THE EUROPEAN UNION – a historical-institutional overview

the creation of the EU half a century ago, Europe

has enjoyed the longest period of peace in its history.
European political integration is unprecedented in history.
EU enlargement has helped overcome the division of Europe – contributing to peace, prosperity, and stability across the continent.
A single market and a common currency conditions for companies and consumers.

European Union
United in diversity

human rights and fundamental freedoms, and the rule of law.
Largest

economic body in the world.
A unique institution – Member States voluntarily cede national sovereignty in many areas to carry out common policies and governance.
Not a super-state to replace existing states, nor just an organization for international cooperation.
World’s largest & most open market for goods and commodities from developing countries.

27

7

30

490
million

Member States

Combined population of
EU Member States

Percent of world’s
population

Percent of
global GDP

55

Percent of combined
worldwide Official
Development Assistance

goods and services within region
(NAFTA)
Via Customs Union: an FTA with

a common
external tariff (EEC)
To Single Market/Economic Union:
eliminating all tariff and non-tariff barriers
Freedom of goods, services, labor and capital
“Harmonization” of regulation
May also have common currency (euro)
To Political Union?
Common Political Institutions/Constitution

managing economic and political cooperation among its 27 member states

to secure peace among Europe’s victorious and vanquished nations and

bring them together as equals, cooperating within shared institutions.
Based on a plan by French Foreign Minister Robert Schuman (to German Chancellor Adenauer)
Six founding countries – Belgium, the Federal Republic of Germany, France, Italy, Luxembourg and the Netherlands – signed a treaty to run heavy industries (coal and steel) under common management “to make war not only unthinkable but materially impossible”

European Coal and Steel Community

Jean Monnet and other leaders with
the first “European” ingot of steel

economic sectors, creating the European Economic Community (EEC) – or

“common market.”
As a result, people, goods, services, and capital today move freely across the Union.
Britain left out, formed EFTA instead
EURATOM: shared nuclear energy research
1960s: Common Agricultural Policy

1957:

Signing of the Treaty of Rome

(1986)
Single Market by 1992
Delors Report on EMU(nion)

End of

Cold War (1989-91) and Maastricht Treaty (1991/3)
Three pillar structure (left): Euro & economic Policies, CFSP and Justice & Home Affairs
Addt’l: extension of Qualified Majority Voting, Eur citizenship

2004
The ‘No’ of the popular referenda in the Netherlands &

France dealt a significant blow to the Const – and the future of the Union- which found itself in a reflection/crisis period after
NOW: the Reform/Lisbon Treaty, finally ratified in 12/2009 (in 2nd attempt in Ireland)
which takes in most aspects of the constitution (minus flag, anthem, constitution-wording, Minister) such as
Semi-perm. Council President (Herman Van Rompuy)
High Rep for Common Foreign Affairs & Security
(Catherine Ashton)
Policy (‘EU Foreign Minister’) + Ext. Diplom. Service
Charter of Fundamental Rights (binding)
Qual. Majority Voting & Co-decision the rule
National Parliaments receive more time for review
1 Million Citizen’s Initiative

& Herzegovina
Montenegro
Serbia including Kosovo (under UN Security Council Resolution 1244)

perspective, each responsible for a specific policy area.
EU’s executive branch

proposes legislation, manages Union’s day-to-day business and budget, and enforces rules.
Negotiates trade agreements and manages Europe’s multilateral development cooperation.
Supported & represented by ~25,000 Eurocrats in Brussels & the world
Reduction to 2/3 planned in 2014
Mediator, Conciliator, and ‘Conscience
of the Union

European Commission President José Manuel Barroso

of (9 configurations of) ministers of 27 MS, representing their

point of view (Ecofin, Gaerc etc)
After obtaining the draft law from the EC & input from EP, Council votes either by unanimity or QMV
Decides on foreign policy
Council presidency rotates among MS every six months (2010:Spain, Belgium ; Lisbon: EU President)
EU Council: regular meeting of Heads of Government

for 5-year terms (accord to nat. population)
With the Council, passes

EU laws and adopts EU budgets (‘co-decision’ rights)
Approves/Supervises EU Commissioners
Since 1979 pop elected, but low turnout

European Parliament in session

(6yr terms) + Advocates General/Cof First Instance
Ensures all EU laws

are interpreted and applied correctly and uniformly (Preliminary rulings, direct actions against MS, EC)
Can act as an independent policy maker/over-rules national law, only in (econ, agricultural) matters covered by the Treaties.
Primary Law:
Treaties: Treaties & Constitutional Boundaries of MS
Secondary Law: Rules & Regulations, Directives

(advisory group on social/econ. issues)

The Committee of the

Regions (advisory opinion in regional issues)

The Court of Auditors monitors the EU budget

The Eur Ombudsman receives and investigates complaints by citizens

The European Central Bank (ECB)
formulates the EU’s monetary policy
European Investment Bank (EIB)
supplies loans for ‘European’ projects
Specialized Agencies (across EU)

is reserve currency
CFSP: Rapid Reaction Force (RRF); Foreign Minister, External

Action Service; minimal budget: €170 million (2007)
Common Agricultural Policy (CAP): farm subsidies keystone of integration, accounts for ~ 40% of EU budget
Regional Policy: Structural & Social Funds
JHA: Europol & -just; Counterterrorism & Internal Security; Asylum & Immigration laws, borderless Schengen agreement
Trade, Transport & Competition: Single Market rules (4 freedoms of movement), subsidy control & mergers; External Trade
Culture/Edu: Exchange, sister cities
Environmental Policy (202020)
Foreign Aid: Cotonou Convention (77 countries)

of total global trade (more than $1.5 billion in transatlantic

trade every day).
The $3 trillion EU-U.S. transatlantic economy employs 14 million workers on both sides of the Atlantic.
In 2005, Europe accounted for roughly two-thirds of total global investment flows into the U.S. – by far the most significant source of foreign investment in the U.S. economy.

a unified Germany to the EU/EC by creating common ‘bandwidth’

of currency fluctuations & deciding which countries can take part (by 1998) (Stage 1) - single currency instead of common currency!

Jan 1, 1999 =launch of currency at $ 1.18 and ECB creation (Stage 2)

Final money intro/circulation Jan 1,2002 (Stage 3)

Results: Reduces cost of business/transaction costs, reduces exchange rate risks, but also reduces national monetary flexibility

The euro is as stable as the best-performing currencies previously used (currently: too high, making EU products expensive compared to US); popularly accepted (60%) & world reserve currency

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