HISTORICAL OVERVIEW OF THE EUROPEAN INTEGRATION:

INTERNATIONAL ORGANIZATION
➔ established by states
➔ treaties: “international contract” ratified by states

SUPRANATIONAL
➔ countries give up a part of their sovereignty to a higher authority
➔ binding decisions to all (most of the time: majority voting)
➔ autonomous organs can make legal decisions
➔ binding decisions can be enforced in a court
◆ EU: European Court of Justice
◆ Fines or penalties

INTERGOVERNMENTAL
➔ binding decisions only if everyone agrees
➔ binding only for countries that voted in favour

HISTORY OF EUROPEAN INTEGRATION

➔ After World War II: initial steps to co-operation (all intergovernmental):
◆ Organization for European Economic Co-operation (1948):
● Established to coordinate economic recovery of Europe and in particular to distribute
aid granted under the Marshall Plan (promoted by US)
○ aid for Western europe especially bc of Cold War tensions
● has become OECD (research,data)
● Marshall was a secretary of state
● avoiding another war was important but also important to get on economics
◆ Council of Europe (1949):
● promoted by UK Churchill
● Established to achieve greater unity and cooperation amongst European states on the
basis of a number of fundamental principles: respect for the rule of law and human
rights. Members maintained their full sovereignty
● not EU - older and larger 46 members
○ countries not: Russia (expelled), Belarus, Kosovo
● launched in 1946
● to defend citizens
◆ North Atlantic Treaty Organization (1949):
● Military alliance: established as a collective self-defence organization.
● Members maintained their full sovereignty
● we need US bc UN cannot protect us in context of Cold War

➔ Fifties: first steps in integration process:

◆ European Coal and Steel Community (Treaty of Paris, 1951):
● Member states agreed to transfer the administration of their coal and steel industry to
an independent supranational institution
● supranational
◆ European Defence Community (1952):
● Integration of forces, placed under a supranational command:
○ France refuses to ratify
○ re arming W GE
◆ Western European Union (1954):
● Alternative for EDC: based on the concept of collective self-defence
 ◆ European Economic Community and European Atomic Energy Community (Treaties of Rome,
1957):
● Promote economic integration through the establishment of a common market and a
common competition, agricultural, commercial and transport policy
● Based on the principles of the ECSC but with some adjustments

➔ Sixties: the European integration in crisis:

◆ Merger Treaty (1965)
◆ Empty chair policy of France (1965)

➔ Seventies: the start of European Political and monetary co- operation

➔ Eighties: a new impetus for European integration:

◆ Single European Act (1986): to make decision-making easier and achieve internal common
market
● First real revision of the Treaty of Rome
● Institutionalization of the European Political Co-Operation
● New impulses for economic integration: Achievement by December 31, 1992 of an
internal market
● Increased involvement of the European Parliament in decision-making (co- operation
procedure)
● Decision-making by qualified majority voting in the Council

EU: international unique organization that is predominantly supranational

where did the EU come from

IMP: for promotion of economic integration - ECSC and then EEC and EURATOM - 50S 3 communities
among 6 states

➔ Nineties: establishment of the European Union:

◆ Treaty on the Establishment of the European Union (Treaty of Maastricht
(1992)):
◆ fall of Berlin Wall, German reunification, fall of comunism
◆ deepen economic integration
◆ Two integration tracks (supra + intergov) were brought together: three pillars:
➔ First Pillar - economic integration - supranational :
◆ European Community (ECSC, EEC, EURATOM)
◆ + Enlargement and strengthening of competences: Economic and Monetary
Union, social policy, education, culture, …
◆ Further extension of the scope of qualified majority voting in the Council and
further enlargement of the powers of the European Parliament in the legislative
process (co-decision procedure)
➔ Second Pillar - intergov :
◆ Common Foreign (diplomatic and political relations w third countries) and
Security Policy/defence matters
◆ new: defence
◆ why include these matters?
● bc of what happened in Eastern countries who were going through
reform so EU needed to have policies towards these close new
democratic countries
➔ Third Pillar - intergov :
◆ Co-operation in the field of Justice and Home Affairs
● police cooperation, judicial cooperation, developing a common policy w
regards to criminality, for migration, for refugee policy
 ➔ why in pillar structure?
◆ bc three pillars are different because of the different functioning
● first (oldest): supranational
● second: intergovernmental
● third: intergovernmental
● intergov bc states were not ready to giive sovereignty on those aspects

◆ Treaty of Amsterdam (1997):

● why this revision necessary - bc these countries w new democratic systems were
asking for membership (in early 90 12 states 1995 15 states) all have to agree for those
who enter
● trying to prep EU for big enlargement
● Third Pillar was renamed in Police and Judicial Cooperation in Criminal Matters
● Schengen Acquis became incorporated in the EU

➔ Beginning of a new millennium: paving the way for the enlargement of the EU:
◆ Treaty of Nice (2001):
● With a view to the enlargement, institutions of the EU were partially reformed
● make policy-making more democratic in decision-making -
● Parliament's legislative and supervisory powers are increased and qualified-majority
voting is extended to more areas within the Council.
● ppl must become involved
◆ Treaty Establishing a Constitution for Europe (2004):
● All said yes and ratified in their country, except for: France and the Netherlands (where
it was rejected when they consulted via a referendum their people)
● why did majority say no?
○ a constitution gives impression of super state, feared that EU would become too
powerful
○ some said no: EU lacks competences in certain areas(e.g.defence matters) +
others just not ok with their current national government
○ referendum is either yes or no - problem: citizens need to know over what they
are voting and many did not even know about the content of the treaty (difficult
to understand)
○ could not enter into force
◆ German Chancellor Merkel proposed a period of reflection to understand
why majority said no
● explain what the changes are
● explain not a superstate just a treaty which name can change
◆ Treaty of Lisbon (Reform Treaty 2007) - solving the other issue bc Constitution was scared
● Keeps most institutional innovations that were agreed upon in the European
Constitution - make EU more democratic
● Pilar structure is abolished - too complicated for functioning and decision making
● treaty on EU and functioning of the EU
● first time mentioned how a country would leave
◆ Brexit (2020)
● UK w majority decided to leave
● why did they leave?
○ migration policy of the EU
○ they were contributing more to EU than they were receiving
◆ well, before this they were receiving more than giving
● first withdrawal from EU
● well, partial removal in 80s
○ Denmark in 1973 joined bc Greenland, as part of Denmark, all rules that Danish
accepted were also applicable in Greenland, Greenlandics said no to these
 rules. So member states agreed that rules were no longer applicable in
Greenland

◆ The Future of the EU

● deepening
● further integration
● broadening: enlargement and giving EU more possibility to discuss all kinds of specific
matters without transferring sovereignty to the Institution

◆ supra (left) vs intergov (right) - middle is a mix of both features

- Enlargements and withdrawals:

➔ Who can join?
◆ Any European (why Morocco was told no) State which respects the values referred to in
Article 2 and is committed to promoting them may apply to become a member of the
Union (Art. 49 TEU)
◆ Copenhagen criteria:
● free-market economy,
● a stable democracy and the rule of law, and (human rights, and respect for
minorities)
● acceptance of all EU legislation, including of the euro
➔ Procedure for membership:
◆ a lot of time needed for process, show you can implement all
◆ The European Parliament and national Parliaments shall be notified of this application
(application is addressed to Council, to the Member states)
 ◆ Council acts unanimously and consults Commission (decide whether they have
potential to become a EU member in the future (e.g. if they meet the requirements
now))
◆ The Commission received consent of Parliament, which acts on majority
◆ The conditions of eligibility agreed upon by the European Council shall be taken into
account
◆ negotiation process
● process of COUNCIL TO COMMISSION TO PARLIAMENT for each decision
(30 chapters)
● accession treaty between applicant state and current member states has each
time the chapter agreed on added
◆ The conditions of admission and the adjustments to the Treaties on which the Union is
founded, which such admission entails, shall be the subject of an agreement between
the Member States and the applicant State. This agreement shall be submitted for
ratification by all the contracting States in accordance with their respective
constitutional requirements (Art 49 TEU)
- State of EU enlargement: - The current candidate countries are:
● Montenegro
● Serbia
● Turkey: concerns with human rights violations, freedom of expression, democracy,
discrimination of minorities. Also, issue of Cyprus (Cyprus will block app)
● North Macedonia
● Albania
● Ukraine
● Moldova

