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The 1992 UK Presidency of the Council of Ministers.

On 1st July 1992 the UK took over the rotating six month Presidency of the Council of Ministers of the European Community from Portugal(1) at a crucial stage in the history of the European Community: a time when the Community faces a number of challenges which will determine the future direction and development of European integration. These challenges include ratification of the Maastricht Treaty, negotiation of the Delors II package on future financing of the Community, completion of the single market by 31 December 1992, enlargement, establishment of a common foreign and security policy, and progress on the Social Action Programme. This list is not exhaustive: there are certain to be other problems and crises both inside and outside the Community in the coming months which are impossible to predict, and to which the UK Presidency will be expected to coordinate a Community response.

Bringing even a significant proportion of these issues to a satisfactory resolution will both help set the path of the Community over the next few years and enhance the Uk's reputation within it.

Because of the structure of the Community system, there are constraints on what can be achieved by a Presidency. The policy agenda for the Council of Ministers is determined primarily by the course of events prior to and during its six month period of office, and by the |troika' arrangement, whereby the member state holding the Presidency confers with the countries immediately prior to and following it in office to discuss policy issues and priorities. Only in a secondary sense are priorities set by the country holding the Presidency of importance.

The ability of the Presidency to determine the policy agenda is further influenced by the nature of its relationship with the Commission. Although the Commission announces its own legislative programme at the beginning of each year(2), all national governments use their term of the Presidency to set their own agenda, and the UK is no different in this respect(3). Unlike the Commission, however, the Presidency has no powers of policy initiation based on Treaty provisions. According to Article 155 of the EEC Treaty, it is the role of the Commission to formulate policy and propose measures which are then considered by the Council of Ministers. While the Council, and with it the Presidency, has gained some ground from the Commission in prioritising policy in recent years, the role of the Presidency is generally limited to that of varying the speed and ordering of decision-making within the Council. The task of the Presidency can be seen rather more as crafting the resolution of policy differences. The ability to build a consensus according to some national agenda is, however, very limited.

In its quest to build a consensus amongst the various national interests, there may well be instances where the Presidency's aims conflict not only with the policies of other member states, but also with the Commission's role of safeguarding the wider interests of the Community(4). In many instances the Presidency must temper its national priorities with the need to work as a mediator between national and supranational interests to achieve results which are not only acceptable at a domestic level, but also at a Council and Commission level.

Above all, it is clearly the case that the UK Presidency is heavily constrained by the very heavy agenda which already exists. The UK nevertheless has a good record for its diplomatic ability, the technical skills of its officials and its attention to the practical problems of implementing legislation - a reputation which the UK should use to its benefit when dealing with the heavy agenda before it.

The agenda

The current agenda is a mixture of needing to complete existing programmes of change and to set the Community on the path for the next stages of integration. The member states clearly want to see the existing programmes out of the way before embarking on further radical change, if only because the Single Market places such a heavy burden of legislation on them and the EC institutions. Although there is an element of ordering priorities, the Community needs to make significant progress on all fronts, particularly if the process of widening is to be firmly agreed for action in 1993.

Before the Danish referendum the UK could realistically have expected that its main role in regard to the Maastricht Treaty would have been overseeing agreement on the new priorities and the transition mechanisms to come into effect for the Treaty to be implemented on 1st January next year. However, it now faces what would be a severe crisis if the Treaty cannot be ratified. In the discussion which follows we therefore deal with each of the main agenda items in turn to assess their needs and possibilities. It is not particularly valuable to attempt a ranking of the importance of these items or the steps within them as there are no clear objective means of doing so and their ex post importance depends upon the nature of the agreement achieved. There are, however, some general issues about the nature of the agreements recently achieved and in prospect which are likely to have a significant affect on the development of the EC.

Because of the sheer size of the agenda there is a temptation to seek ways round some of the thorniest problems in order to get through the schedule. The Maastricht Treaty shows clear signs of this, particularly with the social protocol and the process of determining eligibility for admission to Stage 3 of EMU. In part such steps merely put off decisions, particularly on more detailed matters, to a further date. But, as the Danish referendum indicates, such |details' may in fact include matters of significant principle on which member states are unwilling to make an inexplicit or blanket pre-commitment. The Maastricht Treaty also embodies the principle that the Community members need not all agree to certain steps in the process of integration, such as the social protocol or Stage 3 of EMU(5).

This is significantly different from derogations over particular items of national concern or the allowing of longer time periods for some member states or regions to |catch up'. The former are not intended to be of serious consequence to other member states, while the latter do not imply disagreement over final destination and have previously been subject to a specific timetable.

