Luxembourg compromise

The Luxembourg compromise or Luxembourg Accords was an agreement reached in January 1966 which resolved differences within the (then) European Economic Community.

President Charles de Gaulle of France disliked the EEC treaty, which had been signed before his return to power in 1958, and especially the provisions for decision taking by majority voting instead of unanimity, which would come into force in 1965. He feared that France would be outvoted, not least on agriculture, where he favoured a protected market for France's agricultural products. In 1965 the European Commission's President, Walter Hallstein, put forward proposals for the Common Agricultural Policy (CAP) and its financing which, whilst favourable to French farming interests, De Gaulle opposed because it would lead to a loss of French ability to control future changes.

Hallstein made the political judgment that de Gaulle would not risk losing the CAP agreement and upsetting French farmers before a December 1965 presidential election. Hallstein calculated that to secure the CAP, de Gaulle would compromise on the institutional questions. The other five countries refused to compromise and wanted de Gaulle to accept the whole package.

After a tense meeting on June 28-30 1965, de Gaulle's response was to withdraw France's representative in Brussels and to boycott discussions of institutional change. This strategy led to what was called the "empty chair crisis".

Paris continued its policy for six months until forced back into negotiations by the impact upon its economy and a poor result for de Gaulle in the French Presidential election of December 1965 (where pro-European centre right candidate Jean Lecanuet and a youthful François Mitterrand did far better than expected, both criticising de Gaulle's policy). Meetings were held in Luxembourg during January 1966 where an informal agreement was reached which became known as the Luxembourg Compromise.

The Luxembourg compromise had deep repercussions for the EC, leading in practice to a slowing down of integration, and move toward the "confederalist" approach favoured by de Gaulle, rather than a more federalist approach favoured by Hallstein and the other five Member States.

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.

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.