part n deference to the wshes of Spnell charman of the European Parlament Commttee on nsttutonal Affars and a grand old man of Europe. ntervew wth Benjamn Patterson European MP Strasbourg 19 January Four years later parlamentarans are stll complanng that the new ntatve was not a "Treaty of European Unty" but a more modest "Sngle Act." See European Parlament Rapport...sur la stratege du Parlament europeen en vue de la creaton de "Unon europeene (Document A2-0332/88 21 December 1988). 88. See the programmatc statement of Spnell and two assocates n the naugural ssue of the "Crocodle" newsletter reprnted n Gazzo ed. Towards European Unon pp See also Gazzo ed. Towards European Unon p 104; De Ruyt L'Acte Unaue p. 85. A smlar argument can be made about the European Court. t s msleadng to vew the mutual recognton provsons of the Sngle Act as a smple reflecton of evolvng Communty jursprudence partcularly the Casss de Djon case of The Sngle Act strctly lmts "maxmalst" judcal precedents set by the Court n recent years n the same way that t lmts maxmalst ambtons of the Parlament.For example the Court nterpretng the orgnal Treaty of Rome n a contnuous seres of cases snce 1966 has tended to allow the Commsson broader powers to harmonze legslaton and has recognzed few exceptons under Artcle 36. The Sngle Act n contrast revsed the treaty to lmt the applcablty of harmonzaton to the facltaton of open markets. For a "maxmalst" crtque see Perre Pescatore "Crtcal Observatons concernng the 'European Sngle Act'" n Gazzo Towards European Unon p On the lack of actve elte busness support for the ntal European ntatves see Haas The Untng of Europe Chapter Fve. 90. Krause "Many Groups Lobby" p The tone s heroc as the openng words of the chapter on Delors' ntatve llustrate: "January 1985: the wnter was harsh. n Brussels as n Pars people were shverng. On the top floor of the Berlaymont n a vast offce that ddn't yet seem qute lved n Jacques Delors gathered hs closest assocates around hm..." See Delors et al. La France par l'europe p See Helen Wallace "Europasche ntegraton" pp Fnancal Tmes (9 October 1989). 94. Ths nterpretaton may mply that the ablty to carryon such negotatons may be a functon of the autonomy of heads of government from domestc nterests rather than a functon of ther domestc or nternatonal nterest group support. As several analysts of the Communty have noted nterest groups and bureaucraces have a tendency to favor the status guo. As a result of ths Communty nvolvement n areas has often seemed to reach a pont of equlbrum where nterests for and aganst further change are balanced. t may well be the ablty of heads of government to gan autonomy from these status guo forces that permts systems change. 55