WEEK 3: Deepening and Widening: From Maastricht to NIce

Question 1

What was the success of the single market (SEA)?

Answer 1

• 260/279 agreed actions completed by ‘1992’ deadline (95% success rate)
• Companies anticipated Single Market – increased cross border mergers and joint production arrangements (why Thatcher agreed to the SEA)
• Delors saw the SEA as the first step towards a further extension into Social policy and Economic and Monetary policy (spillover?)

Question 2

What was Jacques Delors political view?

Answer 2

• Economic and Monetary Union
• Political Plan: Brings countries together
• Due to SEA: More acceptance of single currency

Question 3

What was the Delors report?

Answer 3

A 3 stage progress towards a single currency

1) (to start no later than July 1, 1990):
free capital movement in the EC and closer monetary and macroeconomic cooperation between member states and their central banks

2) Launch of ESCB to monitor and coordinate national monetary policies;
stronger supervisory powers of the European Parliament and European Council
progressive narrowing of fluctuations margins within the ERM

3) Establishment of “irrevocably fixed exchange rates parities;
granting of full monetary policy authority to EC institutions

Question 4

Why did Thatcher oppose the European Monetary Union and what was her vision to the European Market?

Answer 4

• Willing to Cooperate to European Monetary Union without power centralisation
• Need for reform of ineffective community practises and policies
• Cut red tape to remove barriers to trade in the GATT (Encourage enterprise)

Question 5

What was the vote to the European Monetary Union(EMU)/Delors Report?

Answer 5

11/12

UK only country to reject the EMU

Question 6

What was one of the critiques behind the EMU?

Answer 6

Members don’t have same fiscal policy/rules

Question 7

What did the fall of the Berlin Wall do to European Integration?

Answer 7

• Made European integration more complex
• German Unification as a catalyst that links Economic and Monetary Union (EMU) with European Political Union (EPU)
• Need to reconsider the political aspects of European Community (dominance of Economic integration)
• Risk of disorder and destabilized East but also economic potential of new markets and investment
• Put strains on many states as they had high interest rates on situations that states shouldn’t (Leading to Black Wednesday)

Question 8

What was the first Maastricht Treaty and what did it implement?

Answer 8

Introduced principle of subsidiarity:

- National organisations only draft laws when it can’t be solved at local levels

Question 9

What did the second Maastricht Treat implement? (PT1)

Answer 9

• Changed the name European Community into the European Union
• Added new areas of cooperation: Common Foreign Security Foreign Policy and Justice and Home Affairs
• Introduced the 3 pillars under the EU
  (Pillar I): European Communities
  (Pillar II): Common,Foreign and Security Policy
  (Pillar III): Political and Judicial Co-op

Question 10

What did the second Maastricht Treat implement? (PT2)

Answer 10

• Increased legislative powers to the European Parliament (extension of the co-decision procedure in a extended range of areas)- Could now dispute about more things
• Creation of Committee of Regions and Local authorities created – recognition of growing subnational role of government
• Introduced the concept of citizenship Eg: Freedom of movement and residence/ Voting rights in local and European elections/EU diplomatic protection/ Petition EU Ombudsman

Question 11

What was the criteria of joining the Monetary Union?

Answer 11

1) A budget deficit of not more than 3% of GDP

2 )A public debt of not more than 60% of GDP

3 )A level of inflation no more than 1.5% above the average level achieved by the three states with the lowest levels of inflation

4) Interest rates no more than 2% above the average of the three states with the lowest levels
5) A record of respecting the normal fluctuation margins of the exchange rate mechanism for two years

Question 12

Why did the European Monetary Union led off to a bad start?

Answer 12

Sep 1992 ERM crisis:
-Steady growth of the mark and Bundesbank high interest rates
-Removal of exchange controls and free movement of money
Intensive speculation by global money markets
-Devaluations in Italy, Portugal, Spain
-Pressure on the franc: full support given by Bundebank
-Pound under pressure – little support by Bundesbank

-“Black Wednesday” of September 16 - pound sterling pull out (some consider it to be Golden Wednesday as it showed policy makers never to consider a monetary union again)

Question 13

What did the Amsterdam and Nice Treaty implement overall?

Answer 13

• Extend range of issues that can be legislated

Question 14

What did the Treaty of Amsterdam implement?

Answer 14

-Modest treaty
- Further extension of the codecision powers of the EP
-‘Flexible integration’ -‘Enhanced Cooperation’
New role: High Representative in CFSP; constructive abstention
-Communitarization of some JHA (third pillar) policies; opt outs for UK, Ireland, Denmark

Question 15

What happened in 1999 and 2000 as the Amsterdam and Nice treaties?

Answer 15

1999: Single Currency came into operation

1999-2002: the Euro circulates together with national currencies

Question 16

What did the Cologne European Council (1999) discuss?

Answer 16

(i) Weighting of votes in Council;
(ii) composition of Commission (and EP);
(iii) extension of QMV

Question 17

What was the key amendments to the Amsterdam Treaty?

Answer 17

• Add in social chapter and fundamental rights (Thatcher didnt want EU to become social superstate)
• Introduction of Shengin (opt out of UK)
• Extended range of things the EU can discuss

Question 18

What were the key amendments to the Nice Treaty?

Answer 18

• One commissioner per country
• Extend range of things can discuss (Prepared doors to open of big bank of Europe)
• Enlargement to the East