| The basis of the European Union |
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The foundation of the EU is formed by the Treaties, which lay down the objectives of the Union, its institutional structure, the powers of the organs, procedures of legislation and decision-making as well as the Community's financial system. The Treaties confer on the EU powers to generate legislation directly applicable in the Member States. The Treaty of Paris (1951) established the European Coal and Steel Community (ECSC). The Treaties of Rome (1957) laid foundation for the European Economic Community (EEC) and the European Atomic Energy Community (Euratom). The Single European Act (1986), the Maastricht Treaty on EU (1992) and the Treaty of Amsterdam (1997) amended the founding Treaties. The Treaties of the Union are revised by the Intergovernmental Conferences of the Member States. The objectives of the Union are set out in the Treaty on EU (1992). Firstly, the Union promotes economic and social progress which is balanced and sustainable through the creation of an area without internal frontiers, through the strengthening of economic and social cohesion and through the establishment of the Economic and Monetary Union. Secondly, it asserts EU's identity on the international scene through the implementation of a common foreign and security policy. Thirdly, it seeks to protect the rights and interests of the citizens of the Member States by introducing a citizenship of the Union. And fourthly, the Member States develop close cooperation in matters relating to justice and home affairs. About Union's policies. The Single European Act (SEA, 1986) was the first major review on the founding Treaties. It improved procedures and broadened the scope of the Treaties, introducing closer legislative cooperation between the Parliament and the Council. The Member States committed themselves to creating, by the end of 1992, a unified market with free movement of persons, capital, goods and services. The Treaty linked the objective of the internal market to the achievement of economic and social cohesion. Cooperation in research and development policy was also promoted. The Single European Act came into effect on 1 July 1987. The Treaty on European Union (the Treaty of Maastricht, 1992) is seen as the most comprehensive reform to the Treaties of Rome. It gave European integration a new dimension by transforming the essentially economic Community into a European Union. The Treaty produced a timetable for further progress on the road to Economic and Monetary Union. Community powers were extended to new policy areas such as education, health, consumer protection, industry and development cooperation. Citizenship of the EU was established. The Member States committed themselves to developing a common foreign and security policy. The Western European Union was assigned a new role. Cooperation in justice and home affairs was strengthened. The Parliament was allocated new powers, including co-decision-making in legislation and the appointment of a European Ombudsman. The Maastricht Treaty entered into force on 1 November 1993. The Treaty of Amsterdam (1997) strengthens the policies and the powers of the Union, particularly in judicial cooperation, free movement of persons, foreign affairs, employment, social affairs and public health. The objective of the Treaty is to cement employment and citizens’ rights as the central pillars of the Union, to remove the remaining obstacles to freedom of movement while making Europe a secure and safe area, to lift the profile of the EU within the international community and to make the Union's institutions more efficient for forthcoming enlargement. It also intends to make the EU more democratic and transparent. The Amsterdam Treaty came into force on 1 May 1999. The pillar structure The EU is built under a single institutional roof standing on three pillars, established by the Treaty on EU (1992). The first pillar is the Community pillar, including the three European Communities (EC, Euratom, ECSC). The second pillar is cooperation between the Member States in the common foreign and security policy (CFSP). The third pillar is cooperation in the fields of justice and home affairs (JHA). The Community pillar governs the operations of the Commission, the Parliament, the Council and the Court of Justice. It covers a wide range of policies, such as internal market, agriculture, environment, research and development and the Economic and Monetary Union. The two other pillars concern key issues of national sovereignty and require intergovernmental cooperation. Communitisation concept means transferring a matter which is usually dealt with using the intergovernmental method to the Community method. The Community method is based on the idea that the general interest of Union citizens can best be pursued when the Community acts as one, with the combined weight of all Member States with due regard for the subsidiarity principle. Subsidiarity principle means that the Community may take action in areas which do not fall within its exclusive competence only if the objectives of the proposed action cannot be sufficiently achieved by the Member States and can therefore be better achieved by the Community. The aim of the subsidiarity principle is