Conferences on Economic and Monetary Union, and on Political Union

by Georgio MAGANZA

The two inter-governmental Conferences on Economic and Monetary Union, and on Political Union began in the Montecitorio Palace, the seat of the Italian Chamber of Deputies on 15 December 1990. The importance of this event, part of the recent drive to speed up European integration, should be obvious-and indeed was, judging by the effect it had on public opinion in most of the Member States at the time. It underscores the fact that, with the Single Act not even five years behind them, the Twelve now have the political will to continue along a path which, by consolidating political and economic links, should bring the Community closer to real European union.

The two Conferences, which had different beginnings, were prepared in two completely different ways. The meeting on Economic and Monetary Union was triggered by guidelines laid down by the European Council of Hanover in 1988 and detailed technical groundwork punctuated by specific studies was therefore possible. But the Political Union meeting was the result of a far more recent, joint initiative by French President Mitterrand and German Chancellor Kohl in April 1990, which resulted in the Dublin Summit (in June, two months later) coming out in favour of a second conference being run alongside the economic and monetary conference, with the idea of any changes to the treaties, arising from the two sets of talks being sent for ratification simultaneously.

The Governments of Ireland and Italy, the countries which had the Presidency in the first and second halves of 1990, invited the European Parliament and the Commission to say what they thought about the two conferences, in accordance with Article 236 of the EEC Treaty (revision arrangements), and the two institutions gave favourable opinions, plus comments and suggestions on possible changes. In early December, the Council also came out in favour and its President was therefore in a position to convene the two conferences for the 15th of that month.

This article briefly describes the historical background to the Conferences and outlines the main details and possible developments in the light of the work done during the preparatory phase. Although the groundwork in fact set limits on the discussions (on a fairly one-off basis, let it be said), the parties involved are of course free to bring further topics to the conference table.

Economic and Monetary Union

At the Hanover Summit on 27 and 28 June 1988, the Heads of State and Government of the Member States continued along the path mapped out by the Single Act ( (which added provisions on economic and monetary cooperation to the EEC Treaty) and agreed to look at ways of turning this cooperation into a proper Union, while Commission President Jacques Delors was invited to chair a committee of their personal representatives which was to investigate and propose the practical stages which would lead to this Union (the EEC Bulletin contains the texts of Hanover and all other Summits).

A year later, the Madrid Summit confirmed that it wanted to go on working towards Economic and Monetary Union according to the Delors Committee's three-stage plan (broad extracts of which appeared on pp 43 et seq. of No 117 of The Courier for September (i.e. September/October 1989). Stage one, involving complete liberalisation of capital movements, was to begin on 1 July 1990 and the Council adopted the decisions relating to its commencement-i.e. the gradual convergence of economic policies and collaboration by the central banks-on 12 March 1990 (See OJ No L 78 of 24 March 1990, pp 23 & 25). Preparatory work was to be undertaken with a view to calling an Intergovernmental Conference which would gradually lead to the adoption of a single currency. The European Council made it clear that this conference would meet 'once the first stage has begun' and be preceded by the proper groundwork.

This preparation, carried out by the usual bodies (the Monetary Committee and the Committee of Governors of the Central Banks) and a high-level group in charge of identifying the potential contents of a treaty on economic and monetary union, enabled the European Summits in Paris (December 19893, Dublin (June 1990) and Rome (October 1990) to produce a timetable and lay the political foundations for the work of the Intergovernmental Conference.

The Conference, whose job has been made easier by the length and thoroughness of the preparatory phase, will have to solve the outstanding questions and, most important, come up with legal terms to describe the concepts and guidelines relating to, in particular:

-the convergence of the Member States' economic policies;
-monetary policy, managed by an independent, federal type institution (to be set up at the start of stage two) and characterised, in the final stage, by exchange rates fixed once and for all and then a single currency, the ECU.

The second stage should start on 1 January 1994 and the move to stage three be made about three years after that, in the light, in particular, of progress made with the coordination of monetary policies and the development of the ECU. Transitional arrangements for moving on to the successive stages of economic and monetary union could be scheduled to meet the situation of the various countries of the Community.

On the eve of the conference, the Commission came up with a draft treaty to make the discussions easier.

In late 1990, the Committee of Governors of the Central Banks gave the Council a draft set of statutes (2) for the European System of Central Banks- better known as Eurofed- and the European Central Bank, to be annexed to the treaty. More draft texts-on economic and monetary considerations, sometimes referring to related issues dealt with at the political union conference- were produced or announced in the early stages of the Conference.

Political Union

In early 1990, the profound changes which had taken place in Europe in the second half of 1989 and the prospect of German unification in particular were as important to the Community as the forthcoming internal market and the work on economic and monetary union.