A third method of resolution is to make the terms of the agreement either so general or so qualified that almost no change in behaviour is required. At best this a face-saving means of admitting that the legislation is not really necessary but at worst it merely means that the necessary action is not going to be undertaken. Partly in an attempt to obtain Danish agreement to the Maastricht Treaty, considerable emphasis is being placed on the rather ill-defined concept of |subsidiarity'. This can provide a respectable means of resolution by helping to reappraise where the aims of Community policy can best be obtained by differentiated national (and, by extension, regional and local) action rather than harmonised action, emanating from the Commission. However, |subsidiarity' could become a euphemism for not having to apply Community policies and a means of making it easier to follow the path of agreeing to legislation but not implementing it effectively.

As President in this crucial period, the UK has the opportunity to set the tone for these agreements. It can ensure that subsidiarity is well defined and established as a route to more efficient and effective development of the Community. It can open the way to a wider and more flexible Community which accepts that differing extents of integration in particular dimensions are actually in the common interest. The more explicit these agreements the more difficult they will be to achieve. The temptation in the face of the long agenda will be to go for dilution, postponement and ad hoc exceptions in order to pass the required milestones.

Ratification of the Maastricht Treaty

According to the original timetable for implementation of the Treaty on European Union agreed at Maastricht in December 1991, it was anticipated that, following ratification by the twelve member states, it would come into force on 1st January 1993. Within this timetable, the UK Government foresaw the role of its Presidency as being to encourage prompt ratification of the new Treaty provisions by the national parliaments. The intention was that the UK would lead by example, speedily ratifying the Maastricht Treaty in the UK Parliament prior to taking over the Presidency on 1st July. In line with this original schedule, the ratification bill, seeking to amend the European Communities Act 1972, received its first reading in the House of Commons on 20th and 21st May 1992.

Following the Danish |no' vote in the referendum on 2nd June 1992, the initial response from the other member states came via Community foreign ministers, meeting in Oslo on 4th June, who affirmed that there would be no re-negotiation of the Treaty and that the objective remained ratification of the new Treaty provisions by the end of 1992. For the Treaty on European Union to come into force, it must be ratified by all twelve member states. The position of Denmark within the new European Union, therefore, still needs to be resolved during the UK Presidency.

Following the Irish referendum on 18th June, in which the majority of those voting gave their assent to ratification of the new Treaty, doubts over ratification still exist in at least two member states: France and Germany.

In France, following the result of the Danish referendum, the Senate and National Assembly, in a joint vote, approved the constitutional revisions necessary to ratify the Treaty on European Union by a large majority. President Mitterrand has announced that a referendum will be held there on 20th September. The issues at stake in France are likely to be complex and, as in Ireland, political debate looks set to be complicated by issues other than the substance of the Maastricht Treaty itself. Domestic political factors are likely to be an intervening factor, as the parties have their eye on the parliamentary elections in March 1993. Nevertheless, it is widely expected that the French referendum will result in a vote in favour of the Maastricht Treaty, and will strengthen the hand of the UK Presidency as it seeks to encourage the ratification process across the Community.

As for Germany, while no referendum is anticipated, problems have arisen due to requests from the regional governments, the Lander, that they be asked to ratify the amendment to the constitution in Germany. An agreement was reached in June between the Lander and the parliamentary groups within the Bundestag on the role of the Lander in the European Union, under which Article 23 of the German Constitution must be amended. According to this amendment, the Bundesrat will have to approve any transfer of sovereignty to the Union, and the Lander will have the right of review on matters which fall under their exclusive competence, such as education policy. Where such matters concern also the European Union, a Lander official may be delegated to represent the German position in Community deliberations. In other areas, the Lander will be able to contribute to the formulation of German policy on Community matters through discussions with the Federal Government. This debate over the role of the Lander under the new Treaty provisions has already been linked by political commentators in Germany to the concept of subsidiarity and it is probable that this agreement with the Lander will enable ratification of the Maastricht Treaty in Germany.

In the light of these recent events, the UK approach towards encouraging the ratification process has been modified over the past months. The second reading of the Maastricht Bill in the UK Parliament has been delayed until the autumn. The UK will now use its Presidency to seek possible solutions to the Danish problem, while simultaneously encouraging other member states to proceed with the ratification process. The intention is that once a political compromise is found to solve the Danish problem, the Maastricht Bill will then be re-introduced in the UK Parliament.

Since the beginning of June, there have been indications of an evolving UK approach to how the Presidency might be used to solve the problem of the Danish |no' vote. The initial response of the Foreign Secretary, Douglas Hurd, was to reiterate the view of other member states that the ratification process of the Maastricht Treaty would continue, despite the Danish |no' vote.

