History of the European Union (1993–2004)

On 9 to 12 June 1994, the fourth European elections were held resulting in a Socialist victory. During its first session, 19 to 26 July, Parliament elected Klaus Hänsch as its president and approved Jacques Santer as Commission President. His Commissioners were approved on 18 January 1995 and took office on the 23rd. On 19 July 1997, José María Gil Robles was elected President of the Parliament.

European Parliament election, 1994 - Final results at 18-21 July 1994
Group		Description	Chaired by	MEPs
	PES	Social Democrats	Pauline Green	198
	EPP	Conservatives and Christian Democrats	Wilfried Martens	157
	ELDR	Liberals and Liberal Democrats	Gijs De Vries	43
	EUL	Communists and the Far Left	Alonso José Puerta	28
	FE	Conservatives and Christian Democrats	Giancarlo Ligabue	27
	EDA	National Conservatives	Jean-Claude Pasty	26
	G	Greens	Alexander Langer Claudia Roth	23
	ERA	Radicals, Social Liberals and Regionalists	Catherine Lalumière	19
	EN	Eurosceptics	James Goldsmith	19
	NI	Independents	none	27	Total: 567	Sources:

On 1 January 1994 the European Economic Area (EEA) entered into force, allowing European Free Trade Association (EFTA) members Norway and Iceland to enter the Single European Market (created the previous year) without joining the Union, in exchange for financial contributions and taking on of relevant EU law. Switzerland had rejected membership and Liechtenstein joined the following year on 1 May.[4] On 23 February 1995 the ECJ gave the "Bordessa ruling": citizens may export banknotes without prior authorisation (free movement of capital). Later that year on 15 December, it gave the Bosman ruling, ruling that restriction on number of (EU) foreign players in football teams is illegal (free movement of people).

The Schengen Agreement (signed in 1985) came into effect on 26 March 1995 between Belgium, France, Germany, Luxembourg, Netherlands, Portugal and Spain. Austria signed up on 28 April followed by Denmark, Finland and Sweden, alongside non-EU members Norway and Iceland, on 19 December 1996. The EU-Turkey customs union entered into force on 1 January 1996.

The intergovernmental conference leading to the Treaty of Amsterdam opened on 29 March 1996 in Turin. On 22 July 1997, leaders of the Western European Union met and adopted a declaration, to be added to the treaty, defining its role with the EU and NATO. The Treaty was signed by foreign ministers on 2 October. The treaty entered into force on 1 May 1999.

The treaty sought to create an "area of freedom, justice and security" as well as strengthen the CFSP. There would also be institutional reforms to make the Union more democratic and adjust it to enlargement.[5]

Amsterdam also incorporated the conclusions of the 1992 Edinburgh European Council which set out the current arrangements in regards to the seat of the institutions; the Parliament would thus be based in Strasbourg, where it must hold "twelve periods of monthly plenary sessions, including the budget session". However additional sessions may be held in Brussels, which is where committees must also meet while the secretariat must remain in Luxembourg. The Commission and Council would be based in Brussels however some Council meetings and some departments of the Commission would be in Luxembourg which would also host the judicial and financial bodies of the EU. However the Central Bank would be in Frankfurt and Europol in The Hague.[6]

During the 90s, the development EU's Common Foreign and Security Policy (CFSP) was given a strong impetus by the conflicts in the Balkans. The EU failed to react during the beginning of the conflict, and UN peacekeepers from the Netherlands failed to prevent the Srebrenica massacre (July 1995) in Bosnia and Herzegovina, the largest mass murder in Europe since the second world war. The North Atlantic Treaty Organization (NATO) finally had to intervene in the war, forcing the combatants to the negotiation table. On 14 December 1995, the Dayton Agreement was signed in Paris, ending the conflict in Croatia and Bosnia and Herzegovina.

