Luxembourg compromise

The Luxembourg Compromise was an agreement reached in January 1966 which resolved differences, created by the empty chair crisis, within the (then) European Economic Community.

Charles de Gaulle as an Intergovernmentalist

In 1960 Charles de Gaulle believed that a council of the heads of government should be created with a secretariat in Paris. He wanted to create a European institution that would give France greater power in Europe. He also sought to create a political union on top of the economic union already in existence, the European Economic Community. This was his second attempt at creating more political coordination in Europe, the first being a Franco-Italian proposal that would have required that foreign ministers met outside the EEC structures regularly. The Dutch were quick to block that proposal, preferring to keep any political union talks within the Western European Union. The German Chancellor Konrad Adenauer met with de Gaulle in July 1960 where de Gaulle presented a 9 point plan entitled “A Note on the Subject of the Organization of Europe.” In this plan, de Gaulle proposed a diminished supranational influence and an end to the American led integration. It soon became apparent to the other five members of the EEC that de Gaulle was planning on creating a political union that would cut out not only American influence but Great Britain as well. Moreover, it would reconfigure the existing EEC institutions. The plan would call for regular summits, a parliament consisting of representatives from each of the member states' parliaments, and a national referendum. The other five were interested in a political union, but they expressed concern about the new configuration. Chancellor Adenauer reluctantly agreed to the plan, as long as provisions could be included which would keep NATO in Europe and preserve the existing EEC organs. The Dutch Foreign Minister Joseph Luns was resistant to this new reorganization, fearing that the exclusion of Great Britain and NATO would leave Europe vulnerable. Moreover, de Gaulle’s plans would have meant a far more intergovernmental Europe, in which the majority of the power would rest with member states and not in supranational organizations. This would have meant a step backwards for European integration. Luns saw de Gaulle as an aspiring hegemon seeking to expand French influence throughout the continent. De Gaulle was clearly trying to increase French power: “Europe is the means for France to recover what it ceased to be after Waterloo: first in the world”. Furthermore, the Dutch were concerned that leaving Great Britain out of Europe was irresponsible, but de Gaulle was vehemently opposed to Great Britain’s accession to the community. In his eyes, it would create a backdoor for NATO and the United States to involve themselves in Europe . Moreover, Great Britain would interfere with de Gaulle’s plans for La Grande Nation: France as a superpower standing between the United States and the U.S.S.R. In October 1960, de Gaulle sent his prime minister to West Germany and was successful in getting Adenauer to agree to a heads of state meeting to take place in February 1961. Adenauer was mistrustful of de Gaulle, rightfully believing that de Gaulle was trying to create a ‘leading role for France in Europe’ and combined with the Dutch opinion, led to the meeting being a failure for de Gaulle. It was agreed, however, that a committee should be formed to discuss possible political union”. In autumn 1961, a committee was formed to address plans for a political union in Europe. The Fouchet committee, named after the French politician Christian Fouchet, drafted a plan that would include defense among other political recourses. Any mention of NATO was conspicuously left out. While West Germany and Italy generally accepted the plan, provided that the NATO issue could be worked out, it was again the Dutch who opposed the plan. They also wanted to link any discussion on a political union with British accession to the EEC. France of course was opposed ”. Sensing that he had support of at least 3 member states, West Germany, Italy, and France, de Gaulle shifted tactics and he reissued the Fouchet Plan in January 1962. This plan again omitted NATO and sent a clear message that de Gaulle wanted to separate Europe from NATO. This move irritated the other members, including Italy and West Germany and strengthened the Dutch position”. De Gaulle backtracked and in February 1962 went to West Germany to appeal to Adenauer. He reintroduced the omitted NATO passage in order to placate the Chancellor, but Adenauer did not want a Franco-German domination. De Gaulle was less timid, “Once (France and Germany) are in agreement, their decision should be imposed”. Adenauer again changed his position, but the Dutch and Belgians would not tolerate de Gaulle’s plan. The issue was dropped at the April summit.

The Empty Chair Crisis

In July 1965, intergovernmentalist Charles De Gaulle boycotted European institutions due to issues he had regarding new political proposals by the European Commission. This event, known as The Empty Chair Crisis, impacted the European Community. Several issues regarding European political integration led to The Empty Chair Crisis. De Gaulle believed that national governments should move towards integration and did not agree with the Commission’s attempt to create a shift towards supranationalism, extending powers beyond national borders. After the failure of the Fouchet Plan and De Gaulle's veto of Great Britain’s application for EC membership, the Commission attempted to move towards integration by proposing an idea that would combine the Common Agricultural Policy, the European Parliament, and Commission. De Gaulle supported the creation of the CAP and favored its enactment. However, he disagreed with the Parliament’s new role, the Commission’s strength, the shift towards supranationalism, and the budget proposals for financing the CAP. De Gaulle made it a condition that majority voting with a right to veto must exist if France was to participate in the European Community. When de Gaulle was not granted a more intergovernmental Commission, or voting and veto rights, the French representative left the Council of Ministers. This event was not resolved until the Luxembourg Compromise in January 1966.