It has been suggested that an additional protocol could be added to the new Treaty, formally setting limits on the powers of Community institutions. In this way, the protocol would aim to address Danish concerns about a centralised EC without altering the substantive body of the Treaty text. The introduction of a new protocol would have strategic benefits for the UK Presidency: any alteration of the Treaty text would be seen to amount to a re-negotiation of the Maastricht Treaty, a move which would require another intergovernmental conference (IGC). The prospect of another IGC to re-negotiate the Treaty has been rejected by all member states, including the UK Government, which would not want to jeopardise the concessions won at Maastricht, particularly in relation to social policy and monetary union. Under the UK interpretation of the additional protocol, since it would lie outside the body of the text, and would not fall within the scope of the Treaty, a further IGC would not be necessary. Under this scenario, once an additional protocol had been added to the Treaty, the Danes would then be free to re-submit the Maastricht Treaty to its electorate in a second referendum. The process would thus be one of reinterpretation, rather than renegotiation, of the Treaty agreed at Maastricht last December.

One clear outcome of the Lisbon European Council meeting in June was the assertion in the final communique that the Danish people's rejection of the Treaty on European Union did not alter the determination of the other member states to press ahead with the objectives agreed at Maastricht.

It was noted above that indications are that any reinterpretation of the Treaty would centre on a clear definition of how the Maastricht Treaty would work in practice, focussing on the division of competences between the Community and member states. The preferred UK approach may be to use the notion of subsidiarity to emphasise the decentralising tendencies of the new Treaty and allay the fears of increased powers for the European Commission. The German Lander are reported to have responded enthusiastically to suggestions of a declaration on how the principle of subsidiarity would work in practice(6). At the Lisbon Summit, these issues were addressed by the decision to accept the offer made by the Commission to report within 18 months on those Community rules which could be modified or removed by closer recourse to the application of subsidiarity. The Commission undertook to justify future proposals in relation to subsidiarity. The debate was further widened by the Commission's suggestion that even in areas of Community competence, such as the environment, responsibility for ensuring compliance with EC legislation could be the responsibility of the member states themselves. From these early developments following the Danish referendum, it is clear that some element of decentralising tendencies are being sought to resolve the current institutional dilemma.

A second, less likely, scenario which has been suggested(7) would see a strictly limited renegotiation of the Treaty, culminating in a new agreement on Treaty amendments at the Edinburgh European Council meeting in December 1992. This is not thought to be the preferred way forward for the UK Government, and would jeopardise many of the agreements reached at Maastricht. It would also stimulate new demands to supplement the previously agreed provisions: Belgium, for instance, has indicated that in such circumstances it would renew its demands for increased use of majority voting on foreign policy issues(8), while Germany might be tempted to press for increased powers for the European Parliament.

However, any compromise on the Maastricht Treaty which the UK Presidency feels it can achieve must receive the support not just of the Danish government, but a majority of the Danish people, assuming that their national government decides that holding a second referendum, is the correct option. Neither of these events in Denmark can be considered a certainty at the present time.

In one sense, the chronology of these events could not be more appropriate. The current internal difficulties which the Community now faces coincide with the Presidencies of the UK (between 1 July and 31 December 1992) and Denmark (from 1 January until 30 June 1993). The possibility of resolving the problem of ratifying the Maastricht Treaty paradoxically offers an opportunity for the UK to be cast in a light in which it is rarely viewed: as the advocate of Community integration.

There is, of course, always the chance that accommodation with Denmark does not seem possible. The Danish government might feel that the concessions made will not be approved in a second referendum, or they might find that the protocol is rejected by a new referendum. This really would complicate the task as a further failure would either entail a |variable geometry' and considerable pause in the process of deepening the integration of the EC. It might also be possible to rescue some parts of the agreement such as EMU while leaving others for renegotiation at a later date. The |political union' elements of the Treaty were in any case added at a later date and show signs of the greater haste in their framing(9). However, some member states attach more importance to the political aspects, suggesting no easy way out.

The Delors II package

Ratification of the Maastricht Treaty is perhaps the thorniest issue facing the UK Presidency as it involves not merely influencing governments but also getting the Danish electorate to make a significant change of opinion. However, the new budget perspective could also be a watershed in the development of the Community if it can make substantial changes to the pattern of spending and revenue raising.

The Delors Il proposals are a means of achieving greater spending on structural operations and implicitly transfering resources towards the less favoured regions while taking only limited steps over reforming the major spending programmes and redistributive features of the budget.