● Georgia tried but EU said they need more measures on democratic principles - they can just be
potential but not candidate
● another: Bosnia as potential
● commission said there is potential for them to become EU members

- Withdrawal:
● Any Member State may decide to withdraw from the Union in accordance with its own
constitutional requirements.
● A Member State which decides to withdraw shall notify the European Council of its intention.
● In the light of the guidelines provided by the European Council, the Union shall negotiate and
conclude an agreement with that State, setting out the arrangements for its withdrawal, taking
account of the framework for its future relationship with the Union.
● It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after
obtaining the consent of the European Parliament. (Art. 50 TEU)
END CHAPTER Q:
- what kind of entity is the EU?
- where does the EU come from?
- 2nd ww2 avoid by cooperation

BOOK
● But what is the European Union? One way of answer ing this question is to view the EU as a family of
27 liberal-democratic states, acting collectively through an institutionalized system of decision-making.
When joining the EU, members sign up not only to the body of EU treaties, legislation, and norms (the
so-called acquis communautaire), but also to a set of shared common values, based on democracy,
human rights, and principles of social justice.

● Most legislation is now made modified organism using the ordinary legislative procedure (OLP) - co
decision - sharing of legislative power across the EU Council and Parliament. Two successive
readings of legislative proposals drafted by the Commission.

● Most EU policies are now decided in Council upon using a qualified majority
● This includes a process called the open method of coordination (OMC), which provides a role across
framework for member states to work towards policy convergence in areas of national competence
such as employment, social protection, social inclusion, education, and youth and training, through
sharing common objectives, policy instruments, best practice, and peer pressure to achieve policy
convergence. The Commission, the Parliament, and the Court of Justice of the EU have a limited or no
role in the process, which makes this form of policy largely intergovernmental in character.

● The EU was formally established only on 1 November 1993, more than four decades after early efforts
at promoting institutionalized cooperation between European states bore initial fruit with the
establishment of the Council of Europe in 1949. Throughout the 1920s and 1930s and also during the
war years, various proposals had been drafted for federal or pan-European union. Among these was
Altiero Spinelli's 1941 Ventotene Manifesto "For A Free and United Europe', a blueprint for a
federation of European states.

● Fears of German military revival also led France and the United Kingdom in 1947 to sign the Treaty of
Dunkirk on establishing a defensive alliance and mutual assistance pact; a year later they were joined
through the Treaty of Brussels by the Benelux countries, and the following year, on 4 April 1949,
military and defence cooperation was extended even further with the establishment of the North
Atlantic Treaty Organization (NATO)

● The Treaties of Rome established the basis of the European. Union's institutional architecture.

● SEA
○ more integrationist-minded member states pushing, with MEPs and the Commission, for other
policy and supranational political ambitions to be incorporated in the revisions, including more
powers for the EP.
○ amendments to the Treaty of Rome.
○ new competences (environment, research and development, and economic and social
cohesion); established 31 December 1992

● TREATY ON EU
○ Maastricht Treaty
 ○ was designed to expand the scope of European integration, to reform the EC's institutions and
decision-making procedures, and to bring about EMU also intergovernmental cooperation on
common foreign and security policy matters (CFSP) and justice and home affairs JHA)
○ The TE introduced treaty-based opt-outs from certain policy areas for some member states.

● TREATY OF AMS
○ it added the establishment of an 'area of freedom, security and justice'
○ convince (AFS) to the EU's objectives and shifted much of JHA
○ communitarization.
○ an employment policy chapter was introduced,
○ consumer and environmental protection, greater efforts to promote transparency and
subsidiarity, and a reassertion that EU citizenship does not
○ consistency of EU action by involving the European Council more, by creating the post of High
Representative,
○ defining more precisely the EU's concept of security (the so-called Petersberg tasks' of
humanitarian and rescue tasks, peacekeeping, and crisis management, including
peacemaking)
○ allowing for 'constructive abstention' so that member states abstaining would not block CFSP
initiatives

● Preparing for enlargement and the twenty-first century: the 2000 Intergovernmental Conference, the
Treaty of Nice, and the 'Future of Europe'

● The process started in the Convention on the Future of Europe in 2002-03, which led to the
Constitutional Treaty of 2004. Despite its rejection, the EU persisted with treaty change, and produced
not a constitution, but, in October 2007, an orthodox amending treaty the Treaty of Lisbon- carrying
forward much of the Constitutional Treaty into two consolidated treaties. Although ratification was held
up by an initial referendum rejection in Ireland in June 2008, reflecting both doubts about some
elements of the Treaty and a deeper unease about the EU, this was overcome, and the Treaty entered
into force on I December 2009. increasing Euroscepticism, populism, and persistent question marks
over the popular legitimacy of the EU caused the official appetite for treaty reform to all but evaporate
for much of the 2010s, even if integrationists believed further reform was needed.

● Charter of Fundamental Rights (CFR), proclaimed at the Nice European Council;

● CT clarified its policy competences, dividing them into exclusive competences- customs union,
competition, monetary policy for the euro area, and common commercial policy- and those in which
competence is 'shared” with the member states, including the internal market, social policy, the
environment, and the area of freedom, security, and justice (AFS]).

● Treaty of lisbon
○ made it abundantly clear that the EU not a superstate.
○ sought to make the EU more democratic and efficient,
○ Article 50 TEU sets out the procedure for a member state's exit from the EU.
○ Parliamentary ratification proceeded without undue difficulty into summer 2008.
○ The main causes of the 'no' vote in Ireland were a lack of knowledge and understanding of the
Treaty of Lisbon, together with specific national concerns.
○ Ratification of the Treaty of Lisbon continued despite the 'no' vote in Ireland, with the Irish
government committing itself to holding a second referendum before 31 October 2009. Irish
voters' concerns were addressed through "guarantees' and a dedicated 'Irish' protocol, thus
paving the way for a 'yes' vote in a second Irish referendum.

CHAPTER QUESTIONS
1. How and why did the EU move towards adopting the Treaty of Lisbon!
2. What were the main features of the consolidated TEU and TFEU?

3. How well have these consolidated treaties bedded down?

4. How has the EU's treaty base changed since the Treaty of Lisbon care into force?

5. Does Brexit necessitate further EU treaty change!

6. How well have the treaties coped with the eurozone crisis and the COVID-19 panderic

7. What are the prospects for future treaty revision?

8. What role do the treaties play in developing the EU?

9. Why was supranational integration limited to 'the Six' in the 1950s and 1960s?

10. What is meant by ever closer union'?

11. Have opt-outs and mechanisms for enhanced cooperation undermined the EU as a union?

12. What impact did the Treaty of Amsterdam have on the pillar structure of the EU?

13. Why did the 1996 Intergovernmental Conférence fail to adopt the institutional reforms necessary to
prepare the EU for enlargement?
 14. Did the Treaty of Nice prepare the EU adequately tor enlargement?

15. what extent has the EU been characterized structurally by a complex mix of supranationalism,
intergovernmentalism, and differentiated forms of integration!

