The tortuous ratification process of the Maastricht Treaty, the turmoil in European currency markets in the autumn of 1992, the lack of political leadership ever since the Maastricht negotiation, and the recession would seem to have created a sense of disillusion about the much heralded post-1992 period for the European Community (EC). Is the Community drifting back to Europessimism? Was the impact of EC-1992 a fata morgana? What, if anything, was accomplished by EC-1992? This article shows that EC-1992 has enormous significance for the EC. There are four reasons. The first and most fundamental one is found in the induced transformation of the process of European integration in many ways. Second, EC-1992 has fulfilled a locomotive function, pulling the Community out of stagnation, bickering, and deadlock to great economic policy and political and market dynamism. Third, EC-1992 has bolstered the Community's position in the world economy and diplomacy. Fourth, the successful pursuit of EC-1992 has enabled the EC to assume the leadership in the post-Communist pan-European turmoil; although the EC role is not satisfactory, without EC-1992 and its impact, a disastrous leadership gap would have shown up.
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References
1.
1. EC Commission to the European Council, Completing the Internal Market, 14 June 1985, COM(85) 310.
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2. For this comparison, see Jacques Pelkmans and Marc Vanheukelen, “The Internal Markets of North America: Fragmentation and Integration in the US and Canada,”Research on the “Cost of Non-Europe”: Basic Findings (Luxembourg: Office of the Official Publications of the European Communities, 1988), vol. 16.
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3. The first rewrite of the EEC Treaty, negotiated in late 1985 and in force since July 1987. The text of the Single European Act is reprinted in EC Bulletin, supp. 2 (1986). The white paper and the Single Act should be seen as twins in the EC-1992 program; both were indispensable and each was the other's complement.
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4. Those areas are trade facilitation (reducing the costs of internal frontiers), opening public procurement, indirect tax harmonization, and the removal of technical barriers.
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5. Note that a functional application of subsidiarity leads to an advanced stage in establishing an internal market (for example, the four freedoms). In turn, this will enable a much wider application of subsidiarity. Thus the emergence of the principle of subsidiarity in the EC can be understood as a response to the initial success of EC-1992. Subsidiarity can be applied internationally as well but only when mobilities are not hindered too much by frontiers.
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6. See, for example, Jacques Pelkmans, “The Assignment of Public Functions in Economic Integration,”Journal of Common Market Studies, 21(1-2) (Sept-Dec. 1982).
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7. See EC Bulletin, no. 4 (1971).
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8. The term “economic and social cohesion” refers especially to the efforts of preventing a North-South problem when completing the internal market. Its inclusion in the Single Act was critical for the act to be signed by all and agreed to by the members-to-be, Spain and Portugal. The famous “cohesion” decision of the Council in February 1988—doubling the Structural Funds for this purpose—was critical to the success of the EC-1992 program.
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The Canadian literature on economic union is very interesting; see, for example Economic Council of Canada, A Joint Venture: The Economics of Constitutional Options (Ottawa: Economic Council of Canada, 1991).
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10. Elaboration and an explanation of the driving forces behind these elements are beyond the scope of the present article. An elaboration will be provided in Jacques Pelkmans and Jeanne-Mey Sun, How “1992” Changed European Integration (London: Brasseys, forthcoming).
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11. One can therefore consider it as a later addition to the white paper proposals, although it never was included in the score charts, or, alternatively, as a widening of the white paper concept of a single market for services in general.
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12. The Single Act merely provides a legal basis for occupational health and safety regulation at the EC level; it also encourages a social dialogue between what in Europe are called the social partners, without attributing any formal powers.
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See also the articles and EC declarations in Finn Laursen, ed., Europe 1992: World Partner? (Maastricht: European Institute of Public Administration, 1991).
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14. Without pretending to do full justice to this misleading but influential debate, I will note here that an important reason for the asserted retrogression was Article 100A, introduced by the Single Act, containing a possibility for derogations from harmonization decisions; the debate was wrong-footed because too few authors had understood the great significance of Article 8A of the Single Act, on abolishing internal frontiers.
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15. On a common Council position, the European Parliament gives a second reading before formally adopting the legislation; complications might arise if the Parliament rejected the common position.
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A nontechnical exposition of the problems and some early suggestions can be found in Jacques Pelkmans and Peter Sutherland, “Unfinished Business: The Credibility of `1992,' ” in Centre for European Policy Studies, Governing Europe (Brussels: Center for European Policy Studies, 1990), vol. 1.
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17. The terminal equipment market was fully liberalized (also open to third countries, without a reciprocity clause); a European mobile telephony market and standards were initiated; a new telecommunications standard institute was founded embarking on a huge European standardization program; the network holders were separated from their other business units; and open network provision, with the concomitant competition policy, was introduced.
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18. Examples include a draft directive—with numerous exceptions—to limit the work-week to 48 hours (!), adopted in the spring of 1993, and a directive, adopted in 1992, preventing pregnant women from working night shifts. Both led to long debates in the Social Council, although, of course, they have little if any impact on how labor markets in Europe operate.
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19. Namely, if workers from A work in B but remain workers of the contracted firm in A, A's labor law cannot be applied in B, except when the workers' stay is very short. Such a regulatory competition would amount to what has been dubbed social dumping.
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20. The Hannover Summit in 1988 explicitly endorsed high social standards.
21.
Alexander Italianer , “ `1992'—Hype or Hope?”Economic Papers (EC Commission), no. 77 (1990).