The Views of the Member States

BeNeLux Reaction

At the outset of the Empty Chair crisis, the Benelux states sought to minimize the total damage that the crisis could potentially have on the European Economic Community. As a result, the Benelux Political Consultation Committee (COCOPO) immediately worked to establish a common stance on the steps the remaining states' should take next. This proved difficult, a schism emerging between the three states in reaction to the absence of the French delegation. Belgium and Luxembourg both saw the necessity for the Benelux to act as a mediator between the French and the rest of the Community, wanting to encourage the prompt return of the French delegation while maintaining the possibility for the creation of the common market in the future. The creation of the common market was of special importance to Belgium, as it was vital to its own industry and moving forward without the French would hurt the potential of such a policy. Another concern of the Belgian delegation was to ensure that the seat of the institutions to remain in Brussels. The Belgian desire to remain relatively neutral within the feud was also impacted by the strong portion of French speakers within the Belgian population, who generally viewed the French demands sympathetically. They argued to continue the discussion while keeping France notified of the developments, but only making technical decisions and absolutely no explicit commitments. While the Belgians wished to continue operations within the Commission and the Council, the Luxembourg delegation stressed that any meetings of the Commission or Council must be strictly unofficial, and any action that could be viewed by France as confrontational must be avoided. As a result, no decisions were made in the initial meetings following the start of the crisis. Luxembourg argued that the central issues of the crisis came from a lack of a decided common goal for the community, something that needed to be determined for any further treaties to be agreed upon and ratified. In contrast to the other Benelux states moving towards roles as peacekeepers and mediators, the Netherlands were opposed to the French decision to leave Brussels from the beginning. They quickly aligned themselves with the positions of West Germany and Italy, while recognizing the benefits of continued communication with France as the community moved forward. Nevertheless, they were largely in favor of proceeding with official negotiations with only five states and if possible, making decisions for France to come to terms with if they rejoined the community in the future. These different stances within the Benelux complicated the cohesiveness of any decision adopted by COCOPO. Without the backing of the Netherlands, the proposal to postpone negotiations submitted by Belgium and Luxembourg was immediately rejected. The committee did not adopt any common decision until the proposal of the Spaak Plan, created by Belgian Foreign Minister Paul-Henri Spaak. The Spaak Plan suggested a meeting of the Council without the participation of the Commission, where a common stance on the critical issues surrounding the crisis would be decided and presented to France for evaluation, hopefully leading towards negotiation and the return of the French Delegation. This became the stance of COCOPO as a whole, to wait out the crisis, while showing some initiative to resolve it and bring France back to the discussion.

Italian and German Reaction

Both Italy and West Germany were extremely dissatisfied with the French domination in the early years of the EEC. By utilizing their own country’s fragile political situation, they managed to turn the Treaty of Rome into a major French diplomatic victory, and no other country was able to gain as much as the French. This was combined with an enormously biased CAP that left Italy as the highest net contributor (while still being the poorest country) and left West Germany with “unacceptably high” 2.8 billion DM annual contribution. The most important factor in the willingness of the Italian and West German governments to stand up to de Gaulle and the French was the decreased fear that France would actually leave the EEC. In the face of how much the French were able to gain from the EEC, it became increasingly difficult for French diplomats to rationalize that French was in any way interested in leaving the EEC. According to Ludwig Erhard, the West German negotiator, this was all a bluff, and the French would never withdraw from the EEC since they were the main beneficiaries. After the Luxembourg Compromise, the West German and Italian governments found a new balance in the majority voting procedure, something that allowed them both to override the French government when they felt the French were being too aggressive. This would benefit Italy exceptionally well, namely for the new majority vote on the regulations of fats and oils, and the fixing of common price for beef. The German gains from the Compromise were more political, mainly in weakening the intergovernmental forces that allowed France to be so dominant.

The Compromise

Veto Power

Within the Luxembourg Compromise, a de facto veto power was given to every state on topics that were deemed to be ‘very important national interest(s). It was agreed upon that should a topic of concern arise, Members of the Council would seek to create a solution that all members could unanimously agree upon, regardless of whether or not the treaty required only a majority. However, the question of what should be done if no agreement was reached was interpreted differently by various members of the Community. While the flaws of such a system seemed evident, the Compromise assumed that if an agreement was not reached, it would “not prevent the Community’s work being resumed in accordance with the normal procedure”. Contrary to this assumption, the Luxembourg Compromise did prevent the Community’s decision-making for almost 20 years, until a veto by Britain was overridden in 1982 when, ironically, its interests were challenged by the French.