16. To what extent has European integration been an entirely elite-led process?

INSTITUTIONS OF THE EU:

Institutional framework:
- A single institutional framework:
- European Council, Council of the EU, European Parliament, Commission, Court of Justice of
the EU, Court of Auditors

EUROPEAN COUNCIL -executive like:

- Origin:
- Since 1974 Heads of State or Government meet a few times a year at “summit conferences”
- Became institutionalized by the European Single Act
- Composition:
- Heads of State or Government of the Member States and the President of the European
Commission
- Member States can be assisted by a Minister; President of the European Commission by a
member of the Commission
- representing interest the member states
- they are under parliamentary control
- they meet to discuss - decisions by consensus - which implies they have to make a lot of compromise
- a common approach to pressing international matters or environmental aspects
- matters of concern of EU - migration, refugees, economic integration, budget
 - important political decision
- strategic decisions on integration
- formulate “conclusions” that are sent to Parliament (they are just political decisions no input
decisions, you cannot enforce, to make them legally binding and enforceable you need
legislative act - EUR parliament Council of EU and Commission)
- Presidency of the European Council:
- Permanent presidency: European Council President
- Appointed by QMV by the European Council for a term of 2,5 years (renewable once)
- Herman Van Rompuy: 1 December 2009 until 30 November 2014;
- Donald Tusk: 1 December 2014 until 30 November 2019;
- Charles Michel: 1 December 2019 until 30 November 2024
- functions
- Chairs the meetings of the European Council
- Ensures the preparation and continuity of the work of the European Council
- Issues a report to the EP after each meeting
- Powers:
- Providing the EU with the necessary impetus for its development and defining the
general political guidelines
- Can not adopt legislative acts
- Status of decisions:
- Conclusions of the presidency: Important political decisions but not legally binding - not
legally enforceable as such
- organize euro summit for eurozone members at least twice a year
- also: high representative for the union for foreign affairs and security policy (HR)

EUROPEAN PARLIAMENT
● represents citizens and their interests
● Only directly elected European institution
● elections every 5 years - next year in June (at the national level to elect who is for the country they
are done in the same week - each member state receives a number of seats in parliament -BE: 21
seats GE: 96 EST: 7 - distributed according to population with limitations (in reality overrepresentation
for smaller and underrepresentation for bigger) so that the balance of power is well represented - MA
would be 1 or 2 seats if no limitatioin
● once you are elected in the country you are part of a EU level group not of your national group
● Composition:
○ 704 seats
○ Elections according to some common principles:
■ Voting age of 18
■ Secret ballot
■ Direct universal suffrage
■ Proportional representation
■ Five-year renewable term
■ Once elected MEP are grouped by political affinity
○ 7 political groups + non-attached members
● President of the European Parliament:
○ The President is elected for a renewable term of two and a half years, i.e. half the lifetime of a
Parliament.
 ○ The President represents the European Parliament vis-à-vis the outside world and in its
relations with the other EU institutions.
○ The President chairs the plenary sittings of Parliament and oversees all the activities of
Parliament and its bodies
○ represents parliament with regards to other institutions and represents EU to third parties
○ Now Roberta Metsola - Christians Democrats
● POLITICAL GROUPS - for exam: political parties their orientation and also know how the balance is
like which are biggest and smallest and total number of members. p182 orientation of each group
READ
○ Group of the European People's Party (Christian Democrats) - centre-right conservative
(biggest group) - 187 seats
○ Group of the Progressive Alliance of Socialists and Democrats in the European Parliament -
centre-left also big u need this and before to actually do something - 145 seats
○ Renew Europe Group - liberal - 98 seats
○ Group of the Greens/European Free Alliance - environmentalist and regionalist - 73 seats
○ Identity and Democracy Group - far right - 75 seats
○ European Conservatives and Reformists Group - right wing and eurosceptic - 62 seats
○ Confederal Group of the European United Left - Nordic Green Left - left-wing - 39 seats
○ Non-attached Members - various - 26 - they do not belong to a political group, some are
extreme right or extreme left, what do they do in parliament? not much you can do if not part of
political group who can be in commissions for real decisions, so these NAM have limited
influence pretty much just sitting but receive salary
○ total: 705 seats

● balance of power of countries for Parliament

● Powers
○ Legislative functions:
■ Ordinary legislative method (Co-decision procedure) - has become the rule in EU
■ Special legislative methods:
● Consultation procedure
● Assent procedure
○ Involvement in external relations:
■ EP has to give its assent to all agreements in those areas which are covered internally
by the ordinary legislative method - trade agreements
 ■ For all other matters: Advisory powers
○ Budgetary powers:
■ EP forms together with the Council the budgetary authority; EP has the last word on the
expenditures
○ Supervision of the Commission (task to control executive):
■ EP has the right to pass a motion of censure on the activities of the Commission,
resulting in the resignation of the Commission as a body; now also individual
responsibility of members of the Commission
■ EP has to approve the nomination of the person whom the Member States propose to
appoint as President of the Commission
■ EP has to approve the members of the Commission proposed for nomination by the
Member States
○ co-legislator with Council
● Functioning:
○ Plenary sessions, at least 12 per year in Strasbourg
○ Additional plenary sessions and meetings of parliamentary committees (20) in Brussels
○ Secretariat in Brussels, Strasbourg (staff of 4,000)
○ Decisions are taken by an absolute majority of the votes cast (save as otherwise provided in
the Treaty)
○ meetings of around 20 commissions that deal with separate policy areas and they prep the
legislation - these meetings take place in Brussels
○ 2 places because they did not want everything in Brussels - result of political compromise -
symbolic

● Evaluation
○ Political weight of EP has increased but control over Council and European Council remains
weak
○ EP is now more influential over policy than many national parliaments, why?
■ because national controlled by national part eu level not that strong link with political
group of executive and members of party in parliament
● executive and parliament less link
○ not right to initiate legislation (exclusive right of European Commission) - approve legislation
exam : why is eu parliament such an exceptional institution in the context of an international organization?
- directly elected by the people of the EU
- it is unique that an international organizational would have such a legislative body directly elected with
such important powers
- it has real legislative powers
- it is rather exceptional that you a parliamentary body in an international organization - not all int
organizations have this (e.g. UN does not have this for example)., General assembly is not
representing the people bc it is the members
THE COUNCIL OF EU - decision making heart
● Composition:
○ Consists of a representative of each Member State at ministerial level
○ Meets in various configurations depending on the subject-matter under discussion
○ Configurations of the Council:
■ General Affairs Council;
■ External Relations Council;
■ Economic and Financial Affairs (Ecofin);
■ Justice and Home Affairs;
■ Employment, Social Policy, Health and Consumers Affairs;
■ Competitiveness;
■ Transport, Telecommunications and Energy;
■ Agriculture and Fisheries;
■ Environment;
■ Education, Youth and Culture
● Presidency:
○ Rotation between Member States every six months (now (October 2023) Spain)
○ the presidency of the council prepares all the sessions and ensures continuity of the
functioning of the council
● Powers - extremely powerful, even more than par, because for all legislation you need their approval:
○ Legislative functions:
■ Carried out jointly by the Council and the EP which adopt legislation on the basis of a
Commission proposal (Ordinary legislative method: Co- decision procedure)
■ Carried out entirely by the Council, on the basis of a proposal of the Commission or the
Council (Consultation procedure)
○ Decides on the general budget together with EP but EP has the last word
○ Concludes international agreements/treaties
 ○ Develops the EU's common foreign and security policy - no transfer of sov from member states
(sensitive issue) - if policy area is sensitive issue (defined before), this Council planks major
role:
■ The Council defines and implements EU foreign and security policy on the basis of
guidelines set by the European Council.
○ Co-ordination:
■ Council must coordinate the member states’ economic policies and may impose
sanctions in this regard
■ Council coordinates employment policies of member states
● Functioning:
○ Mostly meetings held in Brussels,
○ Secretariat in Brussels (staff of 3,000)
○ COREPER (Committee of Permanent Representatives):
■ each Member State has a Permanent Representation to the EU headed by Permanent
Representative -
■ Prepare decision-making