As we showed in NIESR (1991) the price support element of the Budget lies at the heart of the problem. Not only does it dominate spending (see Table 1) but it also affects the pattern of revenues and hence net contributions. The Community raises revenues from four |own resources': agricultural levies, customs duties, VAT and fourthly, contributions related to GDP. Only this last is clearly related to the ability to pay but it is not normally drawn on as the first three resources have generated sufficient revenue. By raising spending substantially and by capping agriculture support the Delors II proposals automatically introduce greater equity into the pattern of net payments.
Table 1. Delors II package financial perspective
Commitment appropriations 1987 1992 1997
(billion ECUs 1992)
1. Common agricultural policy 32.7 35.3 39.6
2. Structural operations 9.1 18.6 29.3
(including Cohesion Fund)
3. Internal policies 1.9 4 6.9
(other than structural operations)
4. External action 1.4 3.6 6.3
5. Administrative expenditure 5.9 4 4
(and repayments)
6. Reserves 0 1 1.4
TOTAL 51 66.5 87.5
Payment appropriations required 49.4 63.2 83.2
as % of GNP 1.05 1.15 1.34
Own resources ceiling (none) 1.2 1.37
as % of GNP (ex. VAT 1.4%)
N.B. Based on average annual GNP growth of 3.1% for 1987-92
(actual) and 2.5% for 1992-7 (projected).


The extent of the previous inequity is considerable - sufficiently great for the UK to negotiate a significant rebate to offset some of the impact. Even so, major discrepancies remain (see Table 2). Spain thus far has been the major loser, although an ending of the rebate would have serious consequences for the UK.

Delors II avoids tackling the problems head on, and indeed resolving the GATT blockage through some further agricultural concessions might ease it further. However, the unwillingness of some member states to contemplate budgetary expansion on this scale brings the Community face to face with the issue. It is not as if it were new. Padoa-Schioppa(10) showed very clearly how a more equitable scheme could be introduced for net-financing, based on GDP per head in the member states even before the last budgetary perspective.(11) Such a move separates the issues of what the Community's spending priorities are from the equity of finance.

Previous experience shows that tackling the problem head-on will not work. Still less does it appear possible to make a lot more progress in addressing the main source of inequality, the price support in the CAP. Nevertheless, an increase in equity at the expense of spending plans could be a basis for compromise.

On 9th June 1992, the Finance Ministers of the twelve member states, meeting in Luxembourg, formally discussed the Delors II package for the first time. The Commission's five-year spending proposals involve a 30 per cent real increase in the Community's 46 bn ECU annual budget by 1997, and seek an annual increase in its budget of 5.6 per cent after inflation, almost 10 per cent annually in cash terms. The initial response of the national finance ministers meeting in Luxembourg was cautious - indeed, the proposal was openly criticised by all but four of the twelve member states for demanding too much at a time of fiscal restraint.

In the light of initial criticisms, the Commission proposed a compromise financial package at the Lisbon European Council meeting at the end of June 1992. The compromise would have extended the Community revenue ceiling of 1.2 per cent until 1999, rather than the original proposal for an increase to 1.37 per cent.

However, lack of enthusiasm for the new package amongst the member states, and in particular the refusal of northern European countries to commit themselves to double the structural fund aid to southern member states via the Cohesion Fund, resulted in the compromise proposal being withdrawn by the Commission. As a result, final agreement on future Community financing will, as expected, fall under the responsibility of the UK Presidency in the second half of 1992. The Luxembourg meeting of foreign ministers of the member states confirmed on 20th June that a final decision on the Delors II package would not be taken until the Edinburgh European Council meeting in December. In the meantime, the UK must start the process of political negotiation again following the withdrawal of the Commission compromise package.

As part of this |back to basics' approach, the UK Presidency has sent an 85-point questionnaire(12) to the other eleven member states, with the aim of promoting discussion of the key issues in the period between July and the end of September. The main issues set out in the questionnaire cover the broad themes likely to characterise the UK Presidency, namely: whether the Community budget should grow faster than the rate of national budgets, whether the ceiling on member states' own contributions should be raised, and whether Community expenditure should be increased in real terms. It is anticipated that hard political bargaining on these issues will take place between October and the Edinburgh Summit at the end of this year.

As we noted above, the position of the UK in its role as President of the Economic & Finance (ECOFIN) Council will be further complicated by the need to defend the annual budgetary rebate which was agreed at the Fontainbleau Summit in 1984, but must now be renegotiated as part of the overall discussion on financing of the Community. The task which faces Norman Lamont as President of that Council thus requires a careful balancing act to represent both the Community and the national interest simultaneously.

The UK position during its Presidency will be one of seeking to maintain the status quo: the UK Government sees no need to increase Community spending. At the Luxembourg meeting of EC Finance Ministers in June, the Chancellor of the Exchequer argued unsuccessfully for a detailed response from the Commission to the recent Court of Auditors report which found serious weaknesses in the four main pillars of Community spending: the Common Agricultural Policy, the structural funds, research and development, and development aid(13). The UK position favours more efficient use of current Community finances rather than any increase in the amount spent. The theme of budgetary efficiency is likely to remain a priority during the Presidency.

