Governing the initial steps towards this economic union has been a federal constitution best described by decentralized federalism. The Treaty of Rome created a variety of supranational institutions akin to a central government, the most prominent of which were the European Commission serving as an executive civil service, the European Parliament serving as an elected (since 1979) legislature but with consultative powers only, the Council of Ministers whose final unanimous approval (until 1966 when qualified majority was to take affect) was required for all EMU decisions, and the European Court of Justice who made rulings on matters of treaty enforcement. The center of power lay with the Council of Ministers composed of one representative from each member state and guided, since 1974, by a complementary body of heads of state called the European Council. While the Commission as executive was formally given the right to propose legislation in the Treaty of Rome (Article 155), it lacked power to keep items off the agenda, and more importantly, could not constrain the Council from acting unanimously to amend its proposals (Article 149). Beginning in 1966, the Treaty required a formal change in Council voting procedures, moving the decision-making rule from unanimity to qualified majority. However, a threat by France to withdraw from the Council of Ministers if qualified majority took effect lead the Council to adopt the Luxembourg Compromise to continue a rule of unanimity on all matters of ’’vital national interest.” While not formally part of the EEC Treaty, the Compromise has stood as a binding constraint on Council decisions until the passage of the Single European Act in 1986. Members of the Council of Ministers vote according to national interests. As a consequence the Luxembourg Compromise meant only Coasian agreements could become Community policies.

The Treaty of Rome also established the assignment of policy responsibilities to the Council, foremost of which was to create a common market. This the Council did through its power to remove intercountry tariffs (Title I) and through the promotion of economic competition between firms in member countries (Articles 85 and 86). The Council also assumed responsibility for a Common Agricultural Policy adopting a variety of price support policies “to ensure a fair standard of living for the agricultural community (Article 39).” In all major instances these policies were approved by a unanimous Council of Ministers. Also assigned to the Community for policy development were transportation policies and social policies. Because of significant disagreements among member countries in these policy areas, however, unanimity was not achieved and little could be accomplished towards overall goal of economic integration.