Unification of the European Market Summary

  • Last updated on November 10, 2022

Members of the European Community began a gradual, often qualified implementation of the Maastricht road map for further unification.

Summary of Event

In contrast to the 1950-1958 period, which witnessed the birth of the integration process in Europe and during which strong Europeanists and international civil servants played major roles, the 1984-1992 process of converting the European Community (EC) into a single European Union (EU) was—with one notable exception—largely in the hands of the national leaders in the EC’s principal member states. The important exception was Jacques Delors, a French Socialist who was selected as president of the European Community Commission at the end of 1984, a particularly dark moment in the EC’s history. For more than a decade following the oil crisis of 1973, the EC had stagnated, sapped of its energy by the stagflation (economic stagnation combined with inflation) gripping Europe’s economies and the political tensions dividing its member states. Delors reenergized the integration process by arguing that the best hope for jump-starting the economies of the member states was to be found in the instrument for rapid economic growth that had been used thirty years before: advances in the process of economic integration on the Continent. Maastricht Treaty (1992) European Community European Union [kw]Unification of the European Market (Nov. 1, 1993) [kw]European Market, Unification of the (Nov. 1, 1993) [kw]Market, Unification of the European (Nov. 1, 1993) Maastricht Treaty (1992) European Community European Union [g]Europe;Nov. 1, 1993: Unification of the European Market[08740] [g]Netherlands;Nov. 1, 1993: Unification of the European Market[08740] [c]Trade and commerce;Nov. 1, 1993: Unification of the European Market[08740] [c]Economics;Nov. 1, 1993: Unification of the European Market[08740] Delors, Jacques Kohl, Helmut Major, John Mitterrand, François

By June, 1985, Delors was circulating a draft proposal for developing a fully integrated internal market within the EC by December 31, 1992. Formal commitment to that goal occurred the following year with the passage of the Single European Act Single European Act (1986) (SEA), which was slated to take effect in July, 1987. The plan called for a Europe without frontiers, including an Economic Union (by January 1, 1993) in which there would be no borders to slow down trade among member states, no obstacles to a lawyer or a doctor in one member state establishing a practice in another, a common currency, and further democratization of the EC’s decision-making process.

The single Europe objective continued to gain momentum during the late 1980’s, getting a large boost from the Cecchini Report issued by the European Community Commission in 1988. The report forecast substantial increases in economic expansion within the EC, in terms of real growth and job creation, as a result of implementing the SEA. Finally, in 1991, with the negotiation at Maastricht, the Netherlands, of the Treaty on European Union, the goals of the SEA became more detailed and more ambitious.

In ratifying the Maastricht Treaty, member states were to commit themselves to a timetable for not only a Europe without frontiers but also a true monetary union, with a single currency, by 1999. They also committed to developing a European central bank, common foreign and defense policies, enhanced power for EC institutions, common citizenship, and further harmonization of judicial, tax, social, and agricultural policies. In addition, under the Social Chapter attached as a protocol to the treaty, they committed to integration in such areas as health, welfare, and the environment. As the ratification process unfolded, however, obtaining such a union became increasingly difficult, largely for two sets of reasons.

First, the Maastricht Treaty, which emerged only after a long process of haggling among European leaders essentially favorable to the idea of further integration, proved to be far ahead of the political climate in many of the member states. Obtaining popular approval for it required a major effort by the leaders of the larger states, especially Prime Minister John Major in Great Britain, President François Mitterrand in France, and Chancellor Helmut Kohl in Germany. Had any one of these states failed to ratify the treaty, not only would the treaty have failed but in addition the integration process in Europe would almost certainly have stalled. Moreover, each of these states had its own particular set of objections to the treaty. Great Britain, for example, feared loss of control over immigration and currency matters. Germany, with its powerful central bank, was not committed to the idea of a strong central bank with policy control throughout the EU. French voters feared that further economic integration would weaken the French economy and further increase the foreign element in France.

Ultimately, ratification occurred, but only with difficulty, even with men such as Mitterrand and Major working to secure approval of the treaty. The mechanisms of ratification varied from country to country. France and Denmark held national referendums to approve the treaty, with close outcomes. French voters approved by only a 51 percent majority in September, 1992. Other states, such as Great Britain, relied on parliamentary maneuvers and compromises to secure ratification.

Meanwhile, a second element was working to complicate the ratification process. During the time between the adoption of the SEA and the conference at Maastricht, the world beyond the European Community changed in significant ways with the collapse of the Soviet Union and its Eastern European empire. To the EC’s east, new states were suddenly available for future membership. Likewise, given the collapse of East-West rivalries on the Continent, the door was open for traditionally neutral states such as Sweden to reexamine their previous reluctance to join the EC. At the same time, West Germany was faced with the immediate opportunity and task of unifying with East Germany. The option was irresistible, but the costs of unification forced the German government to reconsider its priorities. Rebuilding the East meant an enormous drain on the Federal Republic’s resources and left far less monetary support available for the EC in the member country that, prior to its reunification, had been one of the most ardent champions of the European Union scheme.

Significance

Given the problems besetting ratification of the Maastricht Treaty, the date for the official birth of the European Union was delayed until November 1, 1993. Furthermore, as a result of the concessions necessary to obtain the treaty’s ratification by even that date, the occasion largely passed with little celebration or even public notice on the Continent. Too many of the once-anticipated features of the union had been deleted or compromised for there to be much rejoicing. National passports were still necessary for even citizens of EC countries to cross national borders, no common currency was anticipated in the near future, and several states essentially had opted out of some of the treaty’s most important provisions.