Completion of the Single Market

The UK Presidency has already highlighted completion of the Single Market as one of the main tasks during its six month term. In particular, the Prime Minister has stated that the UK will stress the benefits of the Single Market for the ordinary citizen - he singled out air fares as one area where consumers would see benefits in price reductions.

The target date for completion of the Single Market is 31st December 1992 - at the end of the UK Presidency - and the Government has undertaken to see through those outstanding measures which it considers necessary for the functioning of the internal market.

The notion of |completion' of the Single Market has come to symbolise far more than the adoption of 282 legal and administrative provisions which, according to Lord Cockfield's 1985 White Paper, would facilitate free movement of goods, labour, and capital necessary to establish an internal market in the Community. The end of the UK Presidency is certain to mark a symbolic stage in what will continue to be a continually evolving process in the economic integration of the Community.

During its Presidency, the likelihood is that the UK will emphasise public procurement, plant and animal health standards, trademarks and copyright legislation as key areas where agreement must be reached before the end of the year, since these are areas where the UK Government recognises a clear need to remove existing barriers to trade in order to establish the conditions necessary for the proper functioning of a Single Market.

The first major breakthrough of the UK Presidency came on 27th July, when agreement was reached on the principle that a legally binding minimum standard rate of value added tax is necessary for the proper functioning of the Single Market. Following a non-binding agreement on VAT rates in 1991, the new agreement will require member states to impose a minimum VAT rate of 15 per cent from 1st January 1993. The agreement will be reviewed after a five year period.

The UK Government, previously opposed to the principle of ceding to Brussels the right to determine taxation levels, appears to have accepted the principle of a minimum rate for VAT as part of a wider package of agreements on VAT and excise duties which are thought to safeguard the interests of the Scottish whisky industry.

There remain, however, a number of issues on which the UK is opposed to the Commission's current proposals, particularly with regard to administrative provisions neccessary to remove all remaining border restrictions. Progress on this area may prove difficult during the UK Presidency.

In addition to overseeing adoption of proposed Single Market legislation, certain core issues outside the |1992' Programme seem certain to receive the high priority during the UK Presidency due to the necessity for their adpotion before a truely open European market can be established. Into this category would fall two areas deemed too complex to be dealt with in the original Cockfield White Paper on Completion of the Single Market: liberalisation of energy markets and liberalisation of transport markets. Both are areas likely to receive a high profile during the UK Presidency.

Completion of the Single European Market is, in practice, dependent not only on the adoption of the 282 legislative measures, but implementation of those measures through national law and the subsequent enforcement of these measures by national supervisory authorities(14).

Implementation of EC measures has tended to focus on their legal form rather than whether behaviour becomes at all harmonised. Despite the equalising forces of the threat of capital and labour movements, in practice compliance with Community rules can vary substantially across countries, thus diluting the idea of a level playing field. Extending national, and indeed regional or local, responsibility may merely permit continuing heterogeneity and market segmentation in areas where the Single Market could be expected to reap considerable gains. Here an agreement to apply subsidiarity may be the equivalent to failing to tackle a problem adequately, in the same way that framing a directive so that hardly any behaviour is affected is not really harmonisation in any useful sense of the word.

Enlargement

The UK has long been a strong advocate of widening the free market in Europe and the attractiveness of setting this in train both for the expansion to members of the European Free Trade Association (EFTA) and for closer links with central and eastern Europe is enormous in political terms. Nothing is likely to be achievable in the first respect until the Edinburgh summit, excepting the receipt of further applications.

Generally, enlargement can be considered in two phases: (i) the EFTA countries, and (ii) Eastern European states. A decision must also be taken on what role the so-called |micro-states' (Malta, Cyprus, Liechtenstein) will have in the Community. While it may be logistically problematic to accord the micro-states full membership of the Community as it stands in its present form (for example, doubts exist over how the micro-states would cope with the administrative burden of the Presidency), Italy and Spain have already made clear that they see no reason why Malta should not be included in the next wave of enlargement.

It is hoped that the European Council meeting in Edinburgh in December 1992 will mark the starting point of negotiations for the first phase of enlargement, at least as this involves the EFTA countries. The EFTA countries (Austria, Switzerland, Norway, Finland, Iceland, Sweden) have already accepted a whole range of Single Market legislation by signing the European Economic Area Agreement with the Community in 1991, and their economic and political similarities with the Community member states have established their credentials as prime candidates for membership of the EC within the next decade.

The question of the second wave of new members to the Community, that of the emerging democracies in Eastern Europe, is clearly more complex and involves a longer time-scale, particularly given that one of those countries awaiting Community membership (Czechoslovakia) has signalled its intention to split into two separate nation states as recently as June 1992.

Concessions towards central and eastern Europe are different because economic difficulties may make them a necessity in the short run. Current concessions may be sufficient for a while, but enforced action seems inevitable at some stage.

