Theory of intergovernmentalism best explains not only the creation of the EU (as the EEC), but also the realization of EMU. Discuss.
The concept of intergovernmentalism, gives the most suitable explanation about the formation of the European Union and the realization of the European Monetary Union based in the reality that it were the European Nation States the ones that move Europe towards an integration that was first economic, and that was then moved towards a concrete union based in political, social and economic interdependency that can be beneficial to all member states. Based on this reality, the theories of multilevel-governance, neo-functionalism, and institutionalism do not appropriately suit the formation of the European Union, as well as the realization of the European Monetary Union.
The European Union has its bases back in 1951, when the founding members first pooled their coal and steel industries, and established the European Coal and Steel Community (ECSC). Being this the first step towards a better economic Europe, in 1957, the first six member states, Belgium, France, Germany, Italy, Luxemburg and the Netherlands, signed the Treaties of Rome, establishing the European Economic Community (EEC).
Continuing with the integration, many other nation states decided to join the EEC mainly for economic reasons giving birth to the final European Union in 1992, with the Maastricht Treaty, which strengthened the integration, helping to later form a single market, in which goods, services, capital and people would flow as one nation state. Having formed a concrete union, and market, the last goal was now to achieve a single European Monetary Union (EMU), talked back in 1988, that can move the economic, political, and social markets as a whole. After going through different stages, the European Monetary Union was finally achieved in 1999, with the third stage in which the Euro came into operation (Nugent 536-545). The history of how the European Union started is one main example that solely explains and proves intergovernmentalism as a valid theory when talking about the formation of the union.
The fact that it was the six member states, not an organization, nor an entity or a company, the ones that started to move Western Europe towards integration demonstrates the central role and dominance that the member states have in the union. It was in the interest of this first six nation states that the formation took place, and that later involved other nation states that saw beneficial the idea of having a single market, a single currency, and a single economy as the solutions to the economic, political and social problems that some of the later members, like Spain and Portugal, were facing internally. Being the "International economic uncertainties and recession" another reason that "encouraged intergovernmentalism" (Nugent 503). The fact that other Western European nations, like Denmark and the UK, who first joined the union when it was being established, makes intergovernmentalism even more valid when referring to the European Union formation (Nugent 503). Moreover, after more than 10 member states joined the union, the next step that the nations were facing was that of constructing a well organized, not only economically, but now political union. To make this possible, a series of treaties were developed by the member nation states.
Treaties like the Amsterdam and Maastricht treaties that during the evolution of the foreign and defense policies of the European Union, the main concern was also to build a union not only seen as an "Economic giant on the one hand and a political pygmy on the other" (Nugent 447), but to have a union with considerable international political influence as well. The Union's voice "Did not count for a great deal in respect of political and, more particularly, defense and security matters" (Nugent 447). With these bases, intergovernmentalism plays another part when talking about a more integrated union and a more solidify political entity, in the hands of nation member states. Here, "The Maastricht and the Amsterdam Treaties have provided for significant advances in foreign and security policy cooperation, albeit on a basis that maintains their essentially intergovernmental nature and non-EC status" (Nugent 449). Another example that proves intergovernmentalism as the best theory to explain the creation of the union is the rotating presidency of the European Council and the Council of Ministers.
"Every six months, on the first of January and the first of July, a different country assumes the presidency of both bodies" (Dinan 238). Once again, the importance of the nation states within the union is clearly stated. It was obvious that after seeing the economic advances that the union was achieving with the integration of other member states, like Spain for instance, who was mainly accepted into the union because of its agricultural benefits, since its "ascension would increase the EC's agricultural area by 30 percent and its farm workforce by 25 percent" (Dinan 106), more attention was going to be given to the political aspects of the European Union. Nonetheless, the economic issue was still in matter within the member states discussions, that they saw necessary to give birth not only to a single market, but also to a European Monetary Union (EMU) as well. It was more than necessary for many of the member states to have a single currency, and even one of the main factors for it was "Notably an increasing appreciation by governments of the benefits for the SEM of economic and financial integration...
." (Nugent 331). The nation states' governments found clearly beneficial to have a single currency, and it was up to them to decide. "Ministers and senior officials did regularly convene to consult and to exchange ideas on macroeconomic policy, and at their meetings they periodically considered Commission submissions for the adoption of common guidelines and for short-term and medium-term strategies. But ultimately it was up to the states themselves as to what they did" (Nugent 329). Even though, there was much opposition for the formation of the single currency, eleven of the fifteen member states finally decided to form the European Monetary Union, and adopted the single currency, Euro, in January 1999. The formation of the treaties and the formulation of decisions, have been taken and have been in the hands of the nation states' governments to decide.
Then, the theory of intergovernmentalism, when explaining the formation of the European Union, would be simplified, in three steps. First, the union was formed by nation states, and not by external organizations, or institutions. Second, the economic bases moved the union towards political bases that gave more room to a more state-political intervention, making states' opinion and influence even stronger. Finally, the single market, and the formation of the European Monetary Union, made states political, and economic decisions to go hand in hand with each states interests.