The advent of the European Union thus marked a major moment in Europe’s evolution toward political, social, and economic union, but it also left Europe very much a continent still in search of its potential. The EC became the world’s largest market area, with 340 million people. The gross domestic product of its twelve members at the moment of Maastricht’s ratification exceeded $5 trillion. Excluding Greece and Portugal, the standard of living and per-capita incomes of the citizens living in its member states compared favorably with those of Americans. The EC contained several of the world’s principal capitals, some of its most solid currencies (as well as two of its weaker ones, the British pound and Italian lira), important financial centers, and two medium-grade nuclear powers. In all except political union, it had the profile of a superpower; that dream, however, was still being chased. The dynamics of further integration indicated that the chase was likely to be a lengthy one.

Two members were well behind the others economically, and future applicants for EC membership from the southern and east-central regions of Europe were cut from their pattern, not the advanced industrialized democracy model of the EC’s older members. Even among the twelve nations that ratified the Maastricht Treaty, there were obstacles to further growth not easily overcome, such as the problem of multilingualism, which forced much of the EC’s budget to be devoted to translation expenditures. The twelve countries represented nine different languages (ten if Ireland’s Gaelic is considered and still more if the official regional tongues of Basque and Catalonian Spain are included). Most of the states that later joined the EU expanded that number.

On the other hand, the reinvigoration of the integration process in Europe resulted in some important short- and long-term consequences. In the short term, the SEA had its intended effect of boosting economic growth in the EC. The very promise of a Europe without frontiers led to a tripling of the investment rate, higher rates of economic growth, and lower unemployment figures for the EC as an entity even before the Maastricht Treaty was drafted.

Progress on the political front was not insubstantial, especially measured across the two generations that had passed since the European Coal and Steel Community European Coal and Steel Community (ECSC) was launched in 1951. The ECSC’s member states retained a controlling voice in the new EU’s affairs through the EU’s Council of Ministers, in which voting was weighted by population and the larger states thus had the majority of votes. Even there, progress occurred in the sense that the issue areas requiring unanimous decisions all but disappeared. Meanwhile, the Maastricht process enhanced the status of the Eurocrat element controlling the European Commission, which stood alone in the world as a supranational body with budgetary and decision-making authority beyond the nation-state. The European Parliament continued its own unique experiment in transnational democracy.

Both European democracy and European integration were advanced by the ratification of the Maastricht Treaty. Citizens of any member state could run for local office or vote in elections in other member states. Residency, not national citizenship, became the controlling factor among EC member states. Citizens could similarly practice their professions throughout the EC once they met the professional certification requirements of any member state. When outside the EU, they could get help at the consulate of any EU state, not only at the consulate of their home country.

At the same time, political cultures throughout the new EU’s member states continued to focus on the nation, not the supranational community of Europe, and national interests remained the crucial ones to national governments. The United Kingdom opted out of the EU’s social policy programs (and the Social Chapter protocol to the Maastricht Treaty) in order to retain control in London over such areas as consumer protection, health, welfare, and the environment. The twelve member nations also failed to evolve a common foreign policy with regard to Yugoslavia’s descent into chaos on the EU’s southeastern rim.

In short, the SEA and the Maastricht Treaty brought the states of Europe nearer to political integration than ever before. Three new states—Austria, Finland, and Sweden—acceded to the EU in 1995, bringing the membership to fifteen. As the 1990’s progressed, the EU gradually moved toward successful monetary union for the twelve members who agreed to adopt the new Euro currency in 2001. In May, 2004, the EU admitted ten new members—Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia—bringing membership to a total of twenty-five countries. At the same time, member states negotiated a far-reaching new EU constitution that would have furthered and deepened the integration of member states, but French and Dutch rejection of the constitution in 2005 proved a setback. Maastricht Treaty (1992) European Community European Union

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Archer, Clive, and Fiona Butler. The European Community: Structure and Process. New York: St. Martin’s Press, 1992. Excellent source of general information on the changing nature of Europe, the institutional framework and policy achievements of the European Community, and the EC’s relationship with the outside world.
  • citation-type="booksimple"

    xlink:type="simple">Britton, Andrew J., and David Mayes. Achieving Monetary Union in Europe. Newbury Park, Calif.: Sage, 1992. Provides a brief but detailed authoritative examination of the timetable and conditions for achieving monetary union in Europe and of the obstacles to attaining the policy convergence necessary for it.
  • citation-type="booksimple"

    xlink:type="simple">Friend, Julius W. The Linchpin: French-German Relations, 1950-1990. New York: Praeger, 1991. Presents an excellent brief study of Franco-German relations and how changes in those relations both reflected the growth of the new Europe and became one of the major factors affecting the EC’s future.
  • citation-type="booksimple"

    xlink:type="simple">King, Anthony S. Britain Says Yes: The 1975 Referendum on the Common Market. Washington, D.C.: American Enterprise Institute for Public Policy Research, 1977. Succinctly covers Great Britain’s second thoughts on entry and the national referendum over whether to join the EC. Many of the most important issues in the EC during the 1970’s involved Great Britain—enlargement, the battle over energy policy, and the vitality of the integrative process.
  • citation-type="booksimple"

    xlink:type="simple">Mazzucelli, Colette. France and Germany at Maastricht: Politics and Negotiations to Create the European Union. New York: Garland, 1997. Presents discussion of the political context for the negotiations between France and Germany during the creation of the EU. Includes bibliography and index.
  • citation-type="booksimple"

    xlink:type="simple">Pinder, John. The Building of the European Union. 3d ed. New York: Oxford University Press, 1998. Provides basic information on the background of the European Union. Analyzes the policy development for the supranational machinery to unite Europe.

Kohl Becomes Chancellor of West Germany

Portugal and Spain Enter the European Community

European Economic Community Adopts the Single European Act

Sweden Applies for Membership in the European Community

Eleven European Nations Adopt the Euro

Categories: History Content