In addition to the four countries likely to form the next wave of enlargement Austria, Switzerland, Sweden and Finland), six other applicants have already emerged (Czechoslovakia, Turkey, Cyprus, Malta, Poland and Hungary) and this list may be swelled further, particularly by Central and Eastern European states.

Any further enlargement of the Community will place a tremendous institutional and financial burden on the existing system. This is the reason why it is generally recognised that ratification of the Maastrict Treaty, agreement on future financing of the Community and completion of the Single Market are prerequisites for the next stage of EC enlargement. However, while these arrangements may enable the large EFTA countries to be incorporated into the Community, major instutional changes will need to occur before this process is taken further. The Maastricht Treaty contains provisions which require another IGC to be convened in 1995 to undertake those measures considered neccessary to achieve closer convergence of the European Union.

The issue of enlargement was debated at the Lisbon European Council meeting on 26-27th June 1992. Discussion at the meeting centred on responses to the Commission's report on enlargement of the Community, setting out the problems of the next wave of countries seeking membership into the Community.

The UK Government has already made clear that it will use its Presidency to make the Community more open to the outside world. The theme of openness would, it is expected, be embodied by preparatory discussions with members of the the European Free Trade Association (EFTA) prior to formal negotiations on accession with Austria, Switzerland, Sweden and Finland. Implicit in the UK approach is the premise that negotiations on enlargement would add fresh impetus to the process of ratifying the Maastrich Treaty. Not least, it is hoped that the inclusion of the other Scandinavian nations within the Community will convince the Danes that their future remained within the European Union.

Conversely, however, it should be recognised that the Danish |no' vote has indirect implications for negotiations over future enlargement of the Community which, in principle, were due to start in 1993. At the |conclave' meeting of EC foreign ministers in Luxembourg on 20th June to discuss preparatory texts prior to the Lisbon European Council meeting, a majority of member states took the view that negotiations should not begin until ratification of the Treaty on European Union was complete and that agreement on the Delors II financial package had been reached. This position was reiterated in the final communique at the Lisbon Summit.

There may well be calls now for a period of reappraisal within the Community before the outward-looking process of enlargement begins in earnest. During this interim period, the UK Presidency would be well placed to play a constructive role by laying the groundwork for enlargement of the Community.

Common foreign and security policy

The Foreign and Commonwealth Office has already announced(15) the main objectives of the UK Presidency in the field of common foreign and security policy (CFSP). Priorities during the Presidency will be to establish working arrangements for entry into effect of CFSP once the new Treaty on European Union comes into force in the member states, and to prepare decisions by the Council on areas where joint action by the member states is appropriate.

The Foreign Office Minister responsible, Tristran Garel-Jones, in setting out the UK Presidency's priorities for CFSP to the European Parliament Committee on Foreign Affairs and Security(16), highlighted four areas where preparatory work can begin: (i) the CSCE process, (ii) disarmament and weapons control, (iii) non-proliferation of nuclear weapons, (iv) economic aspects of security.

The need for a more coordinated Community approach to external affairs is clear. Following widespread criticism of the lack of a coherent Community response to the Gulf crisis in 1990-91, the continuation of the civil war developing in Yugoslavia is likely to require rapid responses from the Community, coordinated by the Presidency, during the second half of 1992.

While the political and military situation in Yugoslavia remains complex, there are opportunities for a UK-led diplomatic breakthrough with the role which the Foreign Secretary, Douglas Hurd, will be required to play in taking forward Community initiatives to bring a halt to the escalating problems in the region. In addition to the role of the current British Foreign Secretary, a past holder of the office, Lord Carrington, holds a central position as head of the Community delegation seeking a negotiated peace agreement.

A key initative during the UK Presidency emerged on 28th July, when the Britain announced that it would convene an international conference on Yugoslavia, to be held in London at the end of August. The convening of a conference follows requests from both France and the UN Security Council. In preparation for the meeting, the Foreign Secretary announced that he would personally undertake visits to other EC member states and the UN in order to intensify peace efforts.

Social policy

The Social Action Programme, like the Single Market, is supposed to be completed by the end of 1992. The problems over ratification of the Maastricht Treaty may delay it because of doubt over the status of the new social protocol. The relative merits of bringing forward or holding back measures depending upon which treaty will apply remain confused if the Maastricht protocol is in doubt.

Nevertheless, the effect of the UK decision at Maastricht not to sign the Social Protocol, and therefore not continue along the path laid down by the 1989 Social Charter, may have indirect implications for the conduct of the UK Presidency of the Social Affairs Council in the second half of 1992. Amongst those measures within the Social Action Programme still awaiting adoption are the proposed directives on working time, collective redundancies, posted workers, works councils, maternity rights, and mutual recognition of professional qualifications involving training of less than three years duration.