● Decision-making:
○ Unanimity - all in favor - any member state can block decision - for sensitive matters
■ Still applied for foreign policy, taxation, common defence, social security
○ Qualified Majority Voting (QMV) = 15 out of the 27 in favor
○ System of weighted voting
○ Applied for most of the decisions
■ 55% of the Member States vote in favor
■ And represent 65% of the population of the EU - populous state have importance here
p 187
○ Simple Majority Voting = 50%+1
■ For procedural matters - admin matters
○ Evaluation:
■ Council remains a very important actor in EU decision-making but has lost influence
because of growing involvement of EP in decision-making
■ has lost importance bc of increasing of parl but still necessary
THE COMMISSION - executive body of the EU
● EC is composed of a political and administrative wing
● Composition political wing:
○ Max. number is 2/3 of the Member States (with rotation), unless the European Council decides
otherwise - TREATY OF LISBON PROPOSED THIS IDEA
○ On 19 June 2009: “European Council confirmed that the European Commission shall continue
to include one national of each Member State”
○ Now: 27 Commissioners - one per member state but acts independently from his member state
and represents interests of the EU
● President of the Commission:
○ Most important Commission member
○ Principal representative of European Commission
○ Gives political guidance to European Commission
○ Allocates portfolios
○ May require Commissioners to resign
○ Current president (from 1 November 2020 until 30 October 2024): Ursula von der Leyen
○ 5 YEARS, same term as MPs
● Commissioners:
○ Member States propose and negotiate on candidates
○ Different portfolios
○ Not always right man in the right place
○ https://ec.europa.eu/commission/commissioners/2019-2024_en
○ act on collegiality: all commissioners are responsible collectively for all decisions taken
○ college of commissioners: president, vice president and commissioners (ordinary) .
commissioners are part of admin and each commissioner has a cabinet)
○ admin: sectoral and functional hroisontal departments - called directorates-general (policy
proposal and implementation)
● Appointment of European Commission:
 ○ European Council - so member states - (Council, meeting in the composition of Heads of
States or Governments) nominates President by qualified majority taking into account the
outcome of the elections to the European Parliament, take into account the balance of power in
EUR parl (treaty of lisbon introduced Spitzenkandidaten process - every party elected in
parliament had an assigned Spitzenkandidaten)
○ In practice:
■ in 2014 Spitzenkandidaten process was introduced
■ in 2019 Spitzenkandidaten process was ignored by European Council (ignored bc when
appointment of president was taken together with who would become president for
each institution and they wanted to have a good distribution of each party in each
institution)
○ European Parliament approves or rejects the proposed nomination
○ In accord with the nominee for President, the Council adopts by qualified majority the list of
Commissioners (based on the proposals made by the Member States)
○ European Parliament approves or rejects the proposed Commission as a whole (public hearing
takes place in European Parliament, each nominee makes a statement and answers
questions)
○ Council then appoints the Commission by qualified majority
○ Term of office: 5 years (the same as European Parliament)
○ not most recent picture: vice-president was responsible for portfolio he resigned he will
participate in national elections in NETH

● Independence:
○ Commissioners have to be completely independent in performing their duties in the general
interest of the EU
● Supporting units:
○ Personal cabinets
○ Commission departments/Directorates General (DGs) and services :
○ Each DG oversees the implementation and development of laws in a specific area
○ 32.000 officials
○ Relatively small administration Specialized , high-skilled staff
○ Multinational
○ In Brussels
● Powers:
○ executive part of decision making and policy making
○ the initiative of legislation is by them - consulting parliament to see if proposal would have
enough support
○ agenda setting
○ Supervision; guardian of the Treaties and EU law:
■ Commission ensures that the provisions of the Treaties and the acts of the EU are
applied
○ Participation in legislative process:
■ Proposals and recommendations of policies and legislation:
● General principle: Commission has exclusive right to initiate legislation
● Common foreign, security and defence policy: limited role
■ Impact of lobby groups (BUSINESSEUROPE, ETUC, ETOA, ...):
● Large majority of interest groups represent business interests; only a minority
diffuse social interests
■ in close cooperation with member states: to detail and fill in EU/Council legislation by
agreeing more specific rules, often in the form of Comission directives or regulations -
delegated legislation or implementing acts
○ limited role in foreign security and defence policy
 ○ Executive powers:
■ Management of the EU budget
■ Policy implementation
○ Representing the EU internationally - in WTO - full member of WTO because they operate as
one market so common trade policy towards third parties is exclusive competence at EU level
○ guardian of EU law: supervises implication and ensure respect and application of EU rules by
member states and the other institution - take MS in front of ECJ
● Functioning:
○ Weekly meetings of College of Commissioners :
○ Decisions are taken by unanimity if possible; otherwise majority vote (collective responsibility)
○ Commissioner responsible for his/her portfolio
○ DGs headed by Directors General, responsible to the appropriate Commissioner but not
always perfect match between DG and portfolios
● Evaluation:
○ Commission is involved in the policy process from start (INTIATE )to finish (IMPLEMENT)

The Court of Justice of the European Union - represents supranationality in EU

● not involved in policy making but important role in EU legislation
● Two Courts:
○ Since September 1, 1989, institution known as the Court of Justice, consists of two
independent courts:
■ Court of Justice
■ General Court (former Court of First Instance)
● Composition:
○ Court of Justice: 27 judges ( 1 per Member State)
○ General Court: 54 judges (2 per Member State)
○ Term of office: 6 years
○ Appointed by common accord of the national governments
○ In practice Member State’s candidate always accepted
○ Often professional or civil-service background
○ coolenax: professor at KUL and is from BE in the ECJ
● Competences - Jurisdiction:
○ Important distinction:
■ Direct rulings and preliminary ruling
■ compulsory jurisdiction - International Court of justice of UN does not have this - want
to become member of EU you have to accept this jurisdiction and implement it
○ Direct rulings - institutions and member states have direct access to the court:
■ Action for annulment
■ Action for failure to act
■ Action for failure to fulfill Treaty obligations
○ Indirect/Preliminary rulings:
■ Giving interpretations on EU law to enable national courts to make a ruling
■ Exclusive right of national court to ask for a preliminary ruling - interpretation or
explanation of an EU rule:
■ Court of Justice must respond, response mandatory for national court - they will
implement it
■ Advantages:
● Promotes uniform interpretation and application of EU law
● Help for national courts to make legally correct judgments
 ● Indirect way for individuals to access Court of Justice
■ importance in development in fundamental principles of EU law:
● supremacy of EU law: EU law above a conflicting national rule
● direct effect of European rules: citizens can invoke directly specific EU rules in
front of a national court
○ Functioning:
■ In Luxembourg
■ Plenary sessions (Full Court):
■ Court decides by majority vote (secrecy of deliberation)
○ Evaluation:
■ Court of Justice clarifies and strengthens EU law
■ Court of Justice strengthens EU policy in general
■ Court of Justice clarifies powers and functioning of EU institutions
■ Main problems of functioning of ECJ:
● Lengthy procedures
● Costly procedures

BOOK END QUESTIONS

- COMMISSION
1. To what extent can the Commission be compared to national governments?

2. How influential is the Commission within the EU policy process!

3. How important is the national background of Commissioners in shaping their preferences and
decisions?

4. What is the role of the Commissioners' cabinets?

5. How is the Commission administration organized, and what are the possible implications for patterns
of contlict within the Commission?
6. What is 'comitology?

7. Which roles do national officials evoke in EU committees?

8. What characterizes EU agency networks, and what are their tasks?

- European Council and Council of EU

1. Is the Council system intergovernmental or supranational?

2. How does the Council system perform both legislative and executive functions in the EU.

3. Does the Lisbon Treaty enhance the role of the European Counci? If so, how?

4. Does the Council system resemble a hierarchy or/and a 'network?

5. Do big states outweigh smaller states in power resources and influence in the Council system?
6. How do the member states coordinate the representation of national interests in EU Council
negotiations?

7. What role does the rotating presidency play in EU governance?

8. How have Council-Parliament relations changed since the 1990s?

- PARLIAMENT

1. Why was the European Parliament created?

2. How and why have the EP's power increased?

3. Do MEPs vote according to nationality or ideology? To what extent are MEPs free from national
control?

4. What impact has the empowerment of the European Parliament had upon inter- and intra-institutional
relations?
5. How is it possible to account for the turnout in European elections?

6. What impact does the emergence of a larger bloc of Eurosceptic parties have upon the operation of
the Parliament? What, if any, impact has Brexit had in this regard?