Common Agricultural Policy

The CAP or Common Agricultural Policy was born of the Treaty of Rome. CAP was partially reformed in 1966 as a result of the Empty Chair Crisis and the Luxembourg Compromise. Policies of CAP are voted on using Qualified-Majority-Voting, one of the stipulations of the Luxembourg Compromise. The CAP set up an international agricultural organization that set prices for market goods like Fruit, Vegetables, Sugar and Cereal. Some of the CAP’s other goals are to: increase agricultural productivity, ensure a standard of living for the agricultural community, stabilize markets, to readily provide available supplies at reasonable prices to consumers.

A Weaker Commission

The Compromise had a restraining impact on the Commission. In stressing the vitality of a balance of powers between member state national desires and supranational ideals within the Community, it tethered the Commission to the Council. As a result, the process of integration slowed, and the minimal amount of legislation proposed by the Council limited the Commission’s power to implement policy. Overall, the administrative and initiative authorities that the Commission previously enjoyed on its own now needed the Council’s approval. In a joint meeting of the European Parliament, the Council and the Executives on January 28 and 29, 1996, it was agreed that the Commission must seek the Council’s approval on several policy measures. These include:

1. The Commission must contact the permanent representatives of the Member States before adopting any policy proposals.
2. The Commission must refrain from making proposals known to the public before the Council and the Member States receive formal notice and have possession of the texts.
3. The Commission must meet with the President of the Council to review the credentials of Heads of Missions of non-member states accredited to the Community.
4. The Commission must inform the Council and vice versa of any questions posed by non-member states regarding either institution.
5. The Commission must consult with the Council before pursuing any links with international organizations.
6. The Commission must cooperate with the Council in establishing an information policy.
7. The Commission must work with the Council to decide on financial commitments and expenditures made by the Community.

The compromise’s allowance for a veto also weakened the Commission’s ability to push for legislation. In knowing that any member state could terminate the effort with a no vote, the Commission was discouraged from proposing controversial and deeper integration policies.

Qualified Majority Voting

A compromise between all the member states was reached on the issue of Qualified Majority Voting (QMV) in the Luxembourg Compromise. The Commission planned to extend the Community’s power by expanding the number of issues subject to QMV. Charles de Gaulle was against the expansion of the Community’s powers. The agreement reached was, that whenever a decision was subject to QMV, the Council would postpone the decision if a Member State claimed their national interests were being threatened. This compromise meant that no decision could be taken until a unanimously accepted agreement was reached. The QMV gave the smaller states greater voting weight since they were given a higher proportion to their population.

How this affected Integration

The Luxembourg Compromise is viewed as a turning of the tide in the history of European integration. It safeguarded the intergovernmental nature of the EC, therefore preserving state sovereignty. It also prevented the EC from further consolidating power and therefore becoming more supranational, or taking power out of the hands of the states. This meant the EC was moving in the opposite direction of the original assumption that it “would eventually transform itself into a fully-fledged state.” Instead, a norm developed in the Council that all decisions should be taken unanimously. Although the Luxembourg Compromise was only formally invoked around ten times between 1966 and 1981, its ‘shadow’ hung over the Council and made decision-making much more difficult. Today, although majority voting has come to be used more frequently and the Luxembourg Compromise is all but defunct, the member states still prefer to take decisions by unanimity, because a decision reached by consensus means national authorities are more likely to implement EU directives into national law with enthusiasm, vigor, and in a timely manner.

In practice

The Luxembourg compromise was, in fact, not a compromise: it was an agreement to disagree. Whereas all Member States accepted that, in a situation where a Member State's important national interests were at stake, an attempt should be made to find a solution acceptable to all, they did not agree a to what should happen if no such solution was found within a reasonable period of time. France considered that the discussions should continue indefinitely. All other Member States took the view that a vote should be taken in accordance with the treaties.

In practice, in the years following the Luxembourg compromise, very little qualified majority voting took place in Council. This was partly due to a reluctance to force a new crisis with France, but the tendency was reinforced in 1973 by the accession of new Member States who essentially shared the French view on these matters.

Together, France, the UK and Denmark constituted a large enough minority to prevent decisions even by a qualified majority. In other words, if a matter were put to the vote against the express national interests of any Member State, it would not get through as these countries would not vote for a proposal in such circumstances. It therefore became habitual to negotiate on all texts, virtually line by line, until all member States agreed, before taking a decision in Council.