to bring decision-making as close as possible to the citizens of the Union. Closer cooperation and flexibility concepts refer to the possibility for a number of Member States to cooperate more closely in specific areas within the framework of the Union rather than outside it. For instance, Member States are allowed to move at different speeds towards full Economic and Monetary Union. Decision-making organs of the EU are the Council of Ministers, the Commission and the Parliament. The most important of these is the Council, which enacts Union legislation. The Commission has the right of initiative and therefore considerable power to shape Union policies. The Parliament takes an active part in the legislative process and so ensures the democratic character of decision-making. While the Council acts as a legislator, proposals are submitted by the Commission. The Council examines a proposal and may amend it before adoption. The Parliament participates in decision-making in various ways. For a wide range of issues legislation is adopted jointly by the Parliament and the Council under a co-decision procedure. These two organs also have joint control over the Community budget. In a number of areas the two advisory committees are consulted. In the field of intergovernmental cooperation (second and third pillar) the primary role is taken by the Council and the Member States also have the power of initiative. Voting and decisions The decisions are adopted either unanimously, by a simple majority vote or by a qualified majority vote. Within the scope of the first pillar a large proportion of legislative decisions are taken by a qualified majority on a proposal by the Commission. If the Council takes a decision by a majority vote, the votes are weighted. The number of votes per country is determined according to the size of the population. However, in many areas decisions have to be taken by a general vote, in which case every Member State has the power of veto. Council acts may take the form of regulations, directives, decisions, recommendations or opinions. The Council may also adopt conclusions, declarations or resolutions. In the fields of common foreign and security policy and justice and home affairs unanimity is the guiding rule. The main instruments of action are common positions, joint actions, common strategy and conventions. The common budget policy of the EU forms the basis for its political activities. Annual forecasts are made of the Union's revenue and expenditure, and it is all entered in the Community budget. The Commission is responsible for submitting a preliminary draft budget to the Council of Ministers, which shares budgetary authority with the Parliament. The nature of the expenditure determines the breakdown of power between these two institutions. However, it is the Parliament that finally adopts or rejects the budget. Since 1993, the budget has been the subject of an inter-institutional agreement between the Parliament, the Council and the Commission. In 1999, the budget totalled about euro 85 billion in commitment appropriations. Revenue for funding the Community budget comes from various sources. There have been several stages in the development of the Union’s financial system. Originally, the Community budget depended on the Member States' financial contributions. This system was gradually changed with the introduction of own resources. In 1970 the Community was given financial autonomy, and since 1978 the budget has been financed by own resources. They consist of four sources of revenue: customs duties on imports of goods, levies on agricultural imports, a proportion of VAT levied (40%) and contributions by Member States proportional to their GNPs (44%). Expenditure The budget covers the administrative expenditure (5%) of the institutions and expenditure on operations by the Community and Euratom. Certain categories of expenditure are dealt with separately. A distinction is made between commitment appropriations and payment appropriations. Commitment appropriations provide the financial framework in which commitments for multiannual programmes can be made during one financial year. Payment appropriations cover the actual expenditure arising from the commitments in the current financial year or commitments carried over from previous financial years. Main policy areas financed by the general budget are agricultural policy (47%) and structural policy (35%). Financial perspectives 2000–06 form the framework for Community expenditure over a period of the next seven years. The new financial perspectives are drawn up on the assumption that the accession of new Member States will take place from 2002. The perspectives have been based on constant 1999 prices with automatic annual adjustments for inflation as in the past. The ceiling for own resources will be maintained at the current level of 1.27% of the Community GNP. These resources must allow the pursuit of the objectives set for Community policy while respecting budgetary discipline. Care has been taken to ensure that the Union's public expenditure does not rise more quickly than those of the Member States. The reform of the common agricultural policy will also assist in reaching the overall objective of stabilising Union expenditure. Updated 15.10.1999 About this site |