History of budgetary powers in the EU. Part I: European Coal and Steel Community 1952-2002

Written by Alfredo De Feo

This study, the first part of a wider analysis on the European Parliament’s role in EU budgetary powers, traces the very first phase of interinstitutional relations in the framework of the European Coal and Steel Community (ECSC). The study is part of a joint research project between the European University Institute, Robert Schuman Centre for Advanced Studies, and the European Parliament on the evolution of the interinstitutional relations in the EU budgetary domain.

After a brief historical introduction, the study explains the structure, objectives and means of action of the ECSC. The ECSC Treaty had a number of original features. Among these was the establishment of a High Authority, an independent supranational executive with extensive powers including the capacity to raise funds via a tax (levy) on coal and steel production, to borrow on the capital markets, and to make loans to enterprises. The Treaty also defined the respective roles of the ECSC’s Council of Ministers, Common Assembly and Court of Justice.

The ECSC Treaty did not foresee a budgetary procedure: all competences were concentrated in the High Authority, which presented an annual report on its activities to the Assembly.

The High Authority was the motor for managing the production of coal and steel, which belonged to the ECSC and not to its member states, and for supporting the modernisation of the industry and of the social conditions of the workers.

The present research will highlight a narrative differing in part from the theory of the rules of the ECSC Treaty, and we will discover numerous features which, in spite of the 60-year gap, point up certain similarities with approaches and problems existing today.

The autonomy of the High Authority was mitigated by constant consultation/prior agreement with the Council of Ministers. The Assembly gained influence over the years, in some case obliging the High Authority to modify decisions already taken, even without a specific role being defined in the Treaty. The High Authority introduced multiannual budgetary planning, which was more efficient than annual budgets, and exceptionally allowed a rebate on the levy for two countries. During the 1980s, the member states increased their influence over the ECSC budget (with a direct contribution based on a mechanism similar to GNI). The High Authority, in view of the cost of production in some countries, decided to introduce a rebate on the levy. It was critical of the way the Assembly’s plenary was organised.

The study concludes with an overview of the evolution of interinstitutional relations, with a focus on the budgetary domain and on the capacity of the institutions to adapt and evolve.

Read the whole study “History of budgetary powers in the EU” here.