Introduction

The Treaty establishing the European Economic Community (TEC) was signed in Rome by the six founding countries (Belgium, France, Germany, Italy, Luxembourg, and the Netherlands) on 25 March 1957.

The integration process was initiated with the application of the incremen­tal tactic envisaged by Jean Monnet, pointing to the development of a European interest above the national interests. The strategy was to pursue common policies in the areas where cooperation could be exploited to mutual advan­tage. The self-enhancing character of the succession of agreements consisted in each common policy creating spillovers, from which a new common project entailing positive net benefits for all members could be devised.

This strategy is behind the functionalist view of the EU integration process whereby the EU is a continuous process of accumulation of cooperative agreements, based on two commitments: (i) the aim of further integration, stated in the preamble of the treaties of Rome (TEC) and Maastricht (TEU); and (ii) the acceptance of the acquis communautaire (the set of EU treaties, laws, rules and practices), whereby the accession countries are required to accept the EU obligations as such. However, the accession of new members is usually preceded by many years of negotiation, followed by a transitory period. The six founding countries had a 12-year transitory period, divided into three phases and ending in 1969, while Spain and Portugal were given a six-year period. The UK, having changed government just after acceding, then succeeded in renegotiating its terms of accession. Negotiations for the 2004 enlargement were begun in 1998 and the transitory period is planned to end in 2006. On rare occasions some exceptions, exemptions or delayed applications to the acquis communautaire have also been sanctioned.

In the absence of a supranational state or federal government, the EU has developed a system of laws, rules and decisions made by the four main institutions: the Commission, the Council, the Parliament and the Court of Justice.

The European Commission, composed of executive commissioners and headed by their president, is appointed by the national governments and approved by the Parliament. It has the important task of proposing common policies, ensuring the correct implementation of the treaties, and representing the EU in international trade negotiations (formerly within the General Agree­ment and Tariffs and Trade: GATT; and now in the World Trade Organization: WTO). In the EU Council, each national government is represented by the relevant minister (foreign affairs, finance, agriculture and so on). The Coun­cil’s decision-making activity is endorsed by the European Council, the quarterly summit of the heads of state and governments of the member states, and includes the participation of both presidents of the Commission and the European Parliament.

The EU institutional architecture is not characterized by a complete sep­aration of powers among the four main institutional bodies. On the contrary, they exercise mutual monitoring through a complex system of checks and balances, finally reaching consensual decisions. According to principal-agent theory, this interdependence creates a conflict of interests - between the Commission and the Council (for example, the conflict over the possible revision of the Stability and Growth Pact: SGP) or between the Council and the Parliament (for example, the EU budget) - from which the appropriate incentives for each institution and the officials’ accountability should follow. The Commission has the agenda-setting power that enables it to control the integration process by putting forward proposals to be approved by the Coun­cil and the Parliament. Most of the EU legislation proposed by the Commission is approved under the co-decision procedure, whereby the Council and the Parliament can amend each other’s changes to the proposal. If there is dis­agreement, the matter is passed to the Conciliation Committee, which makes the final decision regarding adoption or rejection. The power of the Council as a whole has been endorsed by the European Councils, which have acted as an important, though informal, decision-making forum and have strength­ened the power in the hands of national governments. The Court of Justice is acknowledged to have acted as a main engine of integration by passing judgments that in many cases have fostered the integration mechanism. The doctrine of direct effect and supremacy of European over national law, which is needed to guarantee the coherence of the system, has been applied since its inception, and national courts accept its authority.