By the 1980s, this working method was coming under increasing strain. A number of negative consequences were becoming increasingly apparent: - such a decision-making procedure was grossly inefficient (it took 17 years, for instance, to agree on a directive on the mutual recognition of the qualifications for architects); - virtually any Community policy or action could only be the lowest common denominator acceptable to all Member States; -the Commission's right of initiative, and the role of the European Parliament, were reduced - such detailed and time-consuming negotiations could not be carried out by Ministers alone, but by national civil servants, which led to a bureaucratization of the whole Community system.

Above all, it became apparent that, while unanimity when agreeing on new Community policies was one thing, unanimity for the management or revision of existing Community policies was another. In these cases, the Community as a whole had a vital interest in ensuring that it could take rapid decisions, but it was clear that national ministers were quite capable of deeming almost anything to be an 'important national interest' when their state had an advantage in the status quo. CAP reforms for instance, were all too easy to block by any Member State gaining from the system, even when this was at huge expense to the Community as a whole. This applied in varying degrees to all Community policies and to all Member States. The right of veto proved to be the dictatorship of the minority, used for selfish national interests.

The first major crack in the practice of unanimity came in 1982 when the UK attempted to block the final adoption of the annual package of farm prices (details of which it had already agreed to) in order to extract concessions in separate negotiations on the Community's budget. This was perceived by other Member States to be almost a form of blackmail. The Community had to decide urgently on the agricultural prices for that year, and Britain was not objecting to the contents of that decision but merely using its supposed right of veto to extract concessions on another matter. This attitude provoked a sufficient majority of Member States - including France - to take part in a vote openly putting Britain in a minority, and adopting the package. This was possible because the "bottom line", constitutionally, was the treaty provision for majority voting in this area, rather than the political understanding (and a disputed one at that) of the Luxembourg Compromise.

Shift in attitude

A shift in the attitude of some Member States was confirmed in 1983, on the occasion of the adoption of the Solemn Declaration on European Union by the European Council in Stuttgart. The Declaration itself referred to a need to improve the Community's capacity to act by applying the decision-making procedures laid down in the treaties. In declarations appended to the minutes, however, each Member State laid down its interpretation of when a vote should take place. Only Britain and Denmark supported the original French position of 1965. France and Ireland now spelt out that the national interest in question must relate directly to the subject under discussion and they, like Greece, took the view that the vote should only be postponed if a Member State invokes an '"essential" national interest' "in writing". Belgium, Germany, Luxembourg, Italy and the Netherlands took the view that a vote should be held whenever the treaties provide for it.

In 1984, the European Parliament put forward a proposal for a new treaty on European Union, which envisaged the introduction, over a ten-year period, of majority voting without the right of veto for all existing Community policies (except foreign-policy cooperation), but retained unanimity for the introduction of new policies. The response of the Member States, in the form of the Single European Act, was to extend by ten the number of articles in the treaties which required majority voting. This extension was linked for the most part to policy objectives (such as the legislative harmonisations necessary for completing the internal market by 1992), and the follow-up of unanimously-agreed framework decisions (e.g. individual research programmes, following the unanimous adoption of the multi-annual framework for research; and Regional Fund decisions, following the unanimous adoption of the overall regulation for the structural funds).

A change in the treaties could not in itself affect the Luxembourg compromise, as a political agreement with no legal basis, let alone a treaty one. Indeed, UK Prime Minister Margaret Thatcher declared to the House of Commons that it remained. However, such a change to the treaties, duly ratified by all national parliaments, changed the constitutional framework within which the decisions concerned would be taken, and signified at least an intention to take majority votes more frequently. There would, after all, be little point in modifying the treaties if this were not the case.

The Council followed up this treaty change with an amendment to its internal Rules of Procedure. After a year of negotiations, it agreed in 1987 to change its rules to oblige the President-in Office to move to a vote upon the request of the Commission or the representative of any Member State, provided that the request is supported by a simple majority of Member States. The context was also changed by accession of Spain and Portugal to the European Community. It was no longer clear that states seeking to invoke the Luxembourg compromise would have sufficient support in Council to constitute a blocking minority.

Following these developments there was a reluctance by Member States to risk invoking the compromise and finding it was not accepted. There were even cases in which Member States in the minority, rather than invoke the Luxembourg compromise during a vote, have challenged it in the Court of Justice on grounds of an incorrect legal basis - arguing that an article requiring unanimity should have been used. Gradually, votes were taken on increasingly controversial subjects such as a ban on hormones in meat (leading to a 'trade war' with the United States), permitted radioactivity levels in foodstuffs, rules for trans-frontier television broadcasts, several fishing controversies, foreign aid, and some of the crucial reforms of the CAP. By the time of the negotiation of the Treaty of Maastricht in 1991, it was widely recognised that votes would be taken wherever the treaty provided for it.

Literature

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