This was written in September 1997. It will be updated soon.

1997 marked the 40th anniversary of the creation of the EU. Pundits were quick to point out that its professed goal of an Òever closer unionÓ seemed as distant in 1997 as it did 40 years ago. Three issues typify the problems the EU faces--the mad cow crisis, the Intergovernmental Conference (IGC) negotiations culminating in the Amsterdam summit in June, and the continuing uncertainties about EMU (European Monetary Union) and the single currency.

Of the three, the mad cow crisis is by far the least important. However, it does illustrate some of the general difficulties the EU faces. In 1996, the British government confirmed that its policies had not stopped the spread of CJD or "mad cow disease." The European commission responded by imposing a ban on export of British beef not just to the other fourteen member countries but to the entire world. As has often been the case in recent years, Britain reacted intransigently. Moreover, even after the UK had taken steps that curb the spread of the disease, Germany and other countries continued to refuse to lift the ban in part out of genuine scientific concern but also in part out of a desire to support their own cattle farmers. The first signs of an easing of the crisis came after the British election when the new Labour government took a more conciliatory attitude toward all things European. It should be noted that the first significant steps came after McDonald's (which accounts for 7% of the British beef market) and Burger King announced they would both start using British beef again.

On June 16-17 1997, the Heads of State of the 15 member countries meeting as the European Council agreed on the Treaty of Amsterdam. The Maastricht Treaty required the creation of an Intergovernmental Conference five years after its ratification to reconsider its provisions and make any necessary modifications or additions to it. The IGC began meeting in March 1996 and as is now common, only reached an agreement at the last possible moment. The treaty mostly makes incremental changes in EU institutions and practices, the most important of which are:

1. extending the Schengen agreement through which border controls within the EU have been eliminated, though Britain and Ireland were allowed to opt out of its provisions.
2. expanding the Òthird pillarÓ by granting the EU more responsibility for legal matters, including the terms for issuing residence permits to immigrants, asylum procedures, and rules governing judicial cooperation in civil matters.
3. acknowledging the primacy of NATO in security matters, but reinforcing the EU's desire to act as a body via the unanimity principle in nonmilitary policy areas.
4. in anticipation of further expansion, makes "codecision" procedures between the Parliament and Council "more or less" the rule. The "cooperation" procedure which gives the Council the upper hand will survive only in a few, admittedly key policy areas., such as monetary union. The use of qualified majority voting was also expanded though not to cover critical issues, such as the entrance of new members or taxation policy.
5. opening the door to a "multispeed" Europe in which some countries might integrate more and faster than others.
6. partially as a result of the election of left-wing governments in France and Britain did, agreement on a resolution committing the EU and its member states to policies that will stimulate economic growth and employment and, over time, coordinate the policies of the individual member states. The treaty also took some limited steps toward erasing the "democratic deficit" most notably by expanding its freedom of information provisions.

By far the most contentious issue facing the EU and its member states currently is the adoption of the Euro scheduled to begin in January 1999. A year ago, it seemed a certainty, though Britain and Denmark seemed likely to exercise their opt-out provisions negotiated at Maastricht and a few other countries might not meet the entrance criteria.

Now, nothing is certain especially regarding one of the criteria countries must meet to qualify for membership in the EMU--an annual budget deficit of no more than 3% of GNP. GermanyÕs economic problems will make it difficult for it to qualify. The new Socialist government in France has announced that it will only meet a relaxed version of the criteria, because it is not prepared to make the budgetary and other sacrifices strict adherence to them would require. As has been the case with many EU developments since Maastricht, EMU also deeply divides the mass publics and, to a lesser degree, the political elites of all 15 countries. For now, EU leaders are pushing ahead with plans for the EMU, though there are growing calls for a delay in its implementation. The next formal decision making point is scheduled for in May 1998 when the Council will meet in Brussels to determine which countries are eligible to join. It is too hard to predict what will happen, though current discussion probably overstates the degree to which the Maastricht Treaty provisions have to be treated literally and rigidly.

Meanwhile, the EU has a number of other issues on its agenda. Ten Eastern and Central European countries currently have applications for membership pending. Plans to further reform the notoriously inefficient Common Agricultural Policy (CAP) are to be set out in Commission President Jacques SanterÕs Agenda 2000 along with a vision of where the EU should be heading on such touchy issues as its own finances.

In short, if 1996-7 was an exciting year for the EU, 1997-8 should prove even more so.

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