7. What are the principal challenges facing the EP and how should it address them?

8. What function does the European Parliament serve in the EU system of governance?

- CJEU

1. What was the original purpose of the Court of justice and how has its role charged

2. What is the difference between a judge of the Court of Justice and an Advocale Cerea

3. What are preliminary references?

4. Do all questions of EU law go to the Court of justice?

5. What is meant by the Court of Justice being an 'activist court? Is this a justified label

6. How does the Court often approach legal problems when there is no dear-cut.answer

7. How and why did the Court establish the principles of direct effect, supreman, and sae

8. Does the Court always pursue solutions which further EU integration?

 POLICY-MAKING IN THE EU:
Legislative procedures
- The standard legislative procedure : resulting in new legislation which is binding
- Co-decision procedure - two institutions take last decision (renamed the ordinary legislative
procedure by the Lisbon treaty): produce introduced in treaty of Maastricht
- Commission proposes act of legislation - initiative (exclusive right to initiate)
- Dialogue between the European Parliament, the Council and the Commission
(trialogue)
- Acts must be approved by European Parliament and Council (Council cannot adopt an
act which has not been approved by European Parliament)
- these two can submit amendments to the initial proposal (e.g. make scope
broader)
- however the final outcome will be a text (maybe with amendments) on
which both parties have to agree
- no agreement reached between these two: no new legislation -
cannot negotiate for more than 3 readings
- because commission consults so much both these parties, it is easily
achieved in first reading usually, there is a triologue
- Max. 3 readings in European Parliament
- will even consult lobby groups
- Evaluation:
- Has become the main legislative procedure
- Rather technical but efficient procedure
- Democratic, strong negotiating position for European Parliament
- Good interaction between main EU institutions
- Other legislative procedures:
- Consultation procedure - oldest legislative procedure that was developed already in the EC:
- Origin:
- Original legislative procedure of European Community
- Was most widely used before Single European Act
- Procedure:
- Commission proposes act of legislation
- Council seeks the advice of the European Parliament - EP creates an advice
(scope of the EP advice - only seen as a recommendation, suggestion)
- Council votes on the proposal of the Commission
- final decision is rly just the council
- when this procedure used
- competition policy
- internal market exemptions
- Evaluation:
 -Consultation is compulsory but powers of European Parliament remain limited
-At present, consultation is still used for internal market exemptions and
competition law.
- Assent procedure (second oldest)
- Origin
- Introduced by Single European Act
- Renamed the consent procedure by the Lisbon treaty:

- Procedure:
- Some proposed acts need the assent of the European Parliament - first time in
history that EP had the power to block decision making
- European Parliament may not propose amendments, but has de facto right of
veto
- combatting discrimination for example
- Evaluation:
- Is used when new legislation on combating discrimination is being adopted
- The Parliament's consent is also required as a non-legislative procedure, when:
- the Council adopts certain international agreements negotiated by the
EU
- council concludes agreement w EP consent
- in cases of a serious breach of fundamental rights (Article 7 TEU)
- for the accession of new EU members
- arrangements for withdrawal from the EU
- European Citizens' Initiative:
- new : in treaty of lisbon
- enhance democracy and transparency in EU
- get people more involved in the policy making
- Allows citizens to suggest concrete proposals for legislative acts in any field where the
European Commission has power to propose legislation, such as the environment, agriculture,
energy, transport or trade (starting point).
- Conditions:
- To launch an initiative, it takes 7 EU citizens, living in at least 7 different Member States
who are old enough to vote.
- Once an initiative gathers 1 million signatures with minimum thresholds reached in at
least 7 countries, the European Commission must decide whether or not to take action
(they're only obliged to answer giev opinion but sometimes proposals are already
covered by a legislation or maybe commission actually not power in that area).
- Until now: six initiatives have successfully reached the required number of statements of
support.
- but nothing rly used, although the concerns have been taken into account
- aesthetic pesticides
- bee friendly environment
- The outcome of legislative procedures: EU legislative acts - by definition legally binding and above
national legislation - defined in treaty of Lisbon
- Regulation - strongest:
- Has general application (1) and is binding in its entirety (2) and directly applicable (3)
on all the Member States
- (1) binding for everyone citizens member state it is not just for one or a couple
of member states
- (2) how it must be done is very specific - strong instrument
- (3) direct effect: no need for translating it into national legislation - directly used
by citizens like in front of ECJ
- example: protecting names of certain agricultural products
 - Directive:
- Is binding, as to the result to be achieved, upon each Member State to which it is
addressed, but leaves the national authorities the choice of form and methods
- national legislation (national implementation) in this case is required (difficult to
invoke this in front of a court, you have to invoke first the national)
- example: working time (max number of working hours per week, minimum rest period,
forbids too much overtime work)
- Decision
- Is binding on those to whom it is addressed (e.g. an EU country or an individual
company) and is directly applicable
- you can directly invoke ti
- addressed to whom
- member state
- legal person: like a company
- example: approve state aid (you need decision of EU)
- also: microsoft abused its dominant decision in a sector and EU reacted
- Recommendations and opinions:
- Have no binding force
- New modes of governance - this one is the second category - more flexible :
- The open method of coordination - coordinating national policies - alternative for legislative
procedures - coordination, common objectives - not legally binding - form of intergov - have
common objectives and then follow it nationally (used in policy areas where consensus is
difficult and legally binding is difficult: employment healthcare:
- Is based on soft law mechanisms such as guidelines and indicators, benchmarking and
sharing of best practices
- method to make policy in sensitive areas in EU
- OMC works in stages:
- Council agrees on (often very broad) policy goals.
- Member states then transpose guidelines into national and regional policies.
- Specific benchmarks and indicators to measure best practice are agreed upon.
- Results are monitored and evaluated.
- Is intergovernmental (no transfer of sovereignty!) in nature.
- Is used for the promotion of employment and economic policy, also used in
other policy areas such as health care, education, ...
- Decision-making in the framework of common foreign and security policy of the EU - because
sensitive area more important roles for European council and council of the EU:
- Role of Commission and European Parliament:
- Commission:
- Has no right of initiative, Member States and the High Representative for
Foreign Affairs and Security Policy (with the support of the European
Commission) have the right of initiative
- Borrell and Charles Michel
- European Parliament:
- Optional consultation (but presidency must consult the Parliament on the main
aspects and basic choices)
- Commission president went to israel and showed support without consulting the Councils
- Decisions (non-legislative acts) are taken by the European Council and/or Council (unanimity)
on:
- the strategic interests and objectives of the Union;
 - the actions to be undertaken by the Union;
- the positions to be taken by the Union;
- the procedures for implementing the actions and positions of the Union.
- No legislative act can be adopted in the field of the CFSP
- Council animation decision making (EN) – YouTube
- Law-making in the EU - YouTube

BOOK
The policy cycle' is a useful framework for understanding how EU law-making works. Five stages are
often identified in a typical public policy cycle
- agenda-setting: identifying a problem and agreeing to do something to address it;
- policy formulation: defining the problem and its drivers, assessing options and elaborating specific
proposals;
- decision: adopting the final decision; implementation: putting the decision into effect;
- evaluation: reviewing actual outcomes and identifying possible modifications, which may

QUESTIONS
1. What are the main differences between the EU's competences?

2. What role do national parliaments play in EU policy-making?

3. How does the role of the European Parliament in policy-making vary!

4. How might the ordinary legislative procedure be simplified in the light of practice
5. Is it acceptable that many compromises over EU law are reached through informal inter institutional
negotiation.

