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The Single European Act

Page history last edited by Christos Lymbouris 13 years, 10 months ago


 

Overview

 

The primary aim of the Single European Act (SEA) was, to “add new momentum to the process of European construction so as to complete the internal market” (European Commission, 2007).  It was felt that by enhancing co-operation and co-ordination within the Community, its international influence could be strengthened, thus allowing for more effective competition as a single economic entity against the United States of America and Japan (Bache & George, 2006, p. 160).  In order to achieve this, it was necessary to adapt the internal workings and decision making processes of the Community by amending the 1957 Treaty Establishing the European Community.  As will be seen, this largely involved changes to the relative powers of the institutions and the introduction of Qualified Majority Voting (European Commission, 2007).  From a theoretical perspective, the SEA arguably demonstrates the neo-functionalist concept of technical spill-over: harmonisation is achieved through necessary sequential policy development (McGowan, 2005).     

 


 

Background 

                                                                

During the mid-1980s there was a “palpable sense [...] that the EC was about to take off” (Dinan, 2005, p. 103).  The accession date for Spain and Portugal had been agreed as January 1986; although only after concessions had been granted to the Greek government in the way of a financial assistance package for the Integrated Mediterranean Programs – providing funding for the Mediterranean areas of existing member states: that is, Greece, France and Italy (ibid.)

With the enlargement came pressure for change.  The Draft Treaty Establishing the European Union - adopted by the European Parliament in 1984 – had set the stage for the eventual consolidation of the existing communities into a single European Union. (European Commission, 2007)  Furthermore, in March 1984 the Dooge Committee – comprising representatives of the Heads of State and Government – recommended that an Inter-Governmental conference be held to discuss the implementation of the long awaited internal market , the re-structuring of the institutions and decision-making processes and the consolidation of the European Political Co-operation procedure (the forerunner of the CFSP) (Dinan, 2005). 

The Commission, under the leadership of Jacques Delors, had published a White Paper in June 1985: a “clear exposition of how and why the EC should achieve a single market” (Dinan, 2005, p. 105)   Delors, as a federalist, was keen to overhaul the decision making process of the EC by introducing the supra-national concept of Qualified Majority Voting (QMV).  

The single market was an effective method by which the leaders of more sceptical member states – in particular, Margaret Thatcher and the United Kingdom – could be encouraged to support (or at least accept) QMV, as unanimity voting would clearly be incompatible with the single market.  This support was fostered by the Commission “emphasizing the practical rather than the political aspects of the reform” (Bache & George, 2006, p. 160) 

The European Council met in Milan in June 1985 to discuss the findings of the Dooge Report and the Commission’s White Paper (European Commission, 2007).  Despite opposition by Britain, Denmark and Greece – who feared that the institutional reform would erode national sovereignty – the Dooge Committee’s proposal for an Inter-Governmental conference was accepted (ibid).

 


 

Main Provisions of the Act 

 

The Single European Act was signed by the member states’ foreign ministers at the Inter-Governmental Conference in Luxembourg during February 1986.  The main provisions of the SEA were as follows: 

Economic Provisions (Dinan, 2005, pp. 393-401; McKenzie & Venables,1991, p. 2). 

The establishment of the Single Market, defined as: “an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of this Treaty" (European Commission, 2007).  This was to be achieved by:

  • The removal of physical barriers to the movement of people and goods (such as border immigration and customs posts).
  • The removal of technical barriers.  That is, freedom of movement of:
    • Labour, skills and professions.
    •  Capital and financial services.
    •  Technology and intellectual property.
    • Public procurement (i.e. provision of utilities).
    • Common testing and certification of product standards.
    • Transport – de-regulation of the transport markets.
  • The removal of fiscal barriers (VAT and Excise duties) 

 

Political Provisions (Bache & George, 2006, p. 161) 

  •  A commitment in the preamble by member states to “transform relations as a whole among their States into a European Union”.
  • A commitment to the principle of future Economic and Monetary Union.
  •  The introduction of Qualified Majority Voting for policy decisions concerning the Single Market.
    •  With the exceptions of direct taxation and movement of people.
  •  An extension of the powers of the European Parliament:
    •  The establishment of the co-operation process for QMV policies – the right to amend.
    •  The right of assent to future enlargements. (Dinan, 2005, p. 109) 
  •  Formal recognition of the European Council. (European Commission, 2007)
  •  Empowerment of the Council (having consulted the Commission and Parliament) to establish the Court of First Instance (Dinan, 2005, p. 302). 
  •  The formalising of European Political Co-operation (Dinan, 2005, p. 584)
    •  Commission “fully associated” and Parliament “closely associated”.
    •  The Commission responsible for ensuring that the external policies/actions of the Community were consistent with those agreed under EPC.

