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 favoured a protected market for France's agricultural products. In 1965 the European Commission's president, Walter Hallstein, suggested an extension of the Commission's powers and a general increase in the supranational nature of the Community. He also proposed an increase in the use of qualified majority voting in commercial matters dealt with by the Commission.

De Gaulle opposed Hallstein's proposals. De Gaulle also strongly sought a financing agreement for the Common Agricultural Policy ("CAP"). The deadline for this was approaching in 1965.

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 the agenda of the meeting 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".

The crisis was ended by the Luxembourg compromise in January 1966. It was an informal agreement stating that when a decision was subjected to qualified majority voting, the commission would postpone a decision if any members states felt that very important interests were under threat. In effect the compromise meant that Qualified Majority Voting was used far less often and unanimity became the norm. De Gaulle pushed for this measure, as it essentially gave France a veto power over any decisions, and would ensure that their interests under the Common Agricultural Policy would remain unhindered.

The incident leading to the Luxembourg compromise had deep repercussions for the EC, leading 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.