6. What are the main inputs and outputs of the European Semester?

7. Which entities take the lead in the common foreign and security policy!

8. How may European crises affect EU policy-making?

 POLICIES OF THE EU - competences:
- Vertical and horizontal separation of powers in the EU:
- Horizontal separation of powers
- Division (separation) of powers between de institutions of the EU
- Vertical separation of powers:
- Division (separation) of powers between the EU and the Member States
- Vertical separation of powers: Areas of competences of the EU - according to lisbon treaty:
- Exclusive competences - policies and legislations only done at EU:
- Customs union - removal to custom duties among members
- Establishing competition rules for the functioning of the internal market - competition policy is
one of oldest - only about the competition rules for functioning of the internal internal market
some member states can have their own as long as it does not affect this
- Monetary policy (for the Member States whose currency is in euro) -
- Conservation of the marine biological resources/diversity under the common fisheries policy -
catch limits
- Common commercial/trade policy with regards to third countries
- goods, service, FDI
- Shared competences - member states can only exercise their competences in that policy area when
the EU does not exercise its competences in that specific field:
- Internal market
- Social policy
- Economic, social and territorial cohesion - regional policy
- Agriculture and fisheries (except what was exclusive)
- Environment
- Transport
- Energy
- Area of freedom, security and justice
- supporting policy area - MS maintain sovereignty fully EU only supports and provide incentives but
does not adopt legislation acts (Actions to support, coordinate and supplement the actions of the
Member States):
- Tourism
- Education
- Culture
- Industry, …
- Special competences - coordinate objectives:
- Defining (broad) guidelines for the coordination of the economic policies and employment
policies of the Member States
- EU shall have competences to define and implement a CFSP (in accordance with the
provisions of the Treaty)
- For shared competences:
- Subsidiarity principle - introduced with Maastricht treaty:
- to prevent EU to become too powerful - introduced then by UK
- EU can act only in areas that do not fall under its exclusive competence if the action
needed cannot be better taken by the member states (EU should only do what is does
best)
- EU Budget:
- The long-term EU budget:2021-2027
- Expenditures:
- cohesion policies finance projects for regions of the EU 35%
- natural resources and environment
- environmental protection food security rule of development 33%
- defense policy - 10%
- migration policy - 2%
- salaries - 7%
- Revenues
- multiannual financial framework - 6 or 7 seven years
- every annual budget then must stay within this framework
- collect money by contributions by member states “national contribution” % of
their GNI 0.7%
- mainly is with these contributions
- also VAT , customs duties, plastics own resource (new: uniform rate 80 cents
per kg on plastic wasted non-recycled) and the next generation of EU resources
 POLICIES OF THE EU PART 2:
- The single market - which is a shared competence with some aspects being exclusive
- Stages in the economic integration process:
- free trade area : abolishment of tariffs and quotas among members
- customs union: different from free trade area because it is a common external tariffs for
the trade in goods with countries outside of the union
- single market: or common market : free movement of goods, services, people, and
capital
- economic and monetary union: economic integration, which is still taking place, is a tool
for peace among member states
- What does this entail?
- fixed exchange rates
- harmonization of the economic policies
- sometimes: one single macroeconomic policy and single currency
- involves the coordination of economic and fiscal policies, a common
monetary policy, and a common currency, the euro - EU definition

Now we will translate this theory of stages into the EU in practice:

- First stage in the EEC: Customs union:

- The abolition of customs duties and charges having equivalent effect
- Any pecuniary charge, which is imposed unilaterally on domestic and foreign goods by
reason of the fact that they cross a frontier - ECJ
- Common Customs Tariff
- depends on product
- the average is around 6% for all categories of product
- high are agricultural and dairy product - EU protects its farmers
- Deadline in EEC (7 members): 1970
- Was achieved on July 1, 1968 - with non EEC countries (very successful ! )
- adapted via regulations
- customs duty: he tax imposed on goods when they are transported across international
borders
 - Treaty of rome main goal have a common customs union - rules fos customs union functioning
is an exclusive competence
- Next stage : single market: Free movement of persons, goods, services and capital (became clear that
this was very difficult for EEC, Treaty of Rome talked about this as next goal)
- Free movement of goods:
- Removal of quantitative restrictions and charges having equivalent effect:
- All trading rules which are capable of hindering, directly or indirectly, actually or
potentially, intra-Community trade:
- non-tariff barriers (subsidies, national product regulations and standards)
- Free movement of capital:
- Prohibition on all restrictions on the movement of capitals and payments
- Free movement of persons:
- Beneficiaries:
- Nationals of member states
- it covers qualifying workers and self employed people and companies
- Qualifying workers:
- A person who for a certain period of time performs services for and under the
direction of another person in return for which he receives remuneration
- performs economic activities
- also includes job-seekers
- Self-employed persons and companies
- Self-employed persons who perform an economic activity through a fixed
establishment in a lasting way (permanent way)
- Substance of the free movement of persons:
- Right to enter, leave and reside
- Prohibition of discriminatory measures and non-discriminatory measures
- Right of establishment:
- Right to set up and manage a company (primary and secondary
establishment)
- Free Movement of services - a service is any activity not covered by the other three freedoms:
- Beneficiaries:
- Services which are normally provided for remuneration, in so far as they are not
governed by the provisions relating to freedom of movement for goods, capital
and persons
- The provider of the service has not the same nationality as the recipient of the
service (transfrontier element)
- Natural and legal persons
- Temporary or occasional nature
- Substance of the freedom to provide services:
- Prohibition of discriminatory measures (on basis of nationality) and non-
discriminatory measures (legislation that is not favorable for people who are
working in two member states)
- services is a sensitive matter because it could result in social dumping - economic
growth was different among MS and so you might be a service provider temporarily in
another country but you follow your homeland rules
- this would cause them establishing in countries with low labor standards and
social security
- directive was added to protect post it workers and protect from social dumping
- you can use homeland but there will be fundamental standards - like in
some matters following the host country and not home country
- post it workers: employees that carry out services for an employer but in another
country
- Services Directive (2006/123/EC)
 - Objective: to realize the full potential of services markets in Europe by removing
legal and administrative barriers to trade.
- The directive was adopted in 2006 and implemented by all EU countries in
2009.
- Includes sectors like retail, tourism, construction and business services
- The Commission saw three categories of obstacles in achieving the goal of the freedoms
- Obstacles for the single market (see White Paper published by the European Commission
(1985) entitled “Completing the Internal Market”):
- Physical barriers: the borders, border checks still existed
- Technical barriers: requirements and rules for specific products, because they were
different among countries. Also safety requirements, electrical devices. These are all for
products. For people for example professions with specific diploma education was not
recognized everywhere
- Fiscal barriers: different tax regimes - especially about indirect taxes like VAT
- Method used in the EEC that was used to achieve this single market
- method used was: in order to harmonize legislation they adopted a directive
- very technical manner: the decision procedure would be complicated (only
consultation procedure was around - very simple - Council taking final decision
and the rule was unanimity. When the Commission would propose the
legislation quite often it was blocked in the EU. Very time consuming and not
very effective
- this made them realize, we have to make decision making easier - Commission
proposed 1992 programme
- 1992 Programme: achieve the single market by 1992 with a new approach:
- Concept of mutual recognition (see Cassis de Dijon, Dassonville)
- Cassis de Dijon case :
- a german company wanted to sell this products under german market
- they were not allowed to sell bc of legislation concerning liquors having a
minimum of % alcohol
- ECJ:
- introduced mutual recognition: in order to surpass obstacles to trading
goods - when a product is produced and advertised in a lawful manner in
one MS then it must be accepted in all others
- Dassonville case : it is related to free movement of goods
- 70s
- Belgian rule: you can only whisky when you have an origin or authenticity
certificate
- Dassonville wanted to sell. Went to FR and bought whisky - where certificate not
needed - and Dassonville made its own certificate
- accused of forging by Belgian authorities
- ECJ dealt with this case
- all trading rules which are capable of hindering directly or indirectly the
trade between EEC members are forbidden
- all non tariff barriers forbidden
- Community level regulation restricted to essential health and safety requirements
- Decision-making rules for single market measures: QMV (see Single European Act) - no need
for unanimity anymore
- Package of 300 proposals by Commissions together with the programme to achieve single
market
- Achievements:
- Single market has been achieved to a large extent. However it is still a work-in-progress
- achieved : the core is covered - mutual recognition of diplomas, common curriculums, specific
qualifications harmonized
- economic impact of internal market:
 - internal market has resulted in trade creation vs trade diversion
- trade creation:
- the increase in trade between two countries that results from the formation of a customs
union or free trade area
- more expensive domestically produced products in a MS are replaced by cheaper
products with the same quality of another MS — this is positive economic impact
- trade diversion:
- the import of cheap products from third countries are replaced by more expensive
products imported from another MS - generally welfare-decreasing
- difference in context of EU
- trade creation was higher than trade diversion
- intra community trade has increased by 20-30%, also with third countries
- macroeconomic effects of internal market - high expectations but less effects of this than of micro -
were limited
- new jobs were created because of this single market - but less than originally expected
- modest increase in GNI of EU
- microeconomic effects of internal market
- price convergence for certain categories of products
- a lot of mergers and acquisitions took place
- reason: because of freedom of capital, interest rates were rather low, because of
economies of scale, marginal profits became smaller because more competition sso
more options, wider variety in choice for goods and services
- general picture was positive for micro and macro although macro less than expected
EXAM PRACTICE EUROPEAN INSTITUTIONS
book ch 1 - ch2ch3 - history - ch10ch11ch12 - inst - policy - ch16 - ch20 single market