 

A full text of the Single European Act can be accessed at: http://eur-lex.europa.eu/en/treaties/index.htm

 


 

Implementation and Political Difficulties  

 

The Single European Act came into effect in July 1987 – its ratification having been delayed as a result of an Irish Supreme Court ruling which had forced the Irish government to hold a referendum on the issue (Dinan, 2005).  However, even after ratification, it has been observed that the process of implementing the SEA was rather uneven.  The commercial sector, for instance, hurried to take advantage of the newly liberalised community and shift their operations on to a more efficient European scale.  300 major company mergers took place in 1987; whereas the figure for 1986 had been just 64 (The Economist, 1988 in Bache & George, 2006, p. 163).  Businesses eagerly anticipated the completion of the Single Market programme, which the Commission’s White Paper had proposed should be achieved by the end of 1992 (Dinan, 2005).  Certainly, from a commmercial perspective, the SEA could not come soon enough.  In an increasingly competitive global market, business leaders had been pressing for economic liberalisation and standardisation within the EC throughout the 1980s.  The Thorn-Davignon Commisison, for example, was a group of information technology firms founded in 1981 to press for common technical practices and norms (Moravcsik, 1991).

 

Progress was less straightforward in the political arena.  The dominant factor in hindering the creation of an internal market was the question of economic and social cohesion (Dinan, 2005).  Achieving such cohesion was necessary if the market was to function properly – greater economic equality was required not just between member states, but also within the states.  The poorer Mediterranean states in particular, were concerned about the possible detrimental effects that could come about as a result of the extension of free market practices; these members therefore sought compensation (Bache & George, 2006).  Naturally, this request was not particularly welcomed by the richer member states and a debate arose as to how much financial assistance should be set aside for these regions (Dinan, 2005).  For instance, “the British Prime Minister [Mrs Thatcher] had an instinctive aversion to increasing the size of the EC’s coffers and let it be known that regardless of any budgetary alteration, Britain would retain its current rebate” (Dinan, 2005, p. 113).  Ultimately however, agreement was reached at the Brussels summit in February 1988 – the British rebate remained secure and Margaret Thatcher, who was of course keen to see the economically liberal Single Market programme succeed, agreed to a doubling of Community funds (ibid.).   

     

 


 

Explaining the Single European Act

 

Andrew Moravcsik (1991) illustrates a number of theoretical perspectives that may be applied to the Single European Act.  In particular, the theories of supranational institutionalism and intergovernmental institutionalism provide contrasting interpretations regarding the primary actors in the initiation and implementation of the SEA.

 

Supranational institutionalism, for instance would attribute the pressure for reform as emanating from three principal groups: European institutions, trans-national business interest groups and international leaders -specifically, Delors (Moravcsik, 1991).  This perspective can arguably be justified by the events have been discussed so far: the role of Jacques Delors’ Commission was undoubtedly crucial in setting the agenda for the political and institutional reforms of the SEA.  Additionally, the fervour with which the commercial sectors embraced the new internal market lends credence to the suggestion that the reforms were spearheaded by “an élite alliance between transnationally organized big business groups and EC officials, led by Delors” (Moravcsik, 1991, p. 24). 

However, the intergovernmental institutionalist approach – which suggests that the process of reform was instead co-ordinated by the leaders of the member states acting in accordance with their own domestic policy preferences (Moravcsik, 1991) – cannot be easily dismissed.  Certainly, it could be said that the difficulties incurred regarding economic and social cohesion were a result of differing domestic interests – a conflict between the richer and poorer member states. Nonetheless, whilst this theory may illustrate the nature of the implementation stage, it lacks the ability of supranational institutionalism to explain the role of the Commission and other non-state actors.

 


 

Bibliography  

 

Bache, I., & George, S. (2006). Politics in the European Union (2nd Ed.). Oxford University Press. 

Dinan, D. (2005). Ever Closer Union: An Introduction to European Integration. Basingstoke: Palgrave Macmillan.

European Commission. (2007, 7 10). The Single European Act. Retrieved 11 28, 2008, from Europa: Gateway to the European Union: http://europa.eu/scadplus/treaties/singleact_en.htm

McGowan, L. (2005, 5 25). Theorising European Integration: revisiting neo-functionalism and testing its suitability for explaining the development of EC competition policy? Retrieved 11 15, 2008, from European Integration online Papers: http://eiop.or.at/eiop/texte/2007-003a.htm  

McKenzie, G., & Venables, A. J. (1991). The Economics of the Single European Act. Basingstoke: Macmillan. 

Moravcsik, A. (1991). Negotiating the Single European Act: National Interests and Conventional Statecraft in the European Community. International Organization , 45 (1), 19-56.

 

 

 

Comments (2)

Christopher Guerrero said

at 4:14 pm on Feb 27, 2009

Just did aesthetic editing to keep this page in line with the agreed layout by Steven - Chris

Christopher Guerrero said

at 4:15 pm on Feb 27, 2009

This page will also need the images above to be properly referenced... as well as to ensure we will not be breaking any copyrights by using them...

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