Having reaffirmed their decision not to follow the principles laid down in the Social Charter, it is likely that the UK Presidency will concentrate on those aspects of the Social Action Programme which fall under the existing social provisions of the EEC Treaty, and where the UK feels that there is a consensus and a genuine need for coordinated action at the Community level.

The Secretary of State for Employment, Gillian Shephard, has already stressed(17) that, under the umbrella title |A Community at Work', the UK Presidency will continue to work for an EC social policy which will benefit individuals, keep Europe competitive, and help job creation. Setting the theme for the UK Presidency of the Social Affairs Council, she called for member states to be left free to decide on issues best dealt with at a national level, while social policy at a Community level tackles issues which are properly those of the Community. Such an approach, it is argued, would be in accordance with the concept of subsidiarity, as enshrined in Article 3 (b) of the Maastricht Treaty.

Health and safety at work exemplify areas where the UK favours Community action. Since 1992 was declared European Year of Safety, Hygiene and Health Protection at Work by the Social Affairs Council meeting in July 1991, the issue is likely to be a successful area for the UK to highlight. It is this emphasis on practical issues where a consensus already exists that is likely to provide the most productive results during the 1992 UK Presidency.

With only one informal and one full Social Affairs Council meeting timetabled by the UK Presidency(18), the target for completing the Social Action Programme by the end of the year is now not likely to be met. The UK Government has, however, been quick to point out that it is the only country to have applied the 22 directives so far adopted in the EC social policy sphere(19). Furthermore, it is certainly also the case that the UK has not voted against the adoption of other proposed directives, such as the measures on working time or maternity rights, and that it is other countries which are encountering problems with the text of these proposals. Thus it may be possible to spread the |blame' for not completing the programme on time.

Towards a variable geometry Community?

At the beginning of this note it was acknowledged that the agenda for the UK Presidency will be determined largely by the events prior to and during its six month tenure of office. These events include the Danish rejection of the Maastricht Treaty, special arrangements under the new Treaty for the UK on monetary union and social policy, a growing debate in other member states over the implications of European Union, a reappraisal of Commission powers in light of the concept of subsidiarity, and the need to consider applications for membership from other countries, which will almost inevitably lead to further enlargement of the Community.

In the light of the emerging agenda of the Presidency, it is possible to see the Community entering a new phase in its development, after the Maastricht Treaty, coming to terms with the Danish referendum result and addressing the central issues of completing the Single Market and reforming the Community's financial arrangements.

A major question which emerges from analysing the agenda of the Presidency is, however, the extent to which the Community is moving towards a series of institutional arrangements characterised as |variable geometry'.

First proposed by M. Delors in the context of the French Economic Plan in the late 1970s, the concept of variable geometry aims to retain the acquis communautaire, but would graft on to it selective collaboration for particular kinds of policy areas. In essence |variable geometry' seems to describe the idea of a group of member states which decide to proceed together at a faster pace than others in a number of clearly defined policy areas. By doing so, the group of member states who wish to move faster would not seek to disturb the acquis which exists on the wider spectrum of policy areas, however they would certainly set the pace of Community integration and exclude other member states from the policy formulation process - albeit at their own behest. What seems possible now is a more complex variable geometry, where different overlapping groups of member states wish to move forward further in one or other dimension of EC policy.

A number of issues on the agenda for the UK Presidency already show signs that a variable geometry Community could emerge from the current difficulties which the member states must address: it is apparent in the Danish referendum result, in the British opt-out from the social protocol and monetary union, the current debate on subsidiarity, and the likelihood of further enlargement of the Community. It will be the task of the UK to preside over discussions on whether the Community in effect retains a unitary form.

Conclusion

The still evolving role of the Presidency has contributed significantly to the efficiency and adaptability of the EC decision-making process. At the Community level, the role which an active Presidency plays as chief negotiator and consensus-builder ensures that it is viewed as a help rather than a hindrance to the Commission in the policy process. The role of the Presidency is thus one of advancing the progress of the Community, not one of advancing the interests of each member state in turn for six months.

Clearly, however, it would be a feat of remarkable schizophrenia if in trying to advance the Community agenda the particular member state had no regard for its own specific interests. At the national level, the Presidency does offer a member state certain opportunities to influence the outcome of Council decision-making and enhance its own international reputation. However, the extent to which objectives are achieved will be largely dependent on the workload it is presented with, a willingness to set an achievable agenda, build a consensus at every level of Council activity, and use the limited time and resources available during the six month term of office to best effect.

A really successful Presidency resolves issues holding up change while achieving compromises which are consistent with domestic policy. In current circumstances, that goal is unlikely to be fulfilled totally during the UK Presidency, as on some issues the UK is in a clear minority position.