1. Are the following statements true of false? Explain in a few sentences:

a. Ursula von der Leyen is the president of the European Commission after being elected by the
European Parliament.
b. The Council of the Europe defines the general political direction of the EU.
c. If the European Parliament and the Council of the EU cannot agree on a proposed legislative
act, there will be no new legislative act.
d. Customs duties on goods imported from outside the EU are the biggest source of revenue for
the EU budget.
e. The Court of Justice of the EU played a key role in achieving the single market

2. Essay questions:
a. The EU's predecessor, the European Economic Community, was founded between six states
in 1958. Since then, membership of the EU has grown to 27 member states. In March 2022
three states submitted their application for EU membership.
i. Discuss the conditions for EU membership and indicate which institutions of the EU are
involved in the accession process.
ii. Which three states applied for EU membership in 2022 and what are in your opinion the
accession prospects for the three states concerned.
b. Has the Lisbon Treaty strengthened democracy in the EU?
i. Explain

ANSWERS

1. true or false
a. false, she was nominated by the EUropean council, EUopean council takes into account the
result of the elections for the parl. sHEE WAS APPROVED BY THE PARL.
b. false, The Council of the Europe has nothing to do with the EU
c. true under the ordinary legislative procedure, not true under the consultation procedure
because parliament’s role is limited
d. false, because the biggest sources is membership fee
 e. true, ECJ introduced a mutual recognition concept. Two cases as milestones to the single
market.

2.
a.
i. conditions for membership and institutions involved
1. conditions
a. geographical location in Europe
b. democracy
c. respect of human rights, minorities and rule of law
d. copenhagen criteria:
i. acceptance of all EU legislation - acquis communautaire
ii. functioning free market economy
2. institutions:
a. parliament, council of the EU and commission
i. commission: investigate application of the country and will formulate an
opinion on whether there is a potential for that state to become a
member - if opinion positive and shared by council then status of
candidate
ii. negotiations start regarding - deadlines, time spams they have to
implement measures of acquis comm
iii. add all from notes
iv. accession treaty needs to be approved by parliament
ii. which three states applied and opinion on accession prospects
1. moldova ukraine and georgia
2. opinion
a. moldova: has status of candidate
b. ukraine: has status of candidate
c. georgia: has status of possible in near future
d. problematic due to their issues
e. it will be a huge task for them to comply with the EU legislation
f. corruption is a possible issue
b. changes of lisbon: democracy is about involving people in policy making
i. yes
1. parliament got more power with the co-decision procedure now called ordinary
becoming the standard one
2. parliament is fully involved in procedure - cannot propose but parliament can even
formulate amendment and its consent is needed to approve EU legislation
3. when nominating a president of commission elections of parliament need to be taken
into account and their approval is needed for commission
4. for all treaties mainly trade agreements you need approval of parliament
5. european citizens initiatives - allowing citizens to formulate proposal for legislation
ii. parliament has now more control over functioning of commission but the control of parliament
over european parliament is still limited
 POLICIES OF THE EU PART 3:
- we discussed the two first stages - first was customs union (exclusive) second was common and
internal market (shared)
- for the exam know what each competence is - shared, exclusive, … and the definition of each of these
types (legislative acts have to be implemented by MS)
- competition policy - it is an exclusive competence, it has to do with the single market (very important
competence) - this exclusivity is more the policies that are necessayr for the correct functioning of the
single market - the commission plays a major role in the ocmpetition policy developped in teh EU
- major aim
- to safeguard the correct functioning of the single market
- has become the flagship of the EU
- three components
- ban of restrictive business practices
- a prohibition on agreements between firms that limit competition (art 101 TFEU)
- a prohibition on the abuse of a dominant position by one or more large firms (art
102 TFEU)
- control of mergers which create a dominant position (regulation 130/2004) - control by
commission
- prohibition of state aid (art 107-108
- general rule - state aid is forbidden
- ban on restrictive business practices (two parts: agreements and dominant position)
- ban on restrictive business practices : agreements
- all agreements between firms which may affect trade between member states and which have
as their object or effect the prevention, restriction or distortion of competition within the EU are
prohibited
- this type of agreement is forbidden in EU by definition
- what kind of agreements distort (have negative impact) the competition within the EU
- price cartels
- monopolies
- limiting of production of a specific good
- dividing market among companies active in the market
- sanction
- agreements is declared void
- the commission can impose fines or periodic penalty payments
- How are these fines assessed?
 - depends on seriousness, duration, whether it is a repeat offender
of infraction
- general rule: 10% of the overall annual turnover of the company
- how to detect these agreements
- leniency policy: the first company that provides sufficient evidence of a cartel
can receive full immunity from fine - the whistleblower
- very successful measure in the EU to detect cartels
- EU commission can decide to grant exceptions to general rule - some
agreements are allowed if it has certain conditions:
- improves the production or the distribution of a good
- promotes economic process
- consumers must always receive
- examples:
- Hofmann-La Roche, BASF, Aventis, Solvay
- involved in a cartel of multivitamins - example of where commission
imposed fine
- Johnson & Johnson and Novartis
- it does not matter that they are not based in EU, but they have a
negative impact in the competition within the EU
- they had dutch subsidiaries which concluded an anticompetitive
agreement
- J&J: they developed a long time ago and commercialized in different
formats painkiller fentanyl - had a patent on this but it expired in NETH
2005. At this same time, NV was on the verge of launching its generic
version of this painkiller. Eventually, they concluded an agrement calling
it cooperation agreement which provided incentives for dutch subsidiary
of NV not to enter the dutch market and they would receive an amount
monthly exceeding the monthly revenues that they would receive if they
entered. Blocked the entry of a cheaper medicine and J&J kept a high
price - 16 million euros for delaying the market entry of this generic
painkiller - in the pharma sector example of distorting competition
- benefits of competition policy - european commission
- ban on restrictive business practices : abuse of a dominant position is forbidden
- but once it has the effect of abusing the position they can impose sanctions
- How do you determine a company has a dominant position? 1. product market yes or no 2.
dominant position yes or no and whether abusing of it
- product market: from the perspective of the consumer it cannot be replaced by another
product - consumer’s perspective is extremely important (e.g. whether there is a
separate product market for bananas or not - banana is a specific category of fruit is
there a separate banana product market or is it in general a fruit market - can you
replace banana by another fruit)
- look at price, features, … of the product
- a banana is very specific so you cannot replace it from perspective of consumer
- there is a product market then
- this matter was analyzed by ECJ to see if product market and if dominant position
- dominant position: we talk about a market share of minimum 40%
- having a dominant position not the bad thing, abusing of it is
- what is abusing of dominant position
- setting high unfair prices
- or too low to avoid new entrants
- apply different conditions to different trading partners
- sanctions: fines or break up of company
- examples: abuse of dominant position on the belgian beer market of AB Inbev
- worlds biggest beer brewer
 - Jupiler is most popular in Belgium representing almost 40% of market in terms of sales
volume
- AB Inbev sells this beer, in Belgium and in other countries
- in NETH it sells Jupiler at a lower price
- dominant position in belgian beer market and abuse it
- they developed a strategy for wholesalers in belgium to not be bale to buy the
cheaper Jupiler beer from NETH - among methods they changed the packaging
of the NETH products they sold to wholesalers there - they removed the FR
version (which was mandatory in label), so that once bought there the
wholesalers could not sell it in Belgium because by law it should contain FR
version
- done to avoid them to import it into belgium
- they kept the prices very high in belgium - they abused their dominant position
- controls of concentrations:
- there is control because they can lead to them having a dominant position and might abuse
this position
- system of control: compulsory
- remark: not all mergers and acquisitions - only mergers and acquisitions that have a
community dimension (very big M&A, thresholds - when considered M&A of community
dimension: 1. annual turnover of the companies involved in M&A is over 5 billion euro 2.
at least two companies among the involved must have each of them an annual turnover
in the EU of at least 250 million euro)
- if of community dimension - notify
- the commission will analyze the notification and can answer in three different ways:
- 1. approve the M&A
- 2. reject the M&A as such completely
- 3. impose a number of conditions before the approve it
- every year around 300 M&A with community dimension are notified and only a small minority is
rejected - many times they impose the conditions to fix it
- examples
- acquisition of Aer Lingus by Ryanair: old example
- both are important carriers - the EU commission decided to reject it
- reason: too big of a market share for Ryanair - dominant position (also higher
prices to fly in and out of IR)
- Acquisition of Starwood Hotels & Resorts by Marriott
- the commission investigated this acquisition because both companies have
significant present in 4 and 5 stars hotels sector
- investigated this sector in a couple of cities in EU
- in each of the cities they concluded that the merge entity will continue to face
competition from other hotels like Hilton
- was approved as such
- Acquisition of SABMiller by AB INBEV
- SABMiller is the second largest brewer
- wait! both first and second
- the commission said they would approve provided that for instance SABMiller
will divest the whole of their business in different countries of EU and some
other elements
- conditional approval
- Acquisition of Alstom by Siemens
- both were important players in train transportation especially in high speed and
rail signaling market
- the commission rejected it as such
- Siemens would become a too of a market share - especially in high speed train -
too high prices for rail operators and for consumers
 - Acquisition of eTraveli by Booking
- 40 mins
- ECJ
- state aid
- what is it?
- government giving a selector or company an advantage
- examples
- grants
- tax benefits for companies
- prohibition in principle of state aid to business (whether private or state owned) which distorts
or threatens to distort competition and which affects trade between member states
- system:
- compulsory notification of any plans to grant or alter state aid to the commission
- outcomes of procedure
- positive decision
- the measure as such is not regarded as state aid or the aid is compatible with
the internal market
- conditional decision
- measure is compatible but its implementation is subject to some conditions
- negative decision
- in general the European Commission has taken the positions for specific categories of state aid
exemptions can be granted by the commission
- state aid that has social character
- state aid in case of natural disasters
- aid granted to promote economic development in areas where standard of living is
extremely low and in situation of extreme low employment
- aid to address serious disturbances in the economy of a state
- subsidies to Banks in 2007-2008 crisis - MS provided bail out and assistance to
the bank sector
- examples:
- public support measured granted by Spain to seven professional football clubs
- they granted all kinds of tax privileges to these clubs
- the commission argued this is not allowed and will distort competition - negative
decision
- the clubs had to return the unpaid taxes to the SP government
- public support for businesses affected by the COVID-19 pandemic
- a lot of MSS provided this support for the financial troubles caused by the
pandemic
- positive decision
- public support for businesses affected by energy crisis (UK-RU war)
- positive decision
- in all these cases they still notified even if pretty clear it was alright
- the commission plays a very important role in this policy area, one of the oldest policy areas
and it is an exclusive competence