On 24 March 1999, the situation on Kosovo led to an EU CFSP declaration on Kosovo and prompted a NATO intervention in Kosovo and Serbia. While there was greater EU involvement in the Kosovo conflict than in the Bosnian conflict, the failure of the EU to prevent the conflicts in former Yugoslavia, or to bring them to a quick close, heightened the desire for greater EU effectiveness in foreign affairs.[7]

The early foreign policy experience of the EU led to it being emphasised in the Treaty of Amsterdam, which entered into force on 1 May 1999. The treaty created the High Representative with Javier Solana being appointed to fill the post who was also seen by some as Europe's first Foreign Minister. It also led to the 1997 declaration by Western European Union leaders on that organisation's role with the EU and NATO.[5][8] In response, the Nice Treaty strengthened the High Representative and foreign policy cooperation.

Towards the end of 1998 a crisis developed around the community's budget for 1996. There had been allegations of financial mismanagement in the Commission. The Parliament decided to refuse to give its approval to the budget, throwing the Commission into crisis. The People's Party attempted to force the resignation of the Commissioners Édith Cresson and Manuel Marín (both members of the Socialists) while the Socialist group still supported the Commission though and attempted a vote of confidence. Eventually a PES proposal based on collective responsibility (not singling out the two socialist Commissioners) was approved and a committee of independent experts was established to investigate.[9][10]

The committee produced its report on 15 March 1999 and was presented to the Commission and Parliament. It largely cleared most members, aside from Cresson, but concluded that there was growing reluctance of the Commissioners to acknowledge responsibility and that "It was becoming increasingly difficult to find anyone who had the slightest sense of responsibility." In response to the report, PES withdrew their support from the Commission leading to a collapse of support for the Commission. Santer announced on evening of the reports publication that the entire Commission had resigned.[9] Édith Cresson went before the European Court of Justice and, in July 2006, was found guilty but was not stripped of her pension.[11] Cresson today is largely held accountable for the fall of Santer, who went on to serve time as an MEP and never fully recovered, and the rest of his Commission.[12]

The immediate effect on the Commission was that it became politically weakened and unable to react to the beginning of the Kosovo War and the close of the Agenda 2000 negotiations. The crisis had compounded the already reduced powers of the Commission in favour of the Parliament's legislative power, the Council's foreign policy role and the ECB's financial role. However the change with Parliament was the most profound, the previous permanent cooperation between the two bodies came to an end with the shift in power.[13] Due to the crisis, the following Commission rapidly established the anti-fraud watchdog OLAF.[14] and seen as having failed in its duty.[3]

The Commission itself suffered from a loss of trust and reputation, only compounded by the post-Delors mood. Prodi had to deal with increased euroscepticism which helped bring down the Santer Commission. Since the end of the Delors era, pro-integrationism had given way with greater concern about the Commission's powers. By just 2000 the Council curbed the Commission's powers once more when they believed Prodi overstepped his remit.[13] Meanwhile, Parliament gained the publicity it sought and by exercising its power the Council was forced to take increased heed of its views in the appointment of the next Commission.[10] It also showed a Parliament operating with a greater government-opposition dynamic of the two main parties than before.[9] In the following 1999 parliamentary elections turnout did not increase as hoped, but the People's Party did defeat the Socialists, for the first time since elections began, becoming the largest party in Parliament.

To deal with the impending enlargement in 2004 leaders met in Nice on 7 December 2000 to create a new treaty that would ensure the functioning of the Union with the extra members. The Nice Treaty was signed two months later on 26 February 2001 and came into force on 1 February 2003.

The Commission and the European Parliament were disappointed that the Nice Intergovernmental Conference (IGC) did not adopt many of their proposals for reform of the institutional structure or introduction of new Community powers, such as the appointment of a European Public Prosecutor. The European Parliament threatened to pass a resolution against the Treaty; although it had no formal power of veto, the Italian Parliament threatened that it would not ratify without the European Parliament's support. However, in the end this did not happen and the European Parliament approved the Treaty.

During the ratification period of the Nice Treaty, the European Convention began work on the European Constitution, starting work on 28 February 2002, shortly after the Paris Treaty establishing the ECSC expired on 23 July. On the basis of the work of the European Convention, an Intergovernmental Conference (IGC) was held in Rome on 4 October 2003 to make changes the proposed text. It was signed in Rome on 28 October 2004 by all leaders of the new and old members, but was not ratified. (see also: Lisbon Treaty)