Furthermore, six months is an extremely short period of time in the decision making process of the Community. Decisions are not necessarily irrevocable and it may be possible to bring back items, which are deferred or are the subject of only lukewarm agreement, under subsequent Presidencies. For many measures to succeed, they must obtain the wholehearted support of the subsequent Danish and Belgian Presidencies, which may have to see those initiatives through to completion.

Most of the opportunities which will be available to the UK are the result of long periods of negotiation and preparation. Resolution can nevertheless bring considerable acclaim to the incumbent member state. Whether or not the Maastricht Treaty is ratified, that step in the development of the Community will always have a Dutch label, even if one might want to argue that the |nonpapers' organised by Luxembourg were a key step in the resolution of issues.

The very nature of the Presidency dictates that too much should not be expected from the UK's term of office between now and the end of December 1992. The Presidency system is a rolling process, with limits on what can be achieved during each six month tenure. This is especially true when, as at the present time, the incumbent member state is faced with a heavy agenda. Overall, it is important to recognise that the Presidency is not designed to leave a permanent imprint on the Community. Instead, it allows each member state to contribute to the policy process by using its six month term to set priorities within the existing agenda, coordinate negotiations, and seek to build a consensus on issues outstanding at the Community level.

The UK will undoubtedly receive considerable credit if it steers the Single Market Programme through to |completion' by the end of the year and there are already plans for a symbolic ceremony opening the new era on 1st January 1993. However, a more impressive accolade would come from unblocking the Uruguay Round of Gatt negotiations or from pioneering a new financing system for the EC. In the longer term this Presidency may be seen as a crucial step in the emergence of a variable geometry Community.

NOTES

(1) Under Article 146 of the EEC Treaty, the office of Presidency shall be held for a term of six months by each member of the Council in turn. The sequence until the end of 1992 runs in alphabetical order (according to the name of the country in its own language) and has been: Belgium, Denmark, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and the UK. To change the order in which each member state holds the Presidency, the new cycle, beginning in January 1993, will be: Denmark, Belgium, Greece, Germany, France, Spain, Italy, Ireland, the Netherlands, Luxembourg, the UK, and Portugal. (2) The Commission's programme for 1992 was announced by Jacques Delors, President of the European Commission, on 12 February 1992 and is published in Supplement 1/92 of the Bulletin of the European Communities. (3) This point is made by Mazey, S. & Richardson, J. in a paper Interest Groups and European Integration presented to the Political Studies Association, Belfast, 7-9 April 1992. (4) The relationship between the Presidency and the Commission is not set down in the EEC Treaty. (5) Britton, A.J.C. and Mayes, D.G., (1992), Achieving Monetary Union, Sage, translated as Maastricht - und was dann?, Verlag Moderne Industrie. (6) The Economist, 12th June 1992. (7) New Statesman & Society, 12 June 1992. (8) The Economist, 12th June 1992. (9) Britton, A.J.C. and Mayes, D.G., (1992). (10) Padoa-Schioppa, T., (1987), Efficiency, Stability and Equity, Oxford University Press. (11) His proposals are particularly interesting as he uses a log-linear rather than a linear form for the redistributive formula thus increasing the gain to the low GDP/head member states more than proportionately but avoiding an excessive burden on the richer by increasing their net contribution less than proportionately. (12) The questionnaire dealt with the following issues: (i) financial perspectives; (ii) agriculture; (iii) monetary reserve; (iv) budget; (v) structural funds (including the cohesion fund); (vi) internal policy (for example, R&TD and trans-European networks); (vii) common foreign and security policy; (viii) Community resources. (13) The Commission subsequently challenged several aspects of the Court of Auditor's report to the ECOFIN Council, in particular since the Court did not consult the Commission in drafting its report, and because the conclusions concerning the management of the Structural Funds were unfair. Bulletin Quotidien Europe, Agence Europe, 12 June 1992). (14) Directives, the predominant instrument used to introduce EC law into national law, require member states to adapt national provisions within a given time-limit so that the requirements of a directive are met. (15) Remarks made by an official of the Foreign and Commonwealth Office, at a recent conference: Problems and Opportunities for the British Presidency', London, 20-21 May 1992. (16) Bulletin Quotidien Europe, Agence Europe, 17 July 1992, pp. 3. (17) Employment Gazette, HMSO, June 1992, pp. 260. (18) Informal Social Affairs Council, 12th-13th October 1992. Full Social Affairs Council, 1st-2nd December 1992. (19) Comments made by Tristran Garel-Jones, Foreign Office Minister, in his Presidency address to the European Parliament on 9th July 1992.
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Author:Matthews, Duncan; Mayes, David G.
Publication:National Institute Economic Review
Date:Aug 1, 1992
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