POLICIES OF THE EU PART 4:

- Economic and Monetary Union:

- Final stage in the economic integration process in the EU - eo nomic integration as a tool to
maintain peace among members
- monetary policy is an exclusive competence for Eurozone countries
- economic integration is a shared competence - coordination of the economic policy of the EU
- one monetary union and unification of the macroeconomic policy of state (like fiscal policy
 - Advantages and disadvantages
- ADV
- eliminates transaction costs
- increase trade
- certainty for trade and investments
- comparable prices
- DISADV
- you give up monetary policy (because the economies of the states are not the
same you lose an important instrument to manage your national economy e.g.
interest rates, balance of payment problems you cannot devalue your own
currency)
- Debate between the ‘Monetarists’ and ‘Economists’ - on how to achieve this EMU
- monetarist
- first fix exchange rates and then the necessary cooperation among MS will
naturally occur
- economist - NETH , GE
- first thing is to coordinate our economic policies before we fix exchange rates
and introduce single currency
- maastricht was a compromise among both views
- From the Hague to Maastricht (1969-1991):
- Hague summit in 1969: it was decided to explore a possible path to EMU
- 1979: European Monetary System was introduced (it was a system of fixed exchange
rates but adjustable - margins of fluctuations 2.25% from a parity - most members
participated)
- 1989 Delors (commision president) report: roadmap for EMU (onee single currency not
just fixed exchange rates) (3 stages), integrated in Treaty of Maastricht
- why launched in this period
- reunification of Germany was a pressing matter - difficult for other states
to accept this - if germany becomes embedded in an even stronger
entity - need for an economic and monetary union
- also, the deadline for achieving the single/internal market was 1992 -
which required a MU to be that
- his roadmap was approved and details were in the Maastricht treaty which was
established in 1992 - the establishment of the EU
- Roadmap:
- Stage 1 (1990-1993):
- Free movement of capital - liberalization of the capital market (was part of how to
achieve single internal market)
- Closer cooperation of economic policies
- Closer cooperation among central banks
- Stage 2 (1994-1998):
- Convergence of the economic policies and monetary policies of the member states
(price stability and sound public finances), see*** (to secure this eurozone zone as a
low inflation area)
- Stage 3 (1999-2002):
- Establishment of the ECB
- Fixing of exchange rates
- Introduction of the single currency
- *** : Convergence criteria (Treaty of Maastricht) - must meet these in order to proceed to third stage of
roadmap
- Budget deficit should be no more than 3 % of GDP
- Accumulated public debt should be no more than 60 % of GDP
- Exchange rates should have stayed between the normal margins set by ERM for at least the 2
previous years - fixed but flexible exchange rates criteria
 - Inflation should not exceed by more than 1.5 points the average of the three best performers
- Long-term interest rate should not be more than 2 points above the average of the lowest three
- Escape clauses were provided
- example BE or IT would not be able to meet all the criteria in one decade (e.g. BE
public debt impossible)
- total debt: at least show diminishing substantial decline in budget deficit

STOPPED HERE

- From treaty to reality:

- May 1998: 11 member states would participate in monetary union from 1 January 1999 ( +
Greece in 2001); Denmark and the UK did not want to participate; have an opt-out; Sweden is
not willing to adjust its legislation
- 1 January 1999: exchange rates were fixed between the participating states
1 January 2002: 12 national currencies were replaced by one single currency, the
- euro
- New member states:would eventually have to join monetary union
- 1 January 2007: Slovenia joins euro area
- 1 January 2008: Malta and Cyprus join euro area
- 1 January 2009: Slovakia joins euro area
- 1 January 2011: Estonia joins euro area
- 1 January 2014: Latvia joins euro area
- 1 January 2015: Lithuania joins euro area
- 1 January 2023: Croatia joins euro area
- Bulgaria is is expected to join the euro area on 1 January 2025
- European Central Bank:
- Is responsible for the formulation of the monetary policy for the participating states of
the eurozone or euro area

-
- Managing the EMU:
- Stability and Growth Pact (1997):
- Was put in place to ensure that members of EMU kept their public debt and budgetary
deficit under control
- Preventive arm
Excessive deficit procedure (corrective arm):
- Once the Council, on the basis of a recommendation of the Commission,
decides that an excessive deficit exists, the member state concerned is obliged
to reduce its deficit below 3 % of the GDP
- otherwise financial sanctions can be levied against the member state
- Practice: SGP was undermined and later on revised (more flexibility regarding the
circumstances under which members have deficits in excess of 3 %)
- The consequences of and responses to the financial and economic crisis:
- The European Semester:
 - Reform of Stability and Growth Pact (sixpack (2011) and twopack (2013))
- Economic governance framework: Monitoring, prevention and correction
- Corrective arm: greater emphasis on debt criterion (60 %), even if deficit
is below 3 % of GDP
- Excessive deficit procedure is simplified and sanctions are semi-
automatically imposed (a so-called reverse majority is
introduced)
- Excessive imbalance procedure (*)
- Is established to prevent and correct excessive
macroeconomic imbalances (preventive and corrective
arm)
- Fiscal Compact (Treaty on Stability, Coordination and Governance in the Economic and
Monetary Union between 25 EU Member States (2012)) :
- Separate treaty
- Members States undertake to adopt at the national level rules that limit their deficit to
0.5 % of their GDP (at the time of defining its Medium-term budgetary objective)
- European Stability Mechanism (2012)
- Separate treaty
- Permanent rescue fund available to euro area countries experiencing or threatened by
severe financing problems:
- Banking Union (2014):
- Single Rulebook
- Single Supervisory Mechanism
- Single Resolution Mechanism
- EMU means now:
- Coordination of economic policy-making between Member States
- Coordination of fiscal policies, notably through limits on government debt and deficit
- An independent monetary policy run by the European Central Bank (ECB)
- Single rules and supervision of financial Institutions within the euro area
- The single currency and the euro area