It was against this background of thinking on the new shape of Europe and the Community's place in it, on the eve of the special meeting at which the Council was due to go into the matter, that the Kohl-Mitterrand message mentioned earlier came to underline the need to 'speed up the political construction of the

Twelve' and give practical effect to the desire which the parties to the Single Act had expressed of 'transforming all the relations between the Member States into a European Union and endowing it with the requisite means of action'. The message called upon the European Council to 'launch preparatory work for an intergovernmental conference on political union...' which would, in particular, augment the democratic legitimacy of the Union, make the institutions more effective, ensure the unity and coherence of the Union's economic, monetary and political action and define and implement a common foreign and security policy.

This initiative could not but confirm the idea (already in evidence in the Community for some time and most strongly apparent in the European Parliament) that any revision of the treaty for the purposes of economic and monetary union should also be the opportunity to boost European integration more generally and enable the Community to make a further step towards the Union recommended by the founding fathers. Since 1989, the European Parliament had in fact been calling for the future intergovernmental conference to deal with more than those aspects directly linked to the establishment of economic and monetary union and include such things as the extension of the Community's powers and improvements to the democracy and effectiveness of its institutions. Parliament had indeed proposed to lay down the constitutional bases for a European Union, to include the main features of the Spinelli draft treaty adopted on 14 February 1984, while there had been calls from within the Member States for the scope of the projected revision of the treaty to be extended.

The European Council confirmed its commitment to political union and, on 28 April 1990, agreed that there would be a detailed examination of the need to revise the treaty 'with a view to improving the democratic legitimacy of the Union, enabling the Community and its institutions to make an effective and efficient response to the demands of the new situation and ensure the unity and coherence of the Community's action on the international scene'.

The conclusions were positive and the work of the Foreign Ministers in the weeks that followed enabled the European Council, held two months later (Dublin, 25 & 26 June 1990), to establish that there was agreement on calling an Intergovernmental Conference on Political Union and make the necessary arrangements for it. Although there was nothing like the same preparation time as for the conference on economic and monetary union, the efforts of the Presidency, the Commission and all the delegations meant that the groundwork was done remarkably quickly, in September, October and November 1990. The Rome Summits in late October and mid-December 1990 then made the requisite political moves to get the Conference off the ground, for which the opening procedural formalities laid down in the treaty had meanwhile been completed.

Although the preparatory phase for the political union conference was relatively short, it was still possible to define the framework and lay down guidelines for the negotiations (4). In line with the conclusions of the latest Summit, which were drafted as a mandate, these were to be geared to:

- extensions and improvements to the Community's action, with due respect for the principle of subsidiarity. Particular attention should be paid to social policy, the environment, health, research, energy, major infrastructures, culture and education. The thinking should also extend to activities already covered by intergovernmental cooperation (immigration and visas) with a view to possible inclusion in the treaty;
- the definition of a common external relations and security policy so as to pursue (in ways as yet to be defined) general objectives laid down in the treaty- including the maintenance of peace and international stability, the promotion of democracy and human rights and aid for the developing countries. This heading, the importance of which is underlined by current international events, also covers defence policy;
- expansion of the role of the European Parliament. The conference should pay particular attention to, inter alia, the extension and improvement of the cooperation procedure, the European Parliament's involvement in appointing the members and President of the Commission and expanding Parliament's budget powers. The role of the national parliaments and the place of the regional or local institutions in the development of the Community should also be discussed;
- greater effectiveness of the institutions, in particular by extending the majority vote in the Council and stepping up the role of the Commission;
- European citizenship, the idea of which could be included in the treaty, in particular in the recognition of civic rights such as the right to vote in European Parliament elections in the country of residence, social and economic rights and the common protection of Community citizens beyond the Community frontiers.

The Conferences start work

Each Conference adopted provisions on the organisation of their work at its first meeting.

Practically speaking, the political negotiations are run under the responsibility of the Foreign Ministers and the economic and monetary negotiations under that of the Ministers of Financial and Economic Affairs, the former also being in charge of coordinating the two sets of talks. The Ministers have personal representatives to assist them.

Specific provisions have been agreed to keep the European Parliament (which was involved in the preparatory phase in inter-institutional meetings with the Council and the Commission) constantly informed of progress.

The frequency with which meetings take place (the Ministers meet every month and their personal representatives usually every week) shows just how much work there is on the agenda, but the participants have agreed in the European Council that the aim is to ratify the results of the conferences before the end of 1992.

These Conferences are particularly significant at a time when there are economic and political events to remind the Community countries of the need to consolidate their links of solidarity of 40 years' standing and to give their Union structures and capacities that are in keeping with the challenges of